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THE FRIENDLY AISLES

Taking a cue from airlines, Cadillac Fairview courts the affluent

By Edmund Mander

Cadillac Fairview’s ‘embarq’ program offers affluent shoppers at Markville Shopping Centre a lounge where they can relax and read magazines.

It is the dream of every mall owner: Know thy customers — the richest ones, at least — track their shopping habits, and get them to spend more.

Cadillac Fairview thinks it has found a way to do these things and more, and, the best part about it is, the customers are paying for it. The Toronto-based developer is testing a sort of “business class” shopping program at one of its malls that, for C$149 a year per family, gives shoppers access to a lounge, child care facilities and a range of other services during their trip to the mall.

The program, at Markville Shopping Centre, Markham, Ontario, is primarily aimed at young, affluent families, the people with the most to buy, according to Dominick Bovalino, vice president for marketing and corporate communications at Cadillac Fairview.

“They’re our top 20% of shoppers, and they drive 40% of our sales potential,” he said. “They need the kinds of things that we sell.”

But there is a fly in the ointment with this consumer segment: Families might be a mall’s best customer, but children and husbands can be the worst saboteurs of a shopping expedition, cutting short the time a woman really needs to complete her shopping. Even when there are stores in a mall to amuse a husband or a child, after half an hour or so the whining starts, executives say.

“They’re [women shoppers] not money-constrained; they’re time-constrained,” Bovalino said. Hence the launch in March of “embarq,” Cadillac Fairview’s answer to shopper fatigue. “We need to stop mom going back to her car.”

Markville Shopping Centre is an ideal mall to test the lounge and child-care program: Cadillac describes it as a “family mall,” and Markham is a wealthy and rapidly growing community on Toronto’s northeast outskirts. The lounge and child-care center allow women literally to buy some extra time to shop — although the developer isn’t putting it to them quite that directly.

Members can park in a special lot — the lounge has its own outside entrance — shed their coats and, after they’ve done some shopping, indulge in a bit of relaxation. They can read, drink coffee, listen to music, consult a personal shopping specialist and even take a short massage. When they’re ready to begin shopping again, they can leave their baggage, including husbands and children, and step back into the mall unencumbered.

The child-care center that is attached to the lounge allows parents to leave their children for up to two hours under the supervision of fully trained early-childhood educators.

For the kids, it certainly beats being dragged around department stores by their mothers: There is a “science and discovery area” equipped with supervised computer stations, an arts and crafts center, a reading and music section, a building and game zone, and there are large aquariums and bug tanks, one of which houses — in a section all on its own — a black widow spider, courtesy of the Toronto Zoo.

Husbands can amuse themselves with newspapers, CD listening stations, refreshments and computers to surf the Web — although there are blocks to exclude undesirable sites that offer pornography or, worse, online shopping.

Even the bathrooms are nicer, stocked as they are by products from The Body Shop. And this highlights another opportunity afforded by the embarq program: corporate promotions and sponsorship. Other embarq sponsors include IBM, Pepsi, Crayola, Melitta and the Toronto Zoo.

The name, embarq, which was created by a consulting firm, doesn’t actually mean anything, but it conjures up an image of travel and class, Bovalino explained. Cadillac Fairview spent C$2 million setting up the lounge and child-care center, and it will cost C$1.2 million a year to run, according to executives. But the company reckons it will recoup that in membership fees alone, attracting 9,300 households, or 4% of its total annual shoppers.

In reality, though, the 7,000-square-foot embarq center will pay for itself many times over, executives say. They hope it will extend 30-minute shopping trips to an hour, boosting the average C$60 spent per visit to C$90, which would up to an increase of C$16 million in sales per year. It also will provide opportunities for the mall to track members’ shopping habits in a variety of ways, whether through surveys and promotions or through the use of their membership cards in stores.

The target embarq member is 25 to 44 years old, and has a household income of C$100,000 or more — roughly 30% higher than the average mall customer’s C$85,000 household income. Almost all of them have children age nine or younger, Bovalino said. He declined though to say how many people had signed up so far; the information is “confidential,” he explained, but added: “We’re on target based on our forecast.”

Cadillac is relying mostly on word-of-mouth to attract members to the lounge, which can accommodate 60 adults and 80 children, plus staff.

“Members are bringing their friends in, and that’s been one of the most powerful incentives,” Bovalino said. Stores also are providing membership information and kits, and there has been some direct marketing. For the future, Bovalino said there are a variety of promotional options, including free membership offered by stores and the mall to the highest-spending shoppers, similar to the upgrades business class airlines provide their most frequent fliers.

“Those are the kinds of things we’re working on now,” Bovalino said. “One of the challenges is identifying those people who are heavy shoppers.”

Markville Shopping Centre, built in 1982 and expanded to 948,607 square feet in 1990, is anchored by Wal-Mart, Sears, Old Navy, Toys ‘R’ Us, The Bay and Sport Chek, and has 205 other stores. Cadillac Fairview is entirely owned by the Ontario Teachers’ Pension Plan Board, and owns and manages about 100 commercial properties across Canada.

If the experiment proves successful, the company said it will roll out three more embarq lounges in other malls with strong family customer bases next year, and aims to have them in 20 centers across the country within 3 to 5 years, Bovalino said.

“We’ll customize the model,” he said, according to each mall’s market. “We’re using Markville to make sure the model works.”

Certain rules will apply everywhere, however. Embarq is designed to alleviate shopper fatigue, but is not supposed to provide a cheap alternative to day care. Consequently, parents can’t drop off their kids for the day and hit the town — they mustn’t even leave the mall. Children can only be left for a maximum of two hours a day, and parents get charged a dollar for every minute over that. Moreover, children must be at least 18 months old, but not older than 12. Children 13-17 may use the adult lounge, but they need to be accompanied by a parent.

The mall takes the same stringent security measures that are used in many hospital maternity wards these days. Children are signed in and out by a parent, the kids are issued a bracelet to wear, and everyone wishing to enter must be buzzed in by a concierge. Parents of toddlers four or younger must take pagers with them so they can be contacted quickly, and those with older children are encouraged to take them also.

The program has gained the approval of some retail observers, including Paco Underhill, who specializes in shopping behavior.

“The mall developers have woken up to the fact that it is no longer sufficient just to be landlords,” said Underhill, the author of “Why We Buy” and founder and CEO of the international New York-based retail consulting firm, Envirosell.

But not everyone is so sure this is the best way to attract customers.

Stanley Eichelbaum, SCMD, president of the Cincinnati-based retail development consulting firm Marketing Developments, cautioned that while malls need to compete for customers, it is easy for them to cross the line where expenses outweigh benefits.

“Our margin is not a retail margin; it’s much narrower,” he said, and embarq might have exceeded it. “I would consider it a challenging cost to overcome.”

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