West Acres FINAL paper

West Acres

Research

Project

Prepared by

Ben McWilliams…………………………………..…… Junior

Hank Van Liew…………………………………………. Junior

Dylan Higgins…………………………………………... Junior

Jake Berens……………………………………………… Junior

Ian Jahnig………………………………………………… Junior

Table of Contents

Applied Research 1-‐19

Research Problem 1

Methodology 1

Secondary Data Analysis 1-‐10

Key Trends in Shopping Malls 1-‐2

Customer Profiling 2-‐3

Customer Expectations per Segment 4-‐5

Best Practices 5-‐6

Local Demographics (ERSI Data) 7-‐8

Key Conclusions from Secondary Data Analysis 8-‐10

Ethnographic Research 10-‐19

Procedures 10

Key Results 11-‐16

Attendance Analysis 11-‐12

Customer Counts 12-‐15

Shopping Bag Counting 15

Traffic Flow 16-‐17

Interpretation, Analysis, and Key Implications 18-‐19

Strategic Recommendations for West Acres Mall 20-‐28

Target Market 20-‐21

Atmosphere: Add Natural Light 21-‐22

TV Implementation throughout West Acres Mall 22-‐23

Put a Coffee Stand in the Sears Court 24

H&M 25

Nordstrom’s Rack Store 26-‐28

References 29-‐33

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Part 1: Applied research 1. Research problem What are current social, behavioral, and economic trends that impact shopping mall

attendance?

2. Methodology

Each member of the team did the secondary research part of this project

individually. Articles and data prepared my marketing research groups and

industry reporters were examined and the key information is highlighted

throughout this paper. The information examined included key trends in shopping

malls across the United States and various countries around the world. Next,

dominant customer demographics were researched as well as customer

expectations per group. One of the most important aspects of our research was

examining what makes successful malls successful. These included the types of

stores and restaurants they provided as well as how each mall improved customer

satisfaction. Finally, data provided by the Environmental Systems Research

Institute (ESRI) was examined in order to gain an accurate understand of the

population demographics of the Fargo-‐Moorhead area.

3. Secondary data analysis

3.1 Key trends in shopping malls Malls are no longer just about shopping, consumers are looking for an

experience beyond what the traditional shopping mall can provide. Data from the

Nielsen group suggests that malls are still the place to be when it comes to US

consumers. The biggest trend seen in today’s malls is the transition into a social

center. Malls today are being designed to create an atmosphere for customer

interaction. As the Nielsen Company explains, malls today are more accurately

described as “lifestyle centers”,

“As the U.S. population has diversified, the lines have blurred between

shopping, entertainment, and community. This blending of experiences has

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created an opportunity for retail to strengthen social ties within communities

looking for communal experiences. Lifestyle centers, a newer entrant to the

shopping mix, have met this opportunity head on, as they blend traditional

retail tenants with upscale leisure uses that offer shoppers a place to buy as

well as an experience and a place to gather.”

The main causes of these trends are an aging population and increased

urbanization, which means more people living in smaller spaces causing a greater

need for public spaces in which to socialize and congregate. Finally, the e-‐commerce

revolution and the rise of digital technologies are fundamentally reshaping

consumer expectations and shifting the function of stores toward useful and

entertaining consumer experiences (Fantoni, Hoefel, & Mazzarolo, 2014). As these

trends advance across the global stage, they are forcing mall operators to rethink

how they conceive and operate their properties. This identity crisis is most intense

in the US; the country that pioneered malls and has the most malls per inhabitant.

Thanks to an economic slowdown and a rapid advance of the digital revolution, the

mall industry in the US is retracting and facing high vacancy levels (Fantoni, Hoefel,

& Mazzarolo, 2014). The real estate research firm, Green Street Advisors, predicts

that 15 percent of malls in the US will close or be converted into non-‐retail space

within the next decade. Meanwhile, retail analyst Howard Davidowitz expects half

of America’s shopping malls to fail over the next 15 to 20 years (Abnett, 2015). For

malls not to fail, the transition into a lifestyle center must happen.

3.2 Customer profiling An article by Hayes, Rigby, Serow, and Tager (2015) for Bain & Company

states that more than 90% of 18 to 24 year olds in America visit shopping centers at

least once a week. This is because malls offer a place for these teenagers and young

adults to go shopping while hanging out with friends. It can also be attributed to the

fact that “big name” brands usually appear in malls across the country. Younger

demographics are more likely to frequent stores with flashy brands, such as

Hollister, Victoria's Secret, and Forever 21. Shopping at these stores is as much a

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shopping trip as it is a way to show off status to their peers and fit in, a desired

outcome based on the love and belonging need in Maslow’s Hierarchy of Needs.

Another demographic that visits malls are families. For some families, a mall

provides a way of getting out without having to pay for admission. Specifically,

families with younger children enjoy the various attractions aimed at drawing in

children, such as play areas or fountains.

Malls in higher end places are typically doing well because these malls are

not reliant on a large and prosperous middle class, they can afford to stay open and

thrive. This suggests that malls with high-‐end appeals are drawing in an upper class

individual with significant amounts of disposable income. This could be the key to

developing longevity in the market. As the wage gap increases, so too will a

polarization in mall attendance. Middle class individuals are seeking either high-‐end

brands, or cheap discounts. As a result, the demographics of mall shoppers are

shifting in the same direction. There is no middle ground; shoppers will either seek

high-‐end brands, such as Coach and Michael Korrs, or discount brands and outlets

for surplus, priced-‐to-‐move items.

In an article posted on Business Insider, Haley Peterson suggests that a lot of

malls in middle class suburbs are failing because of their location in middle class

areas. This suggests that families and individuals within the middle class income

demographic are avoiding malls all together. The middle class is notorious for

finding ways to save money, and the rise of online shopping appears to be the

culprit. These middle class families are finding better deals online, and cannot afford

higher end merchandise, and the middle of the road department stores are being

replaced by online storefronts on Amazon and Ebay. The striking decline in the

middle class, a shift to online shopping, and the decline in the appeal of department

stores is driving sales from this middle class demographic into the ground, dragging

the department stores that traditionally relied on them and the malls that house the

department stores with them.

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3.3 Customer expectations per segment When deciding to visit shopping malls, customers expect a safe, relaxing, and

social environment. Visitors to shopping malls aren’t necessary looking for the most

convenient shopping experience, but they’re looking for an atmosphere that

promotes social interaction. Customers expect to fulfill multiple needs such as

purchasing a product and having a rewarding experience. A major reason a

customer visits a shopping mall is because of the retailers & brands the mall has.

Customers’ expect the mall to provide them with an assortment of name brands that

fit their demands. Customers expect to attain an enjoyable "physical shopping

experience" that allows them to be presented with shopping, dining, and

entertainment while still being in a safe environment (Norins 2014). Customers

expect the shopping facility as a whole to provide hedonic value to them without

having to purchase any products. These can include, "free samples, concerts, and

special offers"(Johanason 2012).

For the older-‐aged demographics that go to malls, they have their own

expectations. According to Valarie Zeithaml in her journal, The New Demographics

and Market Segmentation, “The older the shopper, the more likely he/she would

plan and economize, leading to more time and money spent on a single trip, fewer

trips, (and) greater use of information”(Zeithaml, V. 1984). Additionally, Randy

White explains that in relation to other age-‐cohorts, the older-‐aged demographic is

the most “serious shopper” than the other ages (White, R. 2008). From this, older-‐

aged demographics expect shopping malls to contain products of utilitarian value to

tend to a specific need. Also, these customers expect the mall to provide relevant

and useful information regarding their products so the need to acquire information

outside of the mall is less.

For families, their expectations extend to both the parents and the children.

Entertainment for children is not only an expectation, but also a necessity for

families that commit to going to the mall. According to Randy White, for malls with

Family Entertainment Centers (FEC), “75% of families that visited the mall also

visited the FEC” (White, R. 2008). Randy continues explaining that; “FECs are more

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likely to draw shoppers who spend time at the mall stores rather than shoppers who

visit the department stores”(White, R. 2008). From this information, we can figure

that families expect to have an entertainment option for their children to engage in

that satisfies their particular wants in the entertainment aspect. Families expect

these sources of entertainment to be an integral part of their overall shopping

experience at the mall that goes beyond the physical act of shopping in the retailers.

3.4 Best practices

Nomi is a marketing and retail store-‐consulting firm that assists in enhancing

retailer performance and success. According to Nomi the number one factor that

determines success of shopping malls is comfort and what they describe as

ambiance. This is because one of the major uses of malls is for social

interaction. Customers want a place to that’s comfortable to hang out in for hours at

a time.

There are multiple examples of malls excelling at creating social hubs, which

promote interaction and customer experiences. In the US, “The King of Prussia Mall,

located 30 km from Philadelphia, has a Morton’s Steakhouse and Capital Grille. The

Crystal Cove shopping center in Newport Beach, CA has more than a dozen upscale

restaurants, including Tamarind of London and Mastro’s Ocean Club” (Fantoni,

Hoefel, Mazzarolo, 2014). These malls are successful at driving customers in

because they are fulfilling customer needs. Needs such as a place for spending time

with family and friends.

It is not just in the United States, the Xanadu mall located just outside of

Madrid has transformed itself into the ultimate place for parents to spend time with

their kids. The mall features a ski slope, go-‐kart track, and bowling. These

attractions are attracting families from all over Europe (Fantoni, 2014).

Enclosed malls are trying to stay relevant to the socio-‐demographic that is in place

by putting in more attractions that provide customers with an experience that may

be difficult to find at other retail centers. This includes attractions like; movie

theaters, comprehensive eateries, and other cutting-‐edge attractions (Norins 2014).

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In relation to Easton town Centre’s (Columbus, Ohio) success, the mall’s operators

have made a priority out of inviting local retailers, restaurants and business owners

to set up shop here. This means that there are certain products that consumers can

only find in this mall. They won’t find them at the strip centre two miles away.

(Rafter, N/A). Malls need to have a unique selling point. Consumers won’t visit your

mall when another mall has mostly similar retailers.

The Grove and malls like it offer a wide variety of amenities and

entertainment — not just movies (though there is a theater there) but also live

shows. There’s a free trolley, a farmers market, and a park in addition to a variety of

retail and restaurant options (Howland, 2015). Growing popularity in the mixed-‐

use development retail industry. Many developers are finding success in Lifestyle

Centers where there is opportunity for residential living and retail to connect and

promote sales by placing them in high-‐density urban areas. They have found that

placing these retail centers in "highly-‐traffic areas with solid demographics". Also,

these developments provide consumers with a retail option after they may have

conducted business in a company close to the developments. Rick J. Caruso,

company founder and chief executive officer of a California Lifestyle center wants to

"not create a town center mall, but to create the center of town" (Myers 2013).

Enclosed Malls are finding success through technological innovation. Many

malls are integrating free [software] applications that customers can put on their

home computer or smartphone devices. “These can let shoppers know what’s on

sale, get coupons for discounts, and find out about new products as they walk

through the center or enter a particular store" (Myers 2013). The mall’s ownership

at Fayette Mall (largest mall in the state of Kentucky) runs an active web site, one

that promotes the merchants but also advertises special events and sales. The web

site even has a special section titled “Buzz.” This section runs videos focusing on

such key retail moments as back-‐to-‐school days and adult fashion trends. The

section also advertises upcoming films coming to the mall’s movie theater. (Rafter,

N/A). It is important to have different platforms to showcase your mall. If your mall

doesn’t have an influence on the Internet or social media then it is falling behind.

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3.5 Local demographics (ESRI data)

When looking at the demographic trends of the Fargo, Moorhead, West Fargo

Area, there are a few areas that stick out. This community is continually growing,

and data shows it will continue to grow into the future.

One of the categories that shows up frequently is the tendency for people in

the Fargo area to be younger. According to ESRI data, the median age for people

within 10 miles of the West Acres Mall is 30.1 years old. This is significantly lower

than the average age of the typical adult in the United States, which according to

census data is 37.2 years. This shows that the majority of citizens in the F-‐M area are

of a younger generation. Within a 10 minute driving time of West Acres Mall, 25% of

the population is between the ages of 20-‐29 years old.

An older demographic is similarly

formed. Seniors are typically grouped

above age 60. Individuals aged above age

60 make up approximately 19% of the

entire population.

This assumption is also backed up

by data from the Claritas-‐Prism

Geodemographic Report. Data from this

set included zip codes of 58102(North

Fargo), 58103 (South Fargo), 58104 (South Fargo), 56560 (Moorhead), and 58078

(West Fargo). In all of the breakdowns, the age group 21-‐34 had a higher amount of

households in it, sometimes significantly more than others. The data also showed

income levels for those households. North Fargo (58102) had a significantly higher

amount of households making less than $25k per year, where West Fargo (58078)

showed a significantly higher amount of household falling into income levels above

$50k per year.

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Within a 10 minutes driving time radius of West Acres Mall, households

made an average of $69,623 per year. As the radius expands to twenty-‐minute drive

times, the average household income increases to almost $71k per year. This makes

the average household falling into an upper middle class income demographic.

Locals also have a few psychographics worth noting. There has been a push

to buy local and buy

American in the

minds of consumers.

This is true in the

Fargo area, as 43%

of the population

included in the data

responded, “Buying

American is

important to me”.

This was the most frequent importance response. The second highest frequency was

a response of “Likely to buy a brand that supports a charity” at 34%, followed by

“price is more important than brand name” at 28%.

The population is increasing rapidly, and according to ESRI data, that trend is

not expected to slow down through 2020. Likewise, the average household income

for the area is expected to increase as well. As many of the families in the area chase

the endless opportunities of the area, the existing citizens will grow older, more

than likely bringing the average age up with them, closer to the national average.

3.6 Key conclusions from the secondary data analysis

The current demographics shopping at shopping malls are teenagers and

young adults, retirees, and mothers between the ages of 30-‐50. Young adults expect

to attain an enjoyable "physical shopping experience" that allows them to be

presented with shopping, dining, and entertainment while still being in a safe

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environment (Norins 2014). Also, Younger demographics are more likely to

frequent stores with flashy brands, such as Hollister, Victoria's Secret, and Forever

21. Shopping at these stores is as much a shopping trip as it is a way to show off to

their peers, a desired outcome based on a psychological esteem need. Older age-‐

cohorts expect shopping malls to contain products of utilitarian value to tend to a

specific need. Also, these customers expect the mall to provide relevant and useful

information regarding their products so the need to acquire information outside of

the mall is less. Families expect to have an entertainment option for their children to

engage in that satisfies their particular wants in the entertainment aspect. Families

expect these sources of entertainment to be an integral part of their overall

shopping experience at the mall that goes beyond the physical act of shopping in the

retailers.

Best Practices that exist in the United States are those that place comfort and

ambiance as a main priority for their mall. Ways to make these factors a reality is

through recreational facilities, fine dining options, and technological innovation and

integration. Customers want a place to that’s comfortable to hang out in for hours at

a time. Additionally, with the consuming world relying on their phones and e-‐

commerce more than ever for shopping purposes, the use of technological software

for customers to access sales, promotions, coupons, and other incentives are an

essential tool to help create reoccurring customers. Many developers are finding

success in Lifestyle Centers where there is opportunity for residential living and

retail to connect and promote sales by placing them in high-‐density urban areas.

They have found that placing these retail centers in "highly-‐traffic areas with solid

demographics"

Overall, Shopping malls need to be built to appeal to shopper's social

instincts and of course be aesthetically appealing. The shopping mall should provide

a large assortment of name-‐brand retailers that are able to sufficiently satisfy the

utilitarian and hedonic values of the customers. The shopping facility as a whole

needs to provide that hedonic value to the customers without having to purchase

any products. While it is important to provide them with an appealing facility and

retailers, customer service is just as important. It is vital to place customer service

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as a top priority in order to have employees possess the most knowledge possible in

order to make the customer experience relaxing and convenient.

4. Ethnographic research

4.1 Procedures Conducting ethnographic research at West Acres Mall took just over two

weeks to complete. All five team members conducted three separate observations

resulting in fifteen total. Each observation was between an hour to an hour and a

half meaning we spent roughly twenty hours conducting research at the

mall. Observations were spread out so that at least one was taken on everyday of

the week. The majority of our research was done between the hours of 3pm and

7pm during the middle of the week. We strategically planned observations on the

same day, at the same time, for consecutive weeks in order to compare results from

a week-‐to-‐week basis. While observing, time was spent both walking around with

customers and sitting at various locations around the mall.

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4.2 Key results

4.21 Attendance analysis The table below shows the key notes that we took while observing the

shoppers at various days and times around the mall.

Attendance Analysis

Day of the Week

Observations Time of Day

Monday-‐Thursday Friday-‐Sunday

Dominant Demographics

Morning (10am until 12pm)

-‐Almost all Caucasians -‐Roughly 30% males & 70% females between the ages of 50-‐70.

Afternoon (12pm until 5pm)

-‐Roughly 50/50 Caucasian males & females between the ages of 50-‐70.

-‐Caucasian females between the ages of 30-‐60. -‐Roughly 15% of population black/middle-‐eastern.

Evening (5pm until 9pm)

-‐Roughly 80% Caucasian with a 50/50 split between male/female. No dominate age.

Behavior and General Activities


-‐Leisurely walking. -‐Main activity is socializing. -‐Very few shoppers.


-‐Leisurely walking. -‐Main activity is shopping. -‐If people are socializing, 80% are eating as well.

-‐More people at the mall to socialize, hangout, window shop as opposed to actually shopping. -‐Kids aged 5-‐8 are

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playing around the fountain and are drawn to the fish tank.


-‐If people are alone they are walking at a fast pace. People walking in pairs and in groups are walking at a leisurely pace. -‐People who are shopping aren’t socializing as much as people eating or sitting in the various courts around the mall.

Description: shopping alone, in groups, etc.


-‐Almost all people shopping are alone. -‐A few groups of people socializing in pairs.


-‐ A mix of younger people (below 25) shopping in pairs or groups and people over 40 shopping alone.

-‐People mainly shopping in pairs or groups. -‐Sunday: mostly families (parents with young children)


-‐People mainly shopping alone, a few shopping in pairs. -‐Only a few families.

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4.22 Customer counts As part of our research we examined how the various courts around the mall

are used at various times of the week and day. The table below shows the notes we

took during our observations.

Customer Counts

Days of the Week

Mall Court Time of Day

Monday-‐Thursday Friday-‐Sunday

Food Court Morning (10am until 12pm)

-‐ Very low attendance. 15-‐30 people. People are taking their time when eating.


-‐Early afternoon (12-‐2pm) mainly elderly couples eating. -‐People eating alone are either reading or on their cell phone. -‐About 50-‐60 people.

-‐About 100 people in the food court around 4pm. Very few with shopping bags. -‐No one is in a rush. -‐People are eating at all restaurants though Leeann Chin received the most visits.


-‐Space is dominated by groups of people. Either families or groups of people aged 16 to 24.

-‐People are gravitating more towards the right side (Qdoba) of food court.

Herberger’s Court


-‐5 people sitting in chairs. -‐All elderly people (60 and older). Not particularly doing anything.


-‐3:30pm-‐ All of the seats were filled. 12 people. -‐A few groups or pairs of people seen talking but people mainly alone.

-‐Everyone in the court is sitting alone. -‐Either just resting or is on their phones. -‐Older demographic dominates the court.

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-‐Less traffic and people sitting than JCPenney court.

-‐No one lingering in the court. -‐5:25-‐5:30pm-‐ 5 people enter/exit into Herberger’s.

Macy’s Court Morning (10am until 12pm)

-‐Busiest court in the mall besides the food court. -‐10 people sitting in chairs. -‐2 different groups talking to one another.


-‐Older people use the chairs to rest or talk. -‐Most people just walk through on their way to somewhere else.

-‐Mainly older people (60 and older) sitting on chairs. -‐One group of 3 talking-‐ otherwise people alone eating or on phone. -‐People spend the most time in this court.


-‐5:40pm-‐ no one sitting in the court. -‐People linger at Easter attraction but no one remains in the court for long.

-‐Benches by pillars are only utilized for brief rest. -‐Easter Bunny garnered a lot of attention from patrons, specifically families.

JCPenney Court



-‐Court dominated by parents with young children.

-‐Almost everyone in the area has orange Julius.


-‐Mom with young son enjoying the fountain for over 5 minutes. -‐From 8pm to 8:10pm 10 people left mall through exit.

-‐Half the people in the court have orange Julius. -‐5:30-‐5:35pm-‐ 10 people enter/exit into JC Penney.

Sears Court Morning

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(10am until 12pm)


-‐People mainly using the court to wait for other people.

-‐Kids enjoy the aquarium. -‐Calm atmosphere.


-‐Couple with 2 young kids looking at fish tank for 5 minutes.

-‐Families with young children seem to rest/take a break here. The fountain fascinates kids.

4.23 Shopping bag counting

The table below shows the number of bags for the top five brands that we

observed. It also shows the dominant demographics for each brand. To be

considered a dominant demographic, the demographic had to represent over fifty

percent of all the shoppers carrying the selected brands bag.

Brand Number of Bags

Dominant Demographic

Victoria’s Secret/Pink

36 Caucasian females between the ages of 18-‐30. Roughly 70% of the time they are shopping with one or more friends. The rest of the time they are with boyfriend/husband.

JCPenney 24 No dominant demographic. Spread out between Caucasian males and females at varying ages.

Macys 11 Caucasian females between the ages of 40-‐60. Roughly 80% of the time they are shopping alone or in pairs.

Forever 21 16 Caucasian females between the ages of 15-‐24. Roughly 60% of the times they are shopping in pairs of groups.

Maurice’s 9 Caucasian females between the ages of 30-‐50. Roughly 60% of the time they are shopping alone.

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4.24 Traffic flow

The most popular entrances to the mall that we observed are located at the

food court, the JCPenney court and JCPenney itself, and the South East entrance

located near the best buy.

JCPenney Court: When shoppers entered through these doors or through JCPenney,

they regularly bought something at JCPenney and then either left of continued to

explore the mall down towards Herbergers.

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Food Court: This was the most popular entrance into the mall. Many shoppers did

not go directly into the food court but continued into the mall. The majority of

shoppers turned right towards Herbergers once they entered the Macys court. If

shoppers did turn left the primary destination was Victoria’s Secret or Forever 21.

Rarely did shoppers go past Victoria’s Secret and Forever 21 towards the Sears

court.

South East Entrance: Shoppers entering through here primarily went to the nail

salons located in the Sears court. With a bus stop located right by this entrance

other types of shoppers did use this entrance as well. Shoppers who entered

through these doors explored more of the mall than shoppers using any other

entrance.

The main road used by shoppers was the hallway running east to west. The

second highest number of shoppers walking the hallways was found in the hallway

running north south between Herbergers and JCPenney. The side of the mall west of

Macys was always busier than the east side. The area between the food court and

Macys was always had the highest number of shoppers.

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4.3-‐4.4 Interpretation and analysis & Key implications of your findings Key Behaviors:

Based on our observations, we determined that shoppers could be put into

two distinct categories: those at the mall shopping for a specific product or to visit a

specific store (acquisitional shoppers) and those at the mall for leisure, social

interaction, or to eat (Experiential shoppers). We arrived at this conclusion because

of these key observations:

• People sitting at the food court and various other courts around the

mall rarely had shopping bags with them.

• One of the biggest discrepancies between shoppers was their walking

pace. People were either walking at a fast pace or a leisurely one.

The table below describes the general characteristics of each group:

Acquisitional Shoppers Experiential Shoppers

Characteristics -‐Usually alone -‐Walk at a faster pace -‐Avoid crowded areas of the mall -‐Rarely stop for food/coffee -‐Above the age of 30 -‐Rarely have more than one bag

-‐In groups of 2 or more -‐Walk at a leisurely pace -‐Take advantage of various places to eat/drink -‐Within any given group there are at least 2 or 3 different brands of shopping bags -‐Browse various stores and window shop

This is not to say that social visitors are at the mall only to hangout or

eat. They may be at the mall because they want something specific, however, they

treat it as a social experience and take their time while shopping. The number of

experiential shoppers far outweighs the acquisitional shoppers at any given

time. This is probably due to the variety of stores the mall offers and the fact that it

would most likely be easier for people wanting a specific product to avoid the mall

and shop at stores such as Wal-‐Mart or Target.

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Key Behaviors by Age Group:

Age Group Behaviors

Children (3-‐8) -‐Enjoy spending time at the fountain in the JCPenney court and at the aquarium in the Sears court. -‐Just before Easter, this group visited the Easter bunny in the Macy’s court with high frequency.

Teenagers & young adults (13-‐26)

-‐75% of the time they are shopping in pairs of groups. If not with friends they are with parents. Rarely are they shopping alone. -‐Enjoy eating and spending time at the food court. -‐This group predominantly uses the other courts as meeting places and spends very little time in them. -‐Rarely shop at the big department stores.

Adults (30-‐60) -‐This group is either accompanied by children or shopping alone or in pairs. -‐The number of females in this group is always larger than males at the mall at any given time. -‐This group shops at the department stores unless they are with children. -‐When with children they rarely have more than one shopping bag. -‐They spend very little time in any or the courts.

Elderly (60-‐80) -‐This group uses the seating at the various courts around the mall the most. -‐At the food court they usually grab something small to eat and take their time while reading the newspaper or talking amongst one another. -‐Aside from the food court, this group can mainly be found in the Macy’s court. -‐If not sitting and talking in pairs or groups they are sitting alone resting or reading.

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Part 2: Strategic recommendations for West Acres Mall

Overview:

In this section of the report we will provide strategic recommendations for West

Acres Mall. These recommendations include…

• Target Market • Atmosphere

o Add Skylights to the mall • Implement the use of Televisions • Add Coffee stand to the Sears Court • Stores to Add

o H&M o Nordstrom’s Rack

Target market Home to over 120 stores, a wide selection of place to eat, and a movie theatre, West

Acres mall offers a variety of reasons as to why shoppers would visit. This is why

West Acres should have three key target markets. The following three target

markets are recommended based on secondary data analysis, local demographic

data provided by ESRI and our observations at West Acres.

Elderly: This group is 55 years old or older, Caucasian, and is both male and female.

They are retired and spend the majority of their time at the mall on weekdays

between the hours of 12:00pm and 5:00pm. Their primary reason for being at the

mall is to socialize and spend their time in a public setting. They can be found

sitting in the food court eating, drinking a coffee, talking to one another, and/or

reading the newspaper.

Caucasian Females: Between the ages of 30 and 50, this group is comprised mainly

of mothers. This group is made up of middle to upper class citizens. Some of this

group is stay at home mothers who spend their time at the mall in the afternoon.

This target market either comes to the mall alone, with a friend, or with children. If

they are alone they tend to spend less time in the mall and only visit a few stores

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during their trip. If they are with a friend then they will visit a variety of stores and

potentially sit down with a coffee to talk. Whether alone or with a friend, this

group’s favorite stores are JCPenney, Macys, and Maurice’s. If they are with their

kids then they will visit a few stores but will also spend time at the fountain, fish

tank, and attractions in the Macys court such as the Easter bunny exhibit.

Teenagers & Young Adults: This group is composed primarily of Caucasian

females between the ages of 15 and 24. They tend to visit the mall between 3:00pm

and 6:00pm during the week and at various times on the weekend. They are rarely

shopping alone and are almost always with a friend or in a group. Their favorite

stores are Victoria’s Secret, Pink, and Forever 21.

Atmosphere: Add Natural Light:

Currently, only the food court and the JCPenney court effectively utilize

natural light. West Acres should add skylights to the Herberger’s court, Macy’s

court, and Sear’s court. The relationship between natural light and consumer

behavior is positive to say the least. In a literary review of the effects of natural light

on consumers, researchers Edwards and Torcellini stated that natural light could

enhance store environment, create a more pleasant shopping experience, and

increase sales. This claim of increasing sales is

backed up by Gregg D. Ander, chief architect of

Southern California Edison, who applied day lighting

to one of the largest retailers in the country. In

2001, he studied 11 stores in the same district.

When compared to nondaylit stores, daylit stores

sold 28% more product (Ander, 2001).

The Heschong Mahone Group completed a

study in 1999 evaluating 108 stores of a retail chain,

of which two-‐thirds had natural lighting. Forty-‐two

consumers were interviewed and of those

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interviewed, 80% said the stores felt cleaner, while 65% said it felt more spacious

and open. “The Heschong Mahone Group study demonstrated that the benefits from

daylighting could be extended to customer loyalty, more relaxed customers, better

product visibility, and improved employee morale” (Edwards & Torcellini, 2002).

As well as these studies, our observations of the various West Acres courts

support our recommendation of adding skylights to the mall. The well-‐lit JCPenney

court was always inhabited with people enjoying themselves at the mall. Also, every

member of this team was happiest and the most relaxed when in the JCPenney

court.

The final reason to add skylights to the Sear’s, Macy’s, and Herberger’s court

is the cost savings in terms of electricity. The initial cost of putting skylights in will

be expensive, however, the long-‐term savings on electricity should be considered.

TV Implementation throughout West Acres Mall:

West Acres should begin implementing Televisions in specific locations

throughout the facility. The Televisions could provide a variety of different benefits

to the West Acres shopping experience as a whole. Through observational studies

and other research, West Acres should implement these televisions around the

fireplace of the Food Court and all main hallway-‐intersections.

West Acres would see an increase in their customer’s overall shopping

experience through implementing TV’s displays on the four panels of the fireplace.

West Acres already provides a vast amount of seating options in the food court

including couches, chairs, and wooden chairs at the food court tables. However,

aside from the eating experience in the food court, there are little to no attractions

that provide an enjoyable time-‐investment. According to the Toledo Blade, the Food

Court Entertainment Network Inc. (FCEN) filled food courts in malls with,

“televisions broadcasting a mix of entertainment, news, and advertisements for mall

stores and products”(Jones, D. 1996). It continues to explain that through

observational research studies conducted by the FCEN, shoppers who watched the

television displays in the court noticeably “bought more products than ones who

didn’t”(Jones, D. 1996). From this, there is an obvious influence the television

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displays have on consumers in the food court. When people are eating at the food

court, their eyes wander around the entire court naturally. So, placing them in the

court would draw customers to engage in watching the televisions. We recommend

placing TV’s around the panels surrounding the fireplace. Through broadcasting

sporting events, news channels, and mall advertising, the TV’s would provide a

positive experience for customers sitting in the chairs surrounding the fireplace as

well as promoting the products that the mall’s retailers provide.

The next locations where televisions should be placed is at all of the main

hallway intersections of the mall. At other shopping malls across the world, the use

of LED screens and television displays in specific locations has provided a

respectable return on investment in overall shopping experience, as well as in sales

generation. According to Adi.TV, LED screens for shopping centers are, “attractive as

a promotional medium and the leisure-‐centered atmosphere...Whether it be

storefront product promotion or shopping centre big screen customer

entertainment”(Adi.TV 2016). Also, these displays can create, “increased value and a

more favorable split of advertising sales”(Adi.Tv. 2016). From these LED screens

most likely being out of the West Acres price range, we recommend mounting flat-‐

screen TVs on the mall directories and on the walls of the hallway intersections in

each of the respective courts. For example, we recommend mounting a television on

both sides of the directory in hallway C (Food Court) where they would display the

current promotions of the retailers in those hallways. This would promote

unexpected purchases to those customers that are at the mall for one specific

retailer. Also, it has the ability to increase customer traffic in areas of the mall that

are generally lacking in attendance.

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Put a coffee stand in the Sears court:

If a coffee stand were placed in the Sears court, like the Moxie Java stand in

the JC Penney court, we believe it would increase traffic into the Sears court area

and into Sears itself. Not only would the stand increase traffic going into Sears, but

also bring business to the businesses surrounding the Sears court.

According to Eillie Anzilotti, stores putting coffee shops in their store space

have seen business increase because the coffee shop itself generates a micro culture

in the store associated with the coffee shop.

25

H&M: West Acres should add an H&M store to the mall. The H&M strategy is the

offering of high fashion at low prices, typically targeting working class, lower middle

class and students. Even though H&M offers clothing for all ages, their main target is

women. The most popular segment is women ages between 15 and 30 years.

Women purchase mostly

for themselves but also

buy their children’s

clothing and often their

husbands as well.

H&M is the second

largest clothing retailer in

the world, while being the

largest in Europe. Sales

growth in the U.S. has far

outpaced those reported by Gap, for example, while teen retailers such as

Abercrombie & Fitch have seen their businesses suffer a bruising decline as tastes

have changed in favor of H&M and rival Forever 21(Kell, 2015). In 2014 sales leapt

17% compared to the previous year, which showcases its popularity amongst

consumers. H&M’s growth target is to increase the number of stores by 10-‐15

percent per year.

Its main competitors are retailers such as Zara, Topshop (both are European

brands expanding in the US market) and Forever 21. The nearest Zara & Topshop is

located in Chicago, while the nearest H&M store to West Acres mall is located in St

Cloud, Minnesota, two hours and thirty minutes away. This makes West Acres an

ideal location for H&M to reach a larger audience in the US as they look forward to

continuing their US expansion. According to our research, the national median age is

37, and the average median age within ten minute driving to West Acres is 30.1

years, while the percentage of population between 20-‐29 years is 25%. This makes

for a perfect market for H&M and implementing H&M into West Acres will drive up

sales and bring more customers to the mall.

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Nordstrom Rack Store:

West Acres Mall should

replace a current department store

with a Nordstrom Rack Store. A

Nordstrom Rack store would fit

perfectly into the space currently

occupied by Sears. Nordstrom’s

popularity is soaring at the moment and they are one of the most desired places to

shop for consumers. In December 2015, Market Force surveyed 5700 consumers to

determine who delivers the best retail experience. Across seven specific areas,

Nordstrom had the highest average score with 58% (Colon, 2016). Nordstrom Rack

stores fall into the outlet or off-‐price category, which means that they deliver high-‐

end, name brands at a discounted price. According to Sharon Bailey and Market

Realist, consumers who shop at stores such as these belong to the middle and

middle to upper classes. Based on data provided by ESRI, within a ten-‐minute

driving radius of West Acres, households earn an average of $69,623. The total

population within this radius equals 121,070 as of 2010. Therefore, there would be

a large population for a Nordstrom’s Rack store to service.

The perfect place to add a Nordstrom’s Rack store into the mall would be at

the Sears location. Based on our time spent at West Acres and all of the

observations we took, Sears was the least popular department store at the mall.

This was based on the lack of Sears bags seen around the mall and the fact that the

end of the mall containing Sears was always the least busy.

In February 2016, Sears said that its same-‐store sales fell 7.1% in the fourth

quarter and revenue dropped 9.8%. Last year Sears reported a loss of $159 million,

which compared to a quarterly loss of $580 million this year seems meager

(Peterson, 2016). Industry analysts also forecast problems for Sears in the future.

Neil Saunders, CEO at retail consulting firm Conlumino, wrote in a note to clients

Thursday that "The underinvestment clearly shows and as such they are caught in a

vicious cycle of seeing lower and lower customer traffic, which further weakens the

27

case for investment and reinvigoration” (Peterson, 2016). With Sears trending

downward and Nordstrom’s trending upward, the time to replace Sears is fast

approaching. A Nordstrom Rack store would also benefit West Acres in the

following ways: Target Market: According to Sharon Bailey, Market Realist, and Nordstrom’s 2013 Fiscal report, the

company is attracting millennials between the ages of 16 and 34. These consumers

are brand conscious and try to find big-‐name brands at reasonable prices.

As you can see by the graph above, products designed for women account for 56%

of merchandise sales for 2013. That doesn’t account for the 23% of shoe sales,

which we could assume is mainly women’s shoes. Women between the ages of 16

and 34 is the key demographic for Nordstrom’s, which is the part of our

recommended target market for West Acres.

Customer Traffic: The area of the mall around Sears has the least amount of foot

traffic in the mall. Adding a Nordstrom’s Rack store would increase foot traffic at

28

that end of the mall by providing a sought after destination. With the two salons

located at that end of the mall, the target market already visits that area frequently.

29

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West Acres FINAL paper

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