The `Mallification' of America
A shrinking labor pool and changing clientele are forcing an evolution of the marketplace. FUTURE: SHOPPING
BOSTON — WHAT has just begun in Largo, Fla., must warm the heart of the shopping center industry. Fifth-graders are learning the business ropes by working in their own minimall. The Pinellas County school system, in conjunction with the private sector, has built Enterprise Village and filled it with such familiar employers as GTE, Century 21, and McDonald's, companies that give pupils on-the-job experience in a controlled setting (see accompanying story).
The objective is to teach youngsters about the real world of work and how businesses operate.
``Getting America educated,'' says David Hocker, president of the International Council of Shopping Centers, is ``the most pressing challenge'' faced by an industry not known for paying high wages. ``With a shrinking labor pool [in the United States], we could be inundated with labor problems.''
Walter Salmon, a professor at the Harvard Business School, Cambridge, Mass., echoes this forecast when he says, ``The minimum-wage American retailer is in big trouble.''
To attract productive sales personnel, more retailers may have to follow the lead of Nordstrom's, the Seattle-based department-store chain that pays its staff 25 percent more than the industry average, while holding sales people to a loftier sales standard.
Just who will mind the store in the 1990s was only one of the issues that surfaced during the industry's marketing-oriented, ``Maintain the Momentum'' fall convention here. The changing customer and clientele, competition from mail-order retailing, and the need to make shopping malls even more user-friendly were among the other topics. But with almost as many shopping complexes as gas stations sitting on American street corners, Mr. Hocker is urging his colleagues to think of the future and their personnel needs. ``We must sell young people on the fact that without an education they can't live the good life.''
At Hocker's own malls in Kentucky, classes to prepare adults to take the high school equivalency test are offered. Elsewhere, community colleges have moved into shopping center space, and in Philadelphia, the Gallery II mall includes a storefront literacy program among its shops, called the ``Gallery for Learning.''
The need to nurture a large educated labor pool is partly a factor of the shopping industry's size. It employs 9.4 million people at 32,560 shopping centers nationwide, or about 9 percent of nonagricultural US employment.
To some observers, the ``mall-ification'' of America is out of control. That view is not shared by John Riordan, the executive vice-president of the shopping center council. ``Shopping centers are retail driven, not developer driven,'' he says. ``There's never been a shopping center of any size that's been financed on speculation. To get the initial financing, you have to have a long-term, solid commitment from a major tenant, an `anchor.'''
These anchors are traditionally department stores that often sign on for 25 to 30 years. A good anchor can be hard to find, though, given the current instability in this sector. ``There are too many players out there who have too much debt and are not operating properly,'' Hocker says.
Part of the good news at the convention was delivered by journalist-novelist Tom Wolfe, a keen student of the American scene. ``For many years it was assumed that once people reached age 49, they became conservers not consumers,'' said the dapperly attired luncheon speaker. ``But now they are part of the `splurge generation.''' As one indication, he points to the bumper sticker so popular in Florida these days - ``We Are Spending Our Children's Inheritance.''
Even if many older shoppers aren't spending their life savings, they don't feel the need to be misers. ``More than half of all senior shoppers are still working and they spend 15 percent more per trip than the average shopper,'' says Jody Martin, a managing partner of Stillerman Jones & Company, a consulting firm in the shopping center/retail field.
``In the next 10 years,'' she says, ``the 50-plus market is going to grow 10 times as fast as the under-50 market.''
Not surprisingly, retailers are beginning to listen to people like Marjorie Caballero, a professor of marketing at Baylor University in Waco, Texas, and a leading authority on the senior consumer.
She tells retailers that shopping represents a form of recreation for some seniors, a group that prefers morning shopping and exhibits strong store loyalties.
``They want a good value, whatever that may be,'' says Dr. Caballero. ``Bound up in good value is that the product will do what it's supposed to do, that stores stand behind it, that the return policy is liberal, and that store employees show interest in how the senior customer feels and thinks.''
Picking up on this latter point, shopping centers have begun establishing senior consumer advisory councils to demonstrate sensitivity to older customers.
In some areas, the importance of wooing the Hispanic population can't be ignored. Bilingual Santas and Mexican-theme promotions are not unusual in the Los Angeles area, for example.
In targeting the Hispanic community, says Patricia Asip of J.C. Penney Company, ``the Spanish heritage needs to be acknowledged and accorded due respect.'' Ms. Asip, who is from Argentina, has been a major force at Penney's in courting the country's 23.7 million Hispanics. She says this group will soon represent $172 billion in annual buying power.
``Hispanics are increasingly affluent; they are firm believers in the American dream; and a mall outing is an activity often eagerly anticipated by every member of the family,'' she says.
Men, too, are receiving more attention from shopping center retailers, since the reluctance often associated with male shoppers is crumbling. ``For the first time,'' says Ms. Martin, ``more men than women are buying men's clothing.''
Trying to account for this shift, Terri Kabachnick, president of Simplify Your Life Concepts, a total image-improvement and wardrobe-planning business, points to today's changing lifestyles. ``Growth of the two-income family has allowed men to spend money on themselves without guilt,'' she says.
Studies have shown that men prefer the personalized service available in smaller stores. Ms. Kabachnick says this preference is also beginning to show up in other ways. ``Places that men feel the most comfortable in are not the gigantic, oversized malls. They are gravitating to the smaller, country-town theme malls, in search of knowledgeable, intelligent, service-oriented help.''
One of the swankiest of the less-sprawling malls is the recently opened Atrium in Newton, Mass., which boasts valet parking and a doorman. The developer of the complex is Stephen Karp, whose favorite response to inquiries about the next big trend in retailing is to say he doesn't know what it is, but knows when it's going to happen: two weeks from now.
Shopping centers have taken the image and activities of Main Street to the people, but mere convenience, the experts say, doesn't ensure success. Greater service and efficiency appear to be the next frontiers.
The old notion that consumers, especially women, have time to burn just doesn't stand up today. Alfred Eisenpreis, senior vice-president of the Newspaper Advertising Bureau and an international authority on consumer behavior, says ``the scarcest commodity of the 1990s will be time .... In a society in which women and men work away from home, no one can afford to deal with poorly organized and time-wasting centers. Few will do so in this highly competitive marketplace.''