Making Mobile Work for Marketers

While pundits debate mobile’s uses as an marketing medium, examples are all around us of brands experimenting with this new medium. New to the fray is General Growth Properties, a mall developer and owner of Water Tower Place in Chicago, Fashion Show at Tyson's Galleria outside Washington and South Street Seaport in New York. According to a recent story in Mobile Marketer Daily, the mall operator partnered with Mobisix to extend its email-based The Club program to include The Club Mobile, an alerts service that relies on SMS.

These are clearly early days for what’s being billed as the nation’s first national mall-based mobile advertising network. And it’s understandable that General Growth would follow its retail customers’ embrace of offer-driven loyalty. Here’s how the program currently works:

Consumers who sign up online with mobile number and other preference data at http://www.theclubmobile.com will receive discounts and offers via regularly scheduled text messages. Those who sign up stand a chance to win a $1,000 shopping spree.

The loyalty business is waking up to the fact that earning loyalty requires more than offering customers deals. At Loyalty EXPO earlier this month, there was lots of discussion about the shortcomings of across-the-board discount oriented programs and the need for a more nuanced approach.

Here are a three ideas for General Growth and others like them to harness the unique opportunity that mobile affords them to drive profitable business to their tenants and provide real value to end users:

1. School’s out, and moms are looking for low cost things to do with the kids. Mobile alerts about local mall activities like face painting, story telling, and other goings-on would be welcome news and smart uses of SMS for moms on the go.
   
   
2. People are looking for value, and stores are offering all kinds of discounts and deals on services like gift wrapping, not just merchandise. Marketing these service type deals in advance of a shopping trip may fall on deaf ears as they really become relevant once the shopper is at the mall. Mobile alerts about tenants offering free gift wrapping, or other services would be useful and again, don’t require any additional spend or discounts beyond what the retailer is already offering.
   
   
3. Shoppers at high-end properties like General Growth’s are tuned into good-works and brands with a social conscience. Malls are a great venue for supporting those good works. Whether it’s hosting a local area clean up that gets the locals involved or a pancake breakfast honoring the local fire department, the mall is a gathering place and natural community venue. General Growth could use other media to promote these events in advance and mobile to promote them the day they’re occurring to drive participation.

General Growth is in deep trouble. So are malls in general. As CB Whittemore suggests in her recent blogpost “Rethinking the Mall & Uncovering Retail Creativity” the next stage for retail is socializing the retail environment – and I would argue, that extends to the mall experience.

Increasingly, community is where we make it…and that includes the mall.

Malls Giving Way to New Formats

The tough economy has been well-documented. Still, it’s stunning to see the number of mall retailers that have disappeared this year alone. Gone are: Sharper Image, Fortunoff, Linens ‘N Things, Boscov’s, Steve & Barry’s, Mervyn’s, Circuit City, Shoe Pavilion, CompUSA and Goody’s.

According to an Oct. 6 report in the Wall Street Journal the vacancy rate at malls in the top 76 U.S. markets rose to 6.6% in the third quarter, up from 6.3% in the previous quarter, and its highest level since late 2001. Strip malls and family and lifestyle centers are also vulnerable to changing consumer preferences. Their vacancy rate climbed to 8.4% in the third quarter from 8.1% in the second quarter. That marks the highest rate since 1994, and these numbers are surely going to increase as the worst holiday season in a generation plays out.

The whole idea of the shopping mall may be losing relevance as consumers seek out greater shopping accessibility, more merchandise uniqueness, local sourcing and other priorities. The NYTimes reported on Nov. 11 that the nation’s second-largest mall owner disclosed that it might default on some of its debt obligations. General Growth’s most prominent mall holdings include Water Tower Place in Chicago and the Fashion Show mall in Las Vegas.

In fact, the Economist reported earlier this year that so many malls have died or are dying that a new hobby has appeared: amateur shopping-mall history. Like many esoteric pursuits, this has been facilitated by the internet. Websites such as Deadmalls.com and Labelscar.com collect pictures of weedy car parks and empty food courts and try to explain how once-thriving shopping centers began to spiral downward.

While malls are struggling, retailers like Tiffany’s, Home Depot, and Best Buy among others, have been experimenting with smaller format stores. FAO Schwarz launched stores-within-a-Macy’s store by this Holiday, instead of free-standing stores.

They’re experimenting with other formats, as well. Pop-up retail continues to grow. Victoria’s Secret went on campus to reach students at 23 colleges across the country with its Pink brand. J. Crew signed a 4-month lease on The Liquor Store building in Tribeca in August.

And a new form of pop-up retail has emerged. From Zoom Systems, some call it automated retail, others call it the next generation vending machine. There are nearly 800 Zoom Shops located in airports, malls and retail stores in the US and Japan. Zoom Systems offers retailers added branded distribution in high traffic, attractive locations they couldn’t profitably put a store on. Consumers are exposed to the brand in an attractive setting, and generally buy to fill an immediate need for a specific usage occasion (e.g., a gift, for personal use on an trip).

Currently, iPod, Proactiv Solutions, and Sony are among the brands sold through Zoom Systems. Sharper Image couldn’t make it in its own stores, but this would seem like a way that brand could live on. Brookstone also seems like a candidate.

In addition to established bricks and mortar retailers, the concept seems perfect for manufacturers and direct sellers who don’t have a physical presence. A Zoom Store could be an opportunity for both brand building and a revenue generation for e-tailers like Amazon or Drugstore.com and maybe even for Mary Kay, Avon, or Tupperware, though care would have to be taken to avoid alienating the troops.

Seems like a natural to put a Zoom Shop in markets where established brands are considering opening their own distribution. Expect to see more Zoom Shops popping up as brands look for low cost ways to test the waters and build awareness.