Converting Browsers into Spenders
For more than a decade, the International Council of Shopping Centers (ICSC) has teamed with major US mall developers in compiling a basic mall shopper profile. The 2005 shopper profile was based on over 21,000 exit interviews conducted at 56 regional and super-regional malls owned and managed by General Growth Properties, Simon Property Group and The Mills Corporation.
The mall shopper’s basic demographic profile has held steady—that is, a typical mall shopper in 2005 was female, 39 years of age and lived in a three-person household with median household income of approximately $51,000. However, a key development from the latest profile is that shoppers spent more time and money at the nation’s malls in 2005 compared with the previous year—and this also was true for the “lost” male shopper.
An analysis follows of the key current and multi-year behavioral patterns for the typical mall shopper.
Number, duration of visits
- In 2005, shoppers made 3.1 visits per month or about 37 trips annually. This compares with 2.9 visits and 3.2 visits per month in 2004 and 2003, respectively. (See Table 3-1.)
- Shoppers stayed longer in the mall in 2005. A typical mall visit in 2005 lasted 81.5 minutes vs. 80.6 minutes in 2004. Moreover, between 2003-2005, the average duration was 81.4 minutes, decisively higher than the 1996-2002 experience of 76.4 minutes.
- Teens (aged 14-17 for purposes of this survey) still frequented the mall the most (4.3 times) in a month and stayed the longest (97.1 minutes) of any age group. (Also see Chart 3-1.)
- As shown in Table 3-2, while males visit malls more often (3.3 times) than females (3.1 times), their mall trip remained relatively shorter than the women’s—74.9 minutes per visit vs. 85.1 minutes.
- In 2005, Hispanics made the most number of visits to the mall in any given month (4.3 times), but Asians stayed about half a minute longer in the mall. This situation was reversed between the two ethnic groups in 2004.
Purpose of visit
- Visiting the mall has become less purpose-driven, a trend that characterized the early 1990s. In 2005, more consumers went to the mall for general shopping/browsing (44 percent) than to shop at a specific store or to make a specific purchase (34 percent).
- While the majority of consumers went to the mall to shop or dine, some visited for “non-shopping” reasons. There was still a good 16 percent of mall patrons whose primary purpose was to attend a special event/movie, or for other “non-shopping” reasons.
- General shopping/browsing took a lot longer (88.5 minutes) than shopping at a specific store or for a specific purchase (71.4 minutes).
- About 1 in 2 shoppers/diners spent from 30 minutes to one hour in the mall. Almost half (48 percent) of shoppers with a specific store/purchase in mind spent from 30 to 60 minutes there. Similarly, 43 percent of general shoppers/browsers and 46 percent of restaurant/food store patrons stayed in malls for 30-60 minutes.
Shops visited, purchases made
- The average number of mall shops entered per trip is 1.9, with shoppers purchasing at about one mall store (0.9). This calculates to an implicit conversion rate of 47 percent, the lowest in the 11 years that ICSC has been tracking this information.
- Having visited 1.3 mall shops and purchased at 0.9, Asian shoppers had the highest conversion at mall stores (69 percent) in 2005.
- Those ages 18-24 and 25-34 visited the most number of mall shops—2.30 and 2.20, respectively. In contrast, those over 65 visited just one mall shop each trip.
- In 2005, teens (14- to 17-year-olds) reported the highest mall shop conversion (53 percent). Two other age groups—those 35 to 44 years old and those over 65 years—tied at second place, with mall store conversion each of 50 percent.
- In 2005, general shopping/browsing generated a lot of impulse buying. General shoppers/browsers spent a mean total $102.00 compared with $88.40 for specific-purpose shoppers. This dichotomy was apparent too for department stores. Impulse buyers spent 23 percent more ($51.80) than targeted buyers ($42.20) at department stores. However, at mall shops, they spent slightly less ($43.80) than specific-purpose shoppers ($45.70).
- What strategies the department stores have been doing seem to be paying off. For the second year in a row in 2005, the average spending at department stores ($44.70) exceeded that for mall shops ($42.50).
- Over the last two years, the average spending at restaurants/food shops was relatively stable at $5.30.
- About one visitor in six (16 percent) left the mall without purchasing anything. This “walk-out rate” has more or less held steady since 1996.
- The mean total spending (including those who spend nothing) per mall visit increased from $86.30 in 2004 to $90.90 in 2005. (Also refer to Table 3-1.) Excluding non-spenders, average total spending was $107.74 in 2005.
- Those ages 35-44 spent the most money at mall shops ($52.10). Meanwhile, department store spending rose with age in 2005—from $14.60 among the 14- to 17-year-olds up to $65.70 for those aged 55 to 64 years.
- Overall, two age cohorts—35- to 44-year-olds and 45- to 54-year-olds—spent the highest total ($108.50) per mall trip. (See Chart 3-2.)
- Understandably, women spent more than men ($94.20 vs. $85.20) during a mall visit.
- Mall spending increased with household income. Those earning $75,000 and over spent $125.80 per mall trip, $32.10 more than that spent by the next-highest income cohort. (See Chart 3-3.)
- Total spending increases with each minute spent at the mall. An average of $200.40 is spent during a mall trip that lasts longer than three hours, while just $46.90 is spent during a less-than-half-hour trip. (See Chart 3-4.)
- By tenant type and by ethnic group, research showed that Asians spend the most at mall shops ($54.80) and food stores ($8.10), while African-Americans spend the most at department stores ($51.40). (See Chart 3-5.)
- As can be seen in Table 3-3, shoppers visited super-regional malls (i.e., centers 800,000 square feet or over) more frequently (3.2 visits) per month, and consequently stayed there longer (82.5 minutes).
- By purpose of visit, malls over 800,000 square feet drew significantly more general shoppers/browsers (46 percent) than purposeful shoppers (32 percent). Meanwhile, malls under 800,000 square feet lured an equal number (39 percent) of general shoppers/browsers and specific-purpose shoppers.
- Total spending was higher at regional malls (i.e., centers with building area between 400,000 and 800,000 square feet). Based on the 2005 data, regional mall shoppers spent $102.90 in total per trip, or $15.00 more than their super-regional counterparts.
- Geographically, shoppers visited malls at least 3.0 times in a month, with the exception of the Midwest (2.6 visits).2 Northeast shoppers frequented malls the most number in any given month (4.3 visits) and spent the longest time there (87.4 minutes).
- Northeast shoppers also reported the highest mall shop conversion (77 percent). This may be attributed partly to the fact that malls in this region drew a sizeable number of specific-purpose shoppers (40.2 percent). In fact, purpose-driven shoppers numbered about the same as the browsers (40.7 percent).
- Northeast residents were the biggest spenders, spending on average a total of $108.80 per mall trip. Meanwhile, those in the West spent the least ($80.50).
The bottom line
Mall shopping habits and buying patterns have remained stable over the years, as validated yet again by the 2005 survey. However, each year, the mall shopper never fails to present new challenges to developers and retailers. Important opportunities emerge from the analysis of the 2005 data, namely:
- More consumers went to the mall for general shopping or browsing, suggesting that they were keen on visiting the mall and were willing to spend. Looking ahead, if developers and retailers provide the right experience (e.g., amenities, store selection and variety, etc.), more incremental spending might be generated.3
- Mall shop conversion dropped to its lowest level since the inception of ICSC’s mall shopper profiling. This needs to be put in perspective. Both the “number of stores purchased at” and “the number of stores visited” increased from the prior year, but the former did not move in tandem with the latter. With the customer already inside the store, half the battle is won. The other half of the battle is for retailers to meet the consumer’s evolving needs and close the sale.
This article reprinted with permission from the ICSC. For more information on the ICSC and its valuable research reports, visit their website.