Most of us are aware of brands even if we don't know the term "branding." We buy certain colas and detergents because we know their name or "brand" and we know we can trust them to be a good and consistent product. But what about shopping center and mall branding? Does anyone really care who owns the center where they shop?
Dr. Richard Tedlow, a professor at the Harvard Business School who has researched branding for many years and is currently developing a case study about branding to be taught in his executive MBA program, explains branding as "a promise of reliability." He goes on to say that "a brand is in some sense a promise, and brand equity, brand value, comes from the keeping of that promise." Keeping this promise builds a relationship of trust between the consumer and the product or service that the consumer uses. It makes the product or service special to the consumer and produces a loyalty. Tedlow says, "Generally speaking, branding is about reassurance, about consistency, about loyalty, about repurchase behavior." So how do shopping center and mall owners go about establishing this type of brand loyalty in their customers?
Three shopping center owners currently working to establish brand loyalty are: Indianapolis, Ind.-based Simon Property Group, which started to develop a branding campaign three years ago and initiated it in the United States in February; Los Angeles-based Westfield Holdings Ltd., which has been branding in Australia for the last 10 years, has spent four years developing a "shoppingtown" U.S. campaign and initiated it in November 1998; and The Mills Corp., Arlington, Va., which has had a "branding culture" for more than 14 years using Mills, and more recently "Block," as the surname in every project they construct.
When these companies were asked why they are doing a brand recognition campaign, Sherry Simon, vice president corporate marketing for Simon Property Group, says, "Since the company has such a large portfolio (it is currently the owner, developer or manager of 262 centers with 180 million sq. ft. of GLA in 36 states), it now has the depth and breath in terms of properties all across the country to be able to do [branding] on a national level."
Richard Green, co-president of Westfield Holdings Ltd., which owns 81 centers in Australia, the United States, New Zealand and Malaysia with more than 603 million sq. ft of GLA (38 centers in the United States with 35.5 million sq. ft. of GLA), says that "the brand, recognizing the brand and knowing what it is all about, instantly gives you a recognition to the consumer that's different to non-branded activities."
Branding is something Westfield has been doing for many years, even before it knew it had a brand. Frank Lowy Sr., Westfield's founder, tells about the day he was walking down the street in Australia and overheard someone behind him say, "let's go to Westfield" instead of let's go to a particular store. "That led him to understand that he had a brand," says Tedlow.
"Ours is not really a branding campaign, ours is more of a branding culture," says Mark Rivers, senior vice president of national accounts for The Mills Corp. "We have been using branding as one of the foundations of the way we do business." Mills' portfolio includes eight high-end centers currently operating across the United States with approximately 9.7 million sq. ft. of GLA.
When asked what these companies hope to accomplish through branding, the answers are diversified. Simon says her company wants to be "a household name for shopping centers just like Intel is for a computer chip." She says a "greater awareness, greater traffic and greater sales for our retail" are the most important aspects of branding. Green says branding will give the consumer and tenant a better vehicle to better goods and services, which will in turngive the tenant and the investor better earnings. Mills "wants to continue to raise the profile of (its) portfolio and enhance (its) outreach to consumers across the country," says Rivers.
Distinction is what all three companies claim their branding campaigns will bring to their companies. Rivers says Mills' projects are more than just a branding campaign; they are a very specific type of tenant mix and market position which, "represents a specific type of experience and specific type of retail environment." It is a culture that started when the Mills' name started.
He claims the biggest validation of this is other developers going into markets with a formula for a project that looks and feels similar to the Mills projects. These same developers actually tell merchants and municipalities that they intend to build a "Mills-type" project in their communities. Rivers says, "When they say that, they have validated the strength of our brand on the one hand, and on the second hand, they've actually defined exactly what the experience is."
Simon says its brand is distinctive because it is not changing the name or adding its name to its properties because it does not want to lose the autonomy of the malls. By keeping the name of the center and associating the Simon name, it believes that customers will develop a community feeling and certain expectations about a Simon center, which in turn, will provide an "emotional link" that Simon hopes will create customer loyalty.
Westfield claims distinction because of its 10-year branding program in Australia. Like Mills, Green says that Westfield's branding is a culture rather than a campaign. "One of the great byproducts of the brand is that it gives our entire company a focus on the brand," Green says. "All the people know why they are at the company every day, what our goals are."
When you examine these individual programs there are many similarities about their branding efforts. All have exposed their names by either including it in the shopping center name such as Mills - Katy Mills, Ontario Mills, etc., - or adding an identifier such as Westfield's shoppingtown or by putting up banners in the interior and exterior of its shopping centers such as Simon has done.
Over and above the radio and television advertising, all three companies have various incentives to get shoppers into their centers. Simon provides a hospitality suite, an incentive program called "mall perks," "S" magazine -published in cooperation with Time Life Custom Publishing and Visa and Pepsi deals. Simon also has a pledge, which is signed by the center's management that states to its shoppers what they can expect from a Simon center. It also has the Simon Youth Foundation (SYF) program, which sets up schools in the malls to help dropouts earn their GED.
Westfield also has a pledge it calls the "Ten Commandments for Customer Relations" and a training program directed by Frank Cooper (who directed Nordstrom's famous customer service program), for teaching its employees the corporate culture of good customer service. In fact, Westfield puts so much emphasis on customer service that Green tells the story about a lady who went to buy a candle in a shop in one of Westfield's malls and found the price on the candle to be lower than the store wanted to sell it for. She got very upset and complained to Westfield management about the store. In the spirit of good customer service, Westfield bought the candle and sent it to her.
Westfield also has a charitable program, a Christmas jump-start program called "Westfield Works Wonders." The consumer can shop for $5, on Sunday night after normal mall hours, and is given special discount coupons and promotions. As Green says, "Charities win, consumers win, tenants win."
Mills gets more shoppers in its stores by developing more projects, by advertising more extensively and by reaching out to tour and travel groups. It is in the process of exploring ways to reach customers through the Internet and hopes to announce those plans later this spring. Mills also has a television network, set up by Turner Broadcasting, that runs throughout its shopping center portfolio. This network is used to advertise to the 100 million customers that visit its centers each year.
Is there a trend toward shopping center branding? Simon believes "some will follow" but she does not think other companies have the depth, programs and geographical diversity that her company has.
Rivers says, "I see others trying to get their arms around [branding]. It will be interesting to see how it all plays out." He goes on to say that Mills certainly believes in branding and has made it a part of its corporate culture for almost 15 years.
"I suspect that people are looking at this closely and where they see the opportunity to do (branding) they may," says Green.
Another aspect of branding is whether it is viable only with a large portfolio. Simon believes a large portfolio has definite advantages. "I think it's more valuable to the consumer with a portfolio such as ours." She says two of the advantages of a large portfolio are that a customer can buy a gift certificate for a family member in one town and the family member can redeem it at a Simon store in another town and Simon's "mall perks" program can be used from mall to mall throughout the country. She feels with these programs in place, there is a differentiation that puts them above the rest.
Green agrees that a large portfolio has advantages but does not exclude the independent owner. "I think you need to have a certain amount of mass to brand correctly. That doesn't mean that one independent shopping center owner can't run a shopping center well. But it might be a benefit having size in this particular case because you get some efficiency and you are able to get the word out better."
Rivers sees branding as an experience rather than a mass of property. "I think branding starts first and foremost with the experience. If the shop or the customer can have a very particular type of experience that is different, that is unique, that is special, that is identifiable, then you are on your way to branding. It is an overall experience rather than a multiple number of properties."
The big test, though, is whether the consumer really cares who owns the shopping center they frequent and whether brand advertising is effective. In an effort to see the effectiveness of a branding campaign in my area (Atlanta), I went into a local mall and asked a woman (she did not want her name revealed) who was using one of the conveniences provided by the center if she knew who owned the mall. She did not know, nor was she aware of the brand advertising campaign going on at that time. She was appreciative of the hospitality area provided but was not interested in who had provided the facility or why it was there.
Research shows that although there may not be an immediate recognition, when a consumer sees a product or service frequently enough, eventually, there will be identification. As consumers use a product, they become more aware of the brand and a loyalty is formed.
Only time will tell if shopping center branding will be a success. After all, Coca-Cola and Tide were once unknown products. The consumer bought these products, they were happy with the quality of these products, and so they continued to buy them. Now, not only are these branded products recognizable, they are so powerful they can demand a price premium over a lesser commodity.
Whether branded shopping centers will ever reach this point of power is yet to be seen. The Internet is gaining consumer attention and may give shopping centers some competition. One thing is for sure, whether or not consumers do or do not know who owns the local center, they will continue to buy. Who gets their dollar is a question that may or may not be answered by branding.