At Valley Plaza Mall, in Bakersfield, Calif., mall management knows how well a mall can market autos.
There, a 40,000-square-foot full-fledged showroom run by Bakersfield, Calif.-based Barber Honda hawks Honda Acoords, Civics and Pilots. So far, results have “exceeded expectations,” according to a spokesperson at Barber Honda.
At Valley Plaza, bringing in Barber Honda came about after a Robinsons-May department store went dark.
“We were looking at a dark space and listening to retailers complain about what's going to happen when Christmas comes,” explains Marcella Anthony,director for Plaza Valley Mall.
Rather than find a traditional department store (or big box retailer), mall management reached out to Barber Honda and a new alliance was formed.
Historically, retail and auto sales have been seen as different animals. Auto dealerships take up a huge amount of space and most frequently you find them clustered together on highways. True, they might not be far from traditional shopping centers. But raretly do they overlap.
At the same time, cars are no strangers to malls. Manufacturers and local dealers often look to showcase new models inside mall common areas. But rarely do they look to set up shop there permanently.
Today, relationships between mall and car companies are evolving as firms forge new alliances. The situation at Valley Plaza Mall goes that next step, by having a dealership right on the mall premises. And in other properties, marketing agreements have deepened. Rather than just having a car showcased within a property, you're seeing cars or brands becoming the “official vehicle” for a specific center.
Mall management are also seeking out auto dealers to sponsor seatings area where shoppers can relax and check out the new rides. And car companies are doing things like sponsor valet parking services in malls as a way of pushing their brands.
Regardless of which party initiates the promotion, auto dealers seem to embrace the displays for the “opportunity to impact their sales directly,” says Dave Brown, vice president for strategic partnerships with General Growth Properties Inc.
More than revenue is driving malls to allow their corridors to become parking lots. “People expect to be entertained when they come to the mall,” says Mike Tvrdik, director of corporate partnerships at Mall of America in Bloomington, Minn. “It's not just for shopping anymore. We're a destination entertainment entity and if we can add additional elements of that entertainment, then that's great.”
But the new marriage of car dealerships and mall also raises new challenges.
At Valley Plaza Mall, for example, the space had to be retrofit in order to allow the new cars to move in and out. Ultimately, mall management replaced the old Robinson-May store's exterior doors with fabricated metal doors to accommodate the flow of new vehicles.
That's got an added benefit when sales are made. “If a customer buys a car, they can open the door and drive it right out,” says Marcella Anthony, marketing director for Plaza Valley Mall.
Finding the right car
Not just any old partnership will do, however. A key is matching makes and models with the mall shoppers.
Mall of America, for example, showcases primarily domestic vehicles, though it has the occasional foreign makes as well.
“We're kind of a cross-section of all America,” says Tvrdik. “That's why we've got a lot of American vehicles.”
Meanwhile, At Taubman Center's upscale Mall at Short Hills, in Summit, N.J., local auto dealer Paul Miller Motorcars displays Bentleys, Rolls Royces and Porsches to complement its affluent shopper demographics drawn to anchors Neiman Marcus, Nordstrom and Saks Fifth Avenue.
In suburban, John Weinberger's seven area dealerships sponsor a vintage-car show leading up to Father's Day at Oakbrook Center in Oak Brook, Ill.
The dealerships rotate Ferraris and Maseratis as well as Chrysler, Jeep, Toyota, Honda and Nissan brands into the mix during the 10-day event.
“We get exposure for the car in the demographics we're looking for,” says Weinberger, president of the Continental Auto Sports dealership and a principal in the others.
The auto industry also targets segments of shoppers found at the mall, moms for example, to showcase minivans.
Often, car companies tap into malls when launching new concepts. When General Growth's Brown started in this line of work 16 years ago, a new category of vehicle was emerging and automakers promoted it heavily in malls — the SUV.
That's still happening. In 2005 Hyundai launched its entry-level SUV, the Tucson with a tour of several General Growth malls.
The mall isn't the only choice for automakers.Honda's advertising agency, RPA of Santa Monica, Calif., is displaying the Japanese automaker's redesigned CR-V for 2007 at freestanding Macy's in Atlanta, Chicago and San Francisco.
San Francisco's Union Square, especially during holiday weekends, draws large numbers of families, RPA notes. And those urban landmarks and tourist attractions also pull in the brand's target buyers, including women and couples in their late 20s and early 30s.
Prospective car buyers are around every corner in the mall and dealers cite buyers who have purchased vehicles after seeing a model on display while shopping. It is difficult to draw a direct correlation to mall promotions with sales, since buyers may be influenced by advertising and other factors. However, the mall display can serve as the starting point or the clincher.
On occasion, dealers and malls promote test drives. Mall of America once set up a test course on its parking lot for shoppers to take displayed vehicles for a spin. Shoppers may be enticed to get behind the wheel with a gift.
These events give dealer's sales reps a chance to go one on one with prospects in the malls' relaxed environment far away from a pressure-filled dealer showroom.
“This is a neutral setting where they know no one's going to come up and pressure them to buy the car,” says Cindy Knight, marketing communications PR manager for Toyota USA Inc. of Torrance, Calif.
Dealers make it an event, with one car or by blanketing a shopping center with several more vehicles for a length of time.
“A three-day weekend here generates hundreds of thousands of people,” says Tvrdik. “You can really make a statement.”
At Mall of America, a 2,000-square-foot display for the weekend costs $8,000 per day. A month-long can range anywhere from the low to mid thousands, according to Tvrdik.
By comparison, advertising via traditional media outlets and consumer shows can exceed $1 million. “We'll spend millions on our displays at auto shows,” says Knight.
Alice Peternel, marketing director at Barber Honda, rarely does mall promotions saying it is not cost effective.
However, she says, she can see the benefit. “If you can get your customer to touch and feel the car, you've immediately formed an emotional attachment,” Peternel says.
A suburban-Chicago dealer can't get into a mall, but wishes he could.
Greg Webb, owner and president of Packey Webb Ford in Wheaton, Ill. sighs, “a mall display would be much better than any typical ad in any medium. Much more shelf life.”
Other Ford dealers are located closer to area malls than his, Webb explains. Under dealer rules the closer dealerships can veto a competitor's proposed display.
Mall displays can run from three days to three years or longer. During an extended run, management needs to rotate the vehicles at regular intervals, just as a car owner should rotate their tires.
“A shopping center developer certainly likes to keep the property changed out,” says Brown. “The key to merchandising is to keep everything fresh.”
Swapping out vehicles is relatively easy, says Tvrdik, the hard part is getting automakers to shift their marketing budgets to mall displays from the media outlets.
The car industry understands using sports teams for marketing better than using malls, according to Tvrdik.
“We certainly have much more traffic. We get enough people to fill the Metrodome twice a day.”