Shopping center owners are using a variety of sophisticated technologies and techniques to create detailed customer profiles. By gathering storehouses of information about shoppers, the industry is learning exactly what privileges, amenities and services will keep customers coming back for more.
Mall owners, retailers and developers continue to gather information using more traditional means, such as intercepting mall shoppers with surveys and questionnaires. But recent advances in customer profiling promise to yield a more bountiful harvest of valuable data.
Columbia, Md.-based The Rouse Co. is one of a number of large mall owners using customer profiling to boost the bottom line. Rouse recently introduced the Premier Shopper Club, a loyalty marketing program that, along with special savings and coupon books, offers a series of perks such as free shopping bags, local calls and stroller check-out.
The program is in place at 36 of Rouse's 48 centers. "We already have 650,000 members in the club, and by the end of 2000 we expect to have well over a million," says Duffy Weir, Rouse's vice president and director of specialty retail and marketing.
Premier Shopper enables Rouse to compile extensive customer profiles. Prospective club members receive applications that, along with address, phone number and birthday, include additional questions such as gender, employment and marital status, number and ages of children in the household under 18, total household income and highest level of education completed. They are asked whether they have personal computers at home and use e-mail or the Internet, and are invited to participate in an international research panel throughout the course of a year. Joining the panel gives club members the opportunity to provide their opinions about retail goods and services -worthwhile information for Rouse.
Along with special savings and a book of coupons with discounts, club members are provided with four free services that the company has determined through its research are most desirable: seasonal gift wrap, shopping bags, local calls, and stroller check-out. An additional service, a coat and package check, also free, will be added before Christmas 2000.
Banking on the benefits By emphasizing service in this manner, Rouse is counting on being able to provide the one intangible benefit that sets its centers apart from those of its competitors: free services.
"A lot of our competitors are beginning to charge for their services. If they are charging $3 for their strollers, and ours are free, then that, in our opinion, is going to give us the edge," says Weir, adding that since the introduction of the Premier Shopper Club, Rouse centers have seen dramatic increases in enrollment and in the use of services.
"Most important, along with having a mailing list of customers - and we have no interest in selling that list - we now have a valuable marketing tool in which our national, local and regional retailers have developed a keen interest," Weir says. "When they want to open a new store, it's the first place they go."
Survey says In its customer profiling efforts, Toronto, Canada-based Cambridge Shopping Centres Ltd. has opted to stay with a more traditional approach. Every two years, the company hires surveyors from a national firm to interview shoppers as they exit Cambridge malls. The surveys are conducted on a rotating basis at regional and sub-regional malls by surveyors who, in addition to identifying themselves by name, are required to wear badges and adhere to other strict criteria.
In order to obtain an accurate cross-sampling, quotas are set by day of the week, time and exit. Shoppers are asked to respond to a series of questions, including postal code, age, how much money they spent during their mall visit, and what kind of store they visited. In addition, they are asked their income, point of origin (whether they came to the mall from work, home or the home of a friend), and the amount of time they spent in the mall during the past month.
The data then are taken and benchmarked to trade area levels as well as to the company's own averages. Thus far, Cambridge has encountered remarkably little resistance to the surveys, says Rob Boyle, director of market research. "Statistics show that 40% to 50% are willing to fill out surveys. For the ones who don't, it's usually more a matter of them being pressed for time."
The more worrisome issue, according to Boyle, is obtaining profiles of a sufficient number of people. "Most market analysts hesitate to use a sample size below 400 people. At 1,200 people, we are at a level three times that."
Currently, the customer profiles cover about half of Cambridge's portfolio. "As for the exact impact the use of that information has had on sales, there are so many different factors feeding into that, that it is a very difficult thing to quantify," Boyle says. "But there is no question that you've got to know your customer - who is in your shopping centers - in order to best serve them."
Other mall owners are opting to rely on more futuristic, high-tech measures. They cite such benefits as greater accuracy and immediate, real-time data processing and reporting.
The kiosk connection iPort, an interactive multimedia kiosk from Englewood, N.J.-based Omnitech Solutions, gathers its customer profiling data from two touch-screen monitors installed directly on the unit. It was first deployed in August 1999 at Glimcher Realty Trust's Dayton Mall, in Dayton, Ohio.
iPort features static advertisements as well as full-motion video on its high-resolution plasma screens. It displays an interactive directory that lists which stores are having sales, taking coupons or otherwise offering special promotions.
"With iPort, you're able to learn what shoppers like. You can customize your offerings to their specifications and not waste their time with things they're not interested in," explains David Myers, Omnitech's director of marketing.
Every customer who touches the screen is encouraged to get an iPort membership, notes Myers. Once shoppers do join, in addition to taking advantage of specials, they can begin accumulating redeemable points for free computers or tickets to off-Broadway plays, basketball games and other special events.
Tapping data with CENTERLINQ The new kiosk technology provides mall developers with an excellent opportunity to deepen their relationships with customers, notes Chris Miglino, vice president of business development for CENTERLINQ, a division of Van Nuys, Calif.-based GenesisIntermedia.com.
The company has negotiated deals with several large mall developers, including Taubman Centers Inc., Urban Shopping Centers Inc., Crown American Realty Trust, and Forest City Enterprises.
CENTERLINQ's interactive kiosks, which are set up throughout a mall, feature 42-inch video display monitors. The company's loyalty shopping initiative allows consumers to sign up for a special rewards program.
They can access select websites, view a mall's directory, print coupons and learn about upcoming special events.
Shoppers submit personal information and shopping preferences that are then used in various marketing campaigns. Miglino says some developers are establishing programs to give loyal customers discounts and additional sales information.
To date, CENTERLINQ has produced frequent shopper programs for use in some 20 malls. By the end of the year, the company expects to operate such programs in an additional 45.
"Typically, customer profiling is a big expense for shopping center owners. By renting space in the center, CENTERLINQ can eliminate many of the costs that mall owners ordinarily would incur. For example, when those mall owners try to manage their own databases, generate mailing labels and so forth, it can get expensive," explains Miglino.
"CENTERLINQ is essentially a tenant of the center. By being there, it can lend its expertise in direct marketing to mall owners, not only by helping them create programs within their malls, but also by establishing better relations between them and their customers."
Magic wands At three Atlanta-area regional malls, Indianapolis-based Simon Property Group is operating a high-tech experiment that adds a new twist to customer profiling. Under the initiative, shoppers use hand-held scanners that allow them to roam the malls scanning items they would like to receive for, say, Christmas or an upcoming birthday.
After the customers finish shopping and return the scanners, information about the scanned items is uploaded to a personal web page containing a detailed wish list. Family and friends can then log onto the Internet to view the list, which also can be delivered via e-mail.
The system gives Simon the ability to gather useful information about mall customers and their preferences. The wish lists, for example, help Simon determine which products are most popular among different demographic categories.
That information enables retailers to stay ahead of fashion cycles where, before, they were forced to examine sales data after the fact, notes Bob Covington, vice president of Simon's new e-commerce subsidiary, clixnmortar.com.
Indeed, the Internet is making it easier than ever for the industry to collect information from its customers. Many mall websites now offer free coupons or other incentives, provided that visitors to the sites fill out online questionnaires.
Although information is becoming more plentiful, analysts say the real challenge will be to guarantee accuracy. Standing face-to-face with a customer, a professional surveyor can be sure of basic details such as the customer's gender and approximate age. The same can't be said of the Internet, where anonymity reigns.