David Cummings on Startups

The Experience Economy at the Mall

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David Cummings

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I’m not much of a mall guy. The experience shopping on Amazon.com, especially with Amazon Prime, is amazing, cheaper, and much more efficient. So, today, in an effort to get the kids out of the house, I took my two little ones to North Point Mall 20 miles north of where I live. North Point was chosen, instead of Lenox and Phipps nearby, due to the American Girl store.

Even though my daughter is too little to know much about the American Girl store she loves dolls, and the American Girl store didn’t disappoint. In the store they have a full restaurant, dolls, girl clothes with matching doll clothes, and a spa for the dolls. Yes, you read that right: they style the doll’s hair and clean their face/nails/etc as if they were people. It’s really quite frightening, but girls love it. The line for it was 10 people deep when I was there.

Amazon.com is competing less and less against the mall, especially North Point Mall. Malls and stores in the mall are offering two things Amazon.com will never offer: vertically integrated brands like Banana Republic and experiences like doll spas. Malls are a natural venue for the experience economy and today’s visit was no exception.

Here are experiences I saw going on at North Point Mall:

  • Cafe and doll pampering at the American Girl store
  • Build-a-Bear Workshop where you can build your own teddy bear
  • Food court with tiny tables and chairs the perfect size for toddlers and little kids
  • Carousel (merry-go-round) in the food court for $2 per child (adults not allowed)
  • Train tours for five minutes around the stores for $4 per person
  • Playground inside near Dillard’s
  • Massage kiosk (people giving the massages, not massage chairs)
  • Santa pictures (santa wasn’t there today but I’m confident he was there last month)

This doesn’t even include services inside the mall like haircut places and spas (for real people).

Over time the gap between what Amazon.com offers and what malls offers will grow. Malls are part of the new experience economy.

What else? What are your thoughts on malls becoming more and more about experiences?

Comments

4 responses to “The Experience Economy at the Mall”

  1. jrack34 Avatar
    jrack34

    Great thoughts on the experiences the mall can deliver on. Two examples of other areas where Amazon.com will never deliver on is the ability to try on clothing/apparel or to hear the quality of sound system. For situations like this, you can go to the store to try on the clothes or get your hands on the item, then you can use the Amazon.com Price Check App to either negotiate or buy right on your phone.

    Reply
  2. Chris (@ciaobeau) Avatar
    Chris (@ciaobeau)

    I think malls have no choice but to increase user experience due to poor foot traffic and average user time, but the question is, will it be enough? Department stores are the backbone of most malls representing a large portion of the square footage. With their decline and consistant downward trending, large chunks of real estate will be open with nothing to fill it’s shoes. IT could be cannibalized into smaller shops, and with an increase of independent retailers moving into malls it is a possibility. But why would they want to be buried in a mall when plenty of street side real estate is open in surrounding centers.

    Even clothing should not feel safe in a mall, with the success of zappos.com, everyone in the clothing industry should be worried. While there has not been a proven model outside of shoes, clothing is not far behind.

    I do not think it will be a quick decent, probably more towards with end with major retailers like Wal-Mart and Target ~2015

    Reply
  3. Sanford Avatar
    Sanford

    Very Interesting observation. We recently took our four year old daughter to the American Girl Store and I totally missed on what you picked up.

    We didn’t get out of that store without dropping ~ $100. When we purchased a doll, the sales lady said: “you’ll need to get this and this and this to go along with the doll”.

    There are only so many places you can take young kids, particularly in the winter.

    Totally agree, Malls will have to get interactive (3D) because online shopping is not going away.

    Reply
  4. Brett R Avatar
    Brett R

    Don’t forget that Borders and Barnes & Noble are great places for kids in the winter but gathering places don’t always translate to sales as both companies can attest.

    I do agree that Retailers will need more “experiences” to attract customers to the bricks and mortar store. The American Girl and Build A Bear experience can’t be replicated online. In fact, you drove 20 miles in Atlanta traffic for the “experience” your daughters enjoyed.

    Yet I’d be surprised with kids in tow if you really bought much and certainly didn’t try anything on at the numerous vertical retailers. A lot easier to buy online the next day. In reality, its not Amazon prime the vertical retailers are competing with but their own online stores.

    At the end of the day, the shopping center owners have the bigger problem of how they subsidize the experience stores with a shrinking retailer footprint and still cover the mortgage.

    Reply

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