Shopping center owners may once have been tempted to take teenagers for granted. After all, generations of Americans have spent a good part of their formative years shopping and socializing at suburban malls. In fact, some of those malls attracted so many teens that landlords felt compelled to institute curfews and other restrictions to keep groups of kids from getting into mischief and putting off the older shoppers.
But today’s teens are in many ways different from what their elders were as adolescents, which has mall owners rethinking their marketing approach. For some, slumping sales among teen-oriented clothing chains has become a sobering reality, as these chains collectively occupy large blocks of space at regional malls. “Many of our malls are heavily dominated by the teen-focused apparel brands, and that category has carried our sales in a very big way,” said Jane Lisy, senior vice president of marketing at Forest City Enterprises. “The softness in that category was a real attention-getter for us.”
Forest City and research firm Alexander Babbage conducted an online study of shopping habits and preferences, in which about 1,000 young Americans between the ages of 13 and 24 participated. The survey revealed that malls continue to enjoy a lead over e-commerce venues among teens and young adults. Landlords simply need to make sure physical stores hold onto that lead, Lisy says. “Unless we, as developers, are going to find a whole new category of retailers, we had better figure out a way to make [youth-apparel] retailers healthier,” said Lisy. “Brick-and-mortar retailers still have an edge over Internet-only merchants — we just need to work harder to strengthen that gap.”
Physical stores are particularly appealing among the younger teens, in part because they naturally have fewer responsibilities and thus more time to shop in person than do older teens and 20-somethings, Lisy says. The survey found that 71 percent of monthly expenditures by shoppers age 13 to 17 occur at brick-and-mortar stores, versus 69 percent for those who are 18 to 24. Perhaps not surprisingly, and for the aforementioned reasons, those younger respondents are also more inclined to socialize at the mall than their older counterparts.
But though teenagers still prefer to shop in person, studies indicate they are doing this less frequently than they were just before the recession, when yearly shopping trips numbered roughly 40 per teen; this has dropped to about 30 shopping trips per teen each year, according to a Piper Jaffray survey of some 7,500 respondents. Indeed, smartphones and laptops have surely changed the equation. “Fewer and fewer teens are going to the mall to just browse,” said Stephanie Wissink, a Piper Jaffray managing director and co-director of investment research. “They can browse at home. Teens are not constrained to what their local mall offers them — they now carry around a global shopping center in their pockets.” Teens frequently use the Internet to research goods they might like to buy before visiting a store, Wissink says. “Our research has shown that the number of trips to the mall is down, but when teens go to the mall, often they have ‘preshopped’ online,” she said.
Shopping center landlords are keenly aware they need to engage this -generation of digital natives both online and in person. Last year Westfield revised an app that enables users to customize the information they receive on their smartphones, by selecting only their favorite shops and restaurants from a list, and which also provides information about events, sales and new merchandise. “The teen shopper is probably one of the savviest consumer groups ever,” said Myf Ryan, Westfield’s director of marketing for the U.K. and Europe. “They are constantly connected online. The digital world is very much integrated into their daily lives.”
At its London shopping centers, Westfield has sought to encourage teens to linger by installing plush leather sofas, armchairs and coffee tables. Westfield London and Westfield Stratford City treat patrons to free concerts Thursday through Sunday. “For the teen shopper, it is very much about being and buying,” said Ryan. “We have been able to create spaces where they are happy just to sit, eat, look around and use their laptops or tablets.”
Today’s teens are shrewd shoppers, given their easy access to vast amounts of information and to retail venues. But they are also surprisingly frugal. Unlike those who grew up during boom times, this current generation of teens is feeling the lingering effects of a long and deep recession; the jobless rate among them is about 22 percent, according to Piper Jaffray.
The Forest City survey finds that those in the 13–17 age group are less brand-oriented and more price-sensitive than those who are 18 to 24. At the same time, respondents in both age groups say they are highly motivated to shop by sales and discounts. Gift cards are an especially popular incentive among them, as are promotional sales at their favorite stores. “This generation grew up during the recession, a time when everyone was trying to cut costs, including their parents,” said Lisy. “Even though our economy is recovering, these deal-seeking habits are still important to young shoppers.”
To help bolster visits and spending among teens, Forest City is working hard to inform them about promotions from the merchants at its malls. Forest City mall websites already incorporate the Facebook and Twitter feeds of such tenants as Abercrombie & Fitch and Aeropostale and also provide things like store coupons, complete with bar codes. At some properties, Forest City is trying to build on tenant promotions by offering mall gift cards, concert tickets and similar incentives to teen customers who spend a certain amount. “We should do a better job of making sure all the deals and discounts our retailers offer are clearly communicated to this demographic,” said Lisy. Teens do like to receive promotional offers and similar information by smartphone, even though mobile devices are also their least preferred method of online shopping, according to the Forest City survey.
Perhaps unsurprisingly, teenagers are fond of brands they think enable them to express their individuality, the Forest City survey reveals; this has helped make Nike a favorite. Among the reasons for the athletics-wear retailer’s popularity is that its partnerships with NBA stars promote clothing lines that help suburban kids cultivate an urban look. “What’s different about this generation of teens versus prior generations is that they are nonconformists,” said Wissink. “They seek experiences over products, and they align with brands that are practical, yet cool.”
None of this is lost on Glimcher Realty Trust, which is in the process of trademarking the term “experience retail” to describe its approach to development, leasing and management. Glimcher Realty wants its shopping centers to offer more than just a place to shop, says its CEO, Michael Glimcher. Furthermore, he says, today’s teens and young adults are “the custom generation” — they prize individuality and seek authenticity in their shopping and in other aspects of their lives. “This is not a group of people who want to do what everyone else is doing,” Glimcher said. “It’s about being authentic.”
Glimcher Realty commissioned a survey last year of about 3,000 respondents to examine what motivates people to visit malls. The survey showed that experiences such as dining out, taking in a movie or participating in community events are among the reasons many choose to go to a mall rather than shop online. The survey also revealed that shoppers want malls to offer farmer’s markets, live music and the like. Roughly half the respondents said they would visit a mall more often if its shops offered experiences such as yoga classes, cooking demonstrations and workshops.
Malls enjoy yet another distinct advantage over online venues in vying for young shoppers in the digital age. “This is an instant gratification,” said Glimcher. “We see young women buying clothes on Fridays and Saturdays that they plan to wear that night. Sometimes they wear outfits out of the store. You can’t do that online.”
As shopping center owners and retailers work harder to woo and keep the attention of the teenage shopper, many are revisiting virtually every aspect of their approach. For some this has meant a renewed emphasis on merchandise displays. Forest City Enterprises, for one, plans to work more closely with its tenants to create compelling displays, especially during special events when teen traffic count is exceptionally high. The firm will gauge the effectiveness of these displays, which may include freestanding showcases throughout a property, by means of a cellphone tracking system to determine the impact on mall traffic, says Jane Lisy, the company’s senior vice president of marketing.
Last summer Forest City released the results of a survey on shopping habits among shoppers age 13 to 24, which revealed that teens are highly influenced by their peers (surprise!) and also by what they see in window displays. “Department stores used to spend a lot of money on compelling window displays, but have gotten away from that,” said Lisy. “Teens are impulsive — you put something shiny in front of them, and they want it.”
Some of the largest teen-oriented apparel chains are also reviewing the ways they go about drawing teens in. At many of its Hollister stores, parent Abercrombie & Fitch has removed the heavy shutters that are the trademark of that brand in an attempt to place greater emphasis on merchandise and create a more inviting storefront, says Stephanie Wissink, a Piper Jaffray managing director and co-director of investment research.
With teens making fewer shopping trips now than in the past, as some studies show, brick-and-mortar retailers need to be sure they are doing all they can to capitalize on each visit, Wissink says. Some may want to re-examine certain long-standing policies, such as prohibiting photography in their stores at a time when photos posted on social-media sites like Instagram draw the interest of many young people.
“Teens are looking for storefront windows to tell a story,” said Wissink, “about what a brand is delivering that season.”