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Shoptalk Q1 2013

Building a Shopping Centre Brand

Positioning a shopping mall to differentiate it from the competition is increasingly important in Chinese cities.

The marketing age is thriving in China. On every main street in every city, consumers are bombarded with ads, videos and imagery promoting branded products and services. This panoply of choice is a major influence on consumer behaviour, and as the store portfolios of shopping malls become increasingly similar, magnetizing and retaining customers is proving a tricky challenge.

The fluid growth of China’s retail sector places a strong emphasis on market positioning. "Marketing and promotion are high-priority concepts for mall developers in China, but the quest is to create the best shopping experience for customers and tenants in highly competitive markets," says Marcus Dee, Associate Director, Retail Asset Management, Greater China for Jones Lang LaSalle.

A recent research report by Mintel noted brand loyalty among Chinese urban consumers "remains extremely hard to find… spending patterns and brand preferences shift between cities, regions and age groups." As a result, shopping centre owners are trying to better understand what consumers actually want – and how to encourage them to want more of it.

"Chinese retailing has changed considerably since the 2008 Beijing Olympics. Consumers are more sophisticated and more familiar with the influx of international brands," says Justin Teo, Co-owner of Beijing Kroznot, a China-based mall marketing consultancy specializing in the retail sector. "Developers therefore need to consider the prospect of a shopping centre, including the hardware, software and tenants, quickly becoming a commodity, and create a strong brand identity and positioning strategy to differentiate their brand from the competition."

Overlapping Branding Objectives
The successful marketing of a shopping mall synthesizes two contiguous goals: improving financial performance and enhancing its public image and identity. Achieving these objectives means creatively appealing to the target audience’s hard-wired need for personal identity. Engaging with consumers keeps them interested – and ultimately spending – and promotes the mall as more than a place to shop, but a social space that you can also shop in.

The starting point for developing a shopping mall brand is to rigorously analyse its strengths and weaknesses, says Justin Teo. "It's important to ask yourself 'how and why is this mall different?'" Kroznot undertakes local market research to demonstrate where the mall’s strengths are in terms of potential growth, and also the challenges from the competition, because there may be several other malls concentrated within a small radius. "The results of our analysis enable us to set the direction for a marketing strategy that presents the mall as a lifestyle destination for a desired customer base," says Teo.

Utilizing Common Areas
A proactive marketing strategy will take a long-term approach, and can even be incorporated into the way a shopping centre is planned and built. The building itself can be a strong branding asset. Working with the architectural firm on the design and layout of common areas enables operators to direct traffic and footfall through the mall from day one.

"Flexible, quirky designs of common areas can help drive marketing and positioning efforts once the shopping centre is open," says Henry Crabb, Senior Manager, Retail Asset Management, Greater China for Jones Lang LaSalle. "For example, a pillar that doesn’t block sight lines can facilitate a large LED screen for visual promotions and interactive gaming events without affecting the basic fabric of the building."

Successful malls utilize public spaces as a commodity, with the central areas dedicated to performance and events venues or a museum. These spaces are used to host free shows, exhibitions and performances, or events such as gardening or golfing contests that capture the imagination of visitors and encourage them to stay longer.

The monthly magazine of the International Council of Shopping Centers even has a regular section entitled 'The Common Area', underscoring the importance of non-retail spaces for brand marketing initiatives. By creating a year-round programme of carefully targeted events the mall places itself in control of the overall marketing strategy, rather than allowing individual store and product brands to drive their own traffic through roadshow events.

Creating Community Links
The architectural structure can also be utilised to create deeper links with local residents. Placing a shopping centre as part of the community can include a fitness centre, athletic club or basketball court on the upper or basement floors, and sponsoring local sports teams. These trends are likely to continue.

Beyond the financial and promotional objectives, marketing the mall as a brand helps counteract evolving challenges, such as the advance of online retailing. Shopping centres are responding by introducing more experiential branded elements, including interactive mall guides, video screens, events booths, family-oriented facilities and food-based retail and dining. These incentivise families to spend more quality time together in a shopping centre, and also tap into discretionary spend.

Placing the mall at the heart of the online community as well as the physical community is another branding objective, particularly as younger consumers are more responsive to social media and applications-based promotions. Social media is increasingly a place where hearts and minds can be won or lost in China – and can prove effective for interacting with shoppers and creating a distinctive identity for a mall.

As product brands battle for the online and offline attention of consumers, integrating both elements should form the basis of a strategic positioning strategy for shopping centres in China.