Guest Blog by Steven Kramer, North America President of hybris, www.hybris.com 

Matching your business’ interests with those of your online customers’ is a delicate balancing act.  On the one hand, you want the customer to find the product that they are looking for, but on the other you also want to influence their purchasing decisions based on your preferences (e.g. if a certain product has a higher margin, there are too many of a particular product in stock, it’s the end of a product line, etc.).

Successful online merchandizing is not enabled by just one tool. It is a mixture of various techniques, the data you have and, last but not least, your own gut feel.  Following are five key considerations to keep in mind when you are evaluating merchandizing tools and your efforts:

1. How good is your data?

The old saying of “garbage in equals garbage out” is as true in merchandizing as anywhere else. Does the tool you are evaluating give you the ability to:

- Effectively administrate, govern and steward the data you want to use?

- Help you to improve the overall quality of your data?

- Ensure consistency across various data outlets and not just your merchandizing tool?

- Give you the ability to define and manage the facets you will later show to your customers?

Ultimately, good data management means good navigation and effective search.

2. Do you think about going global?

Support for multi-language on the front end, as well as in the back end, will be key for a successful global roll-out.  Often tools struggle due to the additional amount of data that’s required for multi-language support.  Keep in mind that, while tools often provide the additional language packs, they come at a significant extra cost and often synonym dictionaries are not available.  Languages such as Chinese or Arabic are a no-go.

3. How complex is your pricing model?

Do you really have only one price per product, as often assumed by merchandizing tools?  If not, because of the approach that merchandizing tools take to index your data, by flattening the data structure, billions of data rows are not uncommon.  Can your tool deal with this Big Data-style situation?

4. Can you create association between products?

Certainly guided navigation and a great search can do a lot, but what’s also really powerful is establishing cross, up or accessory relations.  The set-up, management and handling of bundles is also a very powerful merchandizing mechanism that requires more than a powerful search.

5. Can you create landing pages dynamically?

Your customer searched for a specific brand.  Wouldn’t it be great to have them land on a page dedicated just to that one brand?  Alternatively, they may search for a category, for example, running shoes.  Why not have them land on a page dedicated to running, presenting shoes and additional running gear along with promotions relevant to their search?

The above are guidelines to help you in your merchandizing tool evaluation and overall online efforts.  In a follow-up post, I’ll provide five additional points to consider, focusing on relevancy, promotions, information access, cross-channel and tool integration, to help you drive success with your merchandizing initiatives.

Steven Kramer is North America President of hybris, www.hybris.com. Today’s guest blog is part one in a two part series. Part two will run in January 2013. 

If you haven’t seen this yet, you may want to take notice. According to GiftCard.com, not everyone sees gift cards as a lazy and thoughtless approach to gift giving. In fact, the GiftCard.com Holiday Gift Card Spending Report reveals that giving of gift cards during the holiday season is becoming more accepted and prevalent, and spending on gift cards is expected to go up this year.

Among the report’s findings:

• 49.6% of consumers plan to purchase at least one gift card this season
• More than 40% say they always or almost always pre-plan gift card purchases
• Only 15.6% purchase gift cards as a last-minute option
• Average consumer spending on gift cards is $26.40
• Selection and personalization ranked as “very important” factors when looking for a gift card
• 14.2% of consumers rank personalization as the most important feature for a gift card
• 21% of consumers plan to spend more than last year on gift cards
• Most consumers typically purchase gift cards at grocery store displays or specific stores and restaurants
• 13.1% of consumers purchase gift cards online; 4.7% purchase from their mobile device
• 38.5% rank gift cards as their favorite or usually favorite gift to receive

“Gift cards, for most, are an essential part of the holiday shopping season,” said David Jones, CEO of GiftCard.com. “Not only do they make excellent gifts for everyone, from the hard-to-shop-for relative to a holiday party hostess, but they save time and effort in an already busy season.”

Sure, GiftCard.com is biased when it comes to gift cards. After all, it prides itself on being the “one stop shop for everything gift card.” But that doesn’t mean GiftCard.com is wrong. Seems to us that gift cards really can be the perfect gift around the holidays.

When you can’t decide on the perfect gift for someone, one of those prepaid gift credit cards, or a gift card to a favorite store or a nice restaurant, is something that says, “Go treat yourself to something special on me.” Don’t be afraid to pull the trigger on those gift card purchases this holiday season.

Guest Blog By Rikard Bandebo

Black Friday kicked off the holiday shopping season with a bang, providing many retailers with an important consumer spending boost – despite the challenges faced in the wake of Hurricane Sandy. Many merchants attracted more customers by opening their doors on Thanksgiving and expanding their shipping and layaway options to simplify shopping.

The First Data SpendTrend report is proprietary research that tracks same-store consumer spending by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks at U.S. merchant locations.  The 2012 Black Friday SpendTrend report compared Black Friday 2012 spending against 2011 numbers. Findings showed that sales were strong, with the following overall same-store retail growth rates:

• Dollar Volume: +5.6 percent
• Transaction: +3.6 percent
• Average Ticket: +1.9 percent

Retailers experienced a healthy dollar volume growth (DVG) of 5.6 percent during Thanksgiving and Black Friday, compared to 6.3 percent in 2011. Seasonal merchandise discounts lured shoppers into clothing and clothing accessory merchants, who saw a DVG of more than 10 percent. General merchandise stores saw similarly positive results, with a DVG of more than 9 percent; we attribute this to the fact that many of these stores expanded their layaway options and also offered price matching.

Building materials, garden equipment and supply dealing retailers were the leading categories, with a 14 percent DVG (compared to about 8 percent in 2011). Our research shows that this channel’s strong performance results from an overall improvement in the housing market, rebuilding efforts following Hurricane Sandy, and shoppers purchasing holiday decorations.

Retailers’ healthy DVG can be traced back to the fact that consumers increased how much they were spending during each shopping trip – there was nearly a 2 percent increase in average tickets. Merchants helped drive sales and spending by decreasing their focus on clearing out inventory through lower margins. While the reduced discounting did not affect general merchandise stores’ DVG, it did result in a lower figure for furniture and home furnishing stores.

From a geographic perspective, most regions in the U.S. saw a boost in DVG. Much of the weather across the nation was crisp and clear, helping drive consumer foot traffic. The West and the Southwest led all other regions with DVGs of 7.2 percent and 6.7 percent, respectively. Spending was healthy in New England and the Middle Atlantic, with DVG of 1 percent and 4.3 percent, but they were the slowest growth regions since many consumers had reassessed their holiday budgets after having purchased generators and building supplies in the aftermath of Hurricane Sandy.

Overall, this year’s Thanksgiving and Black Friday showed impressive growth considering tough 2011 comps and that the retail DVG has been around the 3 percent range for the past few months. The holiday spending rush seems to have started off well and merchants will monitor shoppers in an effort to sustain the growth throughout the season.

Rikard Bandebo is vice president and economist at First Data. First Data SpendTrend, a macro-economic indicator, is based on aggregate same-store sales activity in the First Data Point of Sale Network. First Data SpendTrend does not represent First Data’s financial performance.

Guest Blog By Pat Conroy

Driven by changing consumer preferences, the U.S. retail landscape appears to be shifting.  The market share of the grocery and mass merchandise channels, while still dominant in CPG, has eroded as market shares of dollar, club, and convenience stores increased in recent years. CPG companies looking to stay on top of these shifts should not ignore the potential for the dollar channel, especially multi-price-point dollar stores, to play a growing role in national brands’ future performance.

In a recent Deloitte survey, CPG executives acknowledged consumers’ growing affinity for today’s new and improved dollar stores, and the shift in their views on the importance of different channels over the last three years is testimony to the significance of this trend. Sixty-two percent of the CPG executive respondents expected sales at dollar channel to increase over the next three years. These executives also expected dollar stores, in the same timeframe, to increase product choice by increasing the number of SKUs (85 percent), expand their geographic presence (75 percent), allocate more shelf space to private labels (58 percent), and improve in-store product presentation through means such as lighting and in-store displays (57 percent).

Looking ahead, CPG companies seeking to capitalize on the dollar channel’s growth should consider ways to appeal to the dollar channel’s increasingly diverse customer base while guarding against channel conflict and cannibalization. Core dollar-store consumers are being joined by new dollar consumers who shop at dollar stores less out of sheer financial necessity, but because they appreciate the dollar store’s national brand offerings and the improved in-store experience. For many CPG executives, the attraction of the dollar channel’s growing customer base is mitigated by the specter of rising channel conflict with mass merchandisers and grocery stores.

Our research shows that dollar stores are an important and profitable channel for some CPG companies that have tailored their businesses to suit the channel’s distinctive nature. These CPG companies appear to have cracked the code for selling through the dollar channel in five distinct areas:

• CPG companies begin with a channel- and often retailer-specific approach to brand, product strategy, and innovation.
• They pursue tailored merchandising and assortment strategies for the dollar channel at the store level.
• Their pricing and trade promotion strategy acknowledges the potential for channel conflict by providing unique product-price value propositions in each channel.
• They partner with dollar retailers to adapt their supply chain, distribution, and operations to the dollar channel’s unique logistics and warehousing environment.
• CPG companies serious about succeeding in the dollar channel create channel focus by resourcing dollar stores with strong account and support teams that include marketing, product packaging, and supply chain expertise.

One would think that the dollar channel should be an important and strategic channel for most national brands, yet 42 percent of the consumer product executives surveyed do not view the dollar stores as a strategic channel. The CPG executives surveyed and interviewed seem, albeit gradually, to be coming to grips with this new reality.

Pat Conroy is vice chairman and U.S. Consumer Products leader at Deloitte LLP, a national practice that provides audit, tax, financial advisory and consulting services to consumer product manufacturers.  The national Consumer Products practice comprises more than 2,400 professionals, and is one of the largest industry practices at Deloitte.  Pat has more than 20 years of experience leading both domestic and international consulting engagements within the consumer products industry.  He has been a long-time advisor to many of the consumer packaged goods (CPG) industry’s leading chief executive officers and senior executives. His experiences range from strategic business planning to detailed implementation of operations and technology initiatives.

As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

Retail showroomers aren’t all cherry-picking deal-hounds– they’re potentially your best customers. Here’s how to leverage the tools of loyalty management to win them over.

Guest Blog By Rick Ferguson and Bill Hanifin

Before the advent of mobile devices, shoppers had to take pricing promises on faith. Today, it takes 30 seconds on an iPhone to figure out that the 52-inch flatscreen TV in your store is 14 percent cheaper online. As smart phone penetration increases, consumers are relying ever more on mobile devices to navigate their lives, and they will only grow more adept at finding the lowest price online.

Showrooming — the use of mobile devices while in a store to find and buy a product at a lower price online — has sparked a retail war. On one side we find the big-box retailers, who have become the global poster children for those afflicted with terminal showroom-itis; on the other side we find online retailers, the go-to villains for those looking for a scapegoat to blame for their sliding sales and disengaged shoppers. And in the middle of the war we find consumers themselves, who are guilty only of pursuing their own self-interests.

However, as we’ve seen from the recording industry, which responded to a permanent change in consumer behavior wrought by disruptive technology by declaring war on its own customers, fighting showroomers will not win the battle against showrooming. It will only serve to alienate retailers’ customer bases.

So how can brick-and-mortar retailers keep their sales in store? One way is by embracing showroomers by leveraging the tools of loyalty management. A recent study conducted by Aimia reveals a great deal of information about retail showroomers that hasn’t been reported in the press — particularly in regard to their attitudes and opinions about brand loyalty and reward programs. We learned that showrooming behavior indexes higher among younger consumers — three-quarters of US showroomers come from the Millennial generation. And Millennials also over-index on loyalty programs: 77 percent of Millennial consumers claim participation in loyalty and reward programs.

And as all veteran car salespeople know, a customer doesn’t come onto the lot unless he’s ready to buy. So how can retailers deploy the tools of loyalty management to convert showroomers into paying customers?

• Use hard benefits to reward desired behavior: The value of hard benefit rewards such as loyalty currency lies in the currency’s function as a lever to influence customer behavior. When you find a showroomer looking up the price of that 52-inch flat screen, invite him to join your reward program—perhaps with a rich bonus offer on his first purchase. The cost of the bonus points is far less than the gross margin contribution you’re losing on showroomed products.
• Link soft benefits to upper-tier smart phone users: By lavishing showroomers with exclusive access and experiential rewards based on customer data, you’ll enjoy the opportunity to provide a truly unique customer service experience.
• Steal the online thunder: Offer your own showrooming app that combines price transparency with product reviews. An app that is available only to your loyalty program members ensures that every action conducted through it results in proprietary data that goes to you – which is far more valuable than a lost sale.
• Deploy an aggressive partner strategy: Work with and share opt-in data with partners and suppliers to combat showrooming together. By offering exclusive products, you’ll draw more people to your store to buy, which benefits retailers and suppliers.

Retailers have an unparalleled opportunity to adopt current technology to create new value propositions that reward customers for physical visits, promote personal service, and deliver both relevance and value. Success will require you to embrace this technology, rather than abdicate to your online competitors.  So when you wake up in the middle of the night in a cold sweat, worried about showrooming, take heart—the tools to build profitable relationships with showroomers are already at your disposal.

Bill Hanifin is Consulting Practice Leader for Aimia, while Rick Ferguson is Aimia’s Vice President of Knowledge Development (www.aimia.com).

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at eric.slack@phoenixmediacorp.com.

Guest Blog by Thom Blischok

The 2012 holiday season is going to be one of change. The old pattern of rushing out for the impulse buy is giving way to a growing trend of patient, cautious shopping, with more options for getting great deals enabled by technology, according to a recent Booz & Company 1,600-person survey.

The one constant in 2012 is the “lens of affordability.” Every shopper Booz & Co. talked to or surveyed indicated that his or her buying decisions will be determined by affordability. Shoppers will be buying gifts they need more than gifts they want. Across income levels, shoppers say that their 2012 holiday spending will be almost the same as last year’s: between $675 and $725 per family. The historical precedent of a huge gift haul is transitioning to a smaller – yet more meaningful – gift-giving experience. At the same time, holiday celebrations are “in” this year, as the uncertainty of today’s economy continues in the minds and wallets of the 2012 holiday shopper.

Here are three key trends to watch from Booz & Co.’s holiday 2012 research:

1. The search for deals will drive purchase behaviors. Seventy-three percent of all shoppers expect to find great deals this holiday season – an 18 percent increase over 2011. Almost 25 million shoppers will wait until Christmas Eve to fill their shopping carts, a number also up from last year. Retailers already are beginning the “deal dance” with consumers as they position themselves with great offers. Shoppers will let their keyboards do the walking to find these deals, using smartphones to snap pictures in stores and then going online to compare prices and find the best one. This “showrooming” trend will lead to future holiday seasons that are driven by global price and value transparency.
2. Shoppers will be planning more holiday celebrations. Sixty-one percent of shoppers are planning a holiday celebration as a way to give thanks for living through a very tough economic period (up 12 percent from last year). Almost 53 percent of shoppers report that they are planning more than one celebration this year, a 17 percent increase over 2011. All families who responded, regardless of income, want to celebrate as affordably as possible – and making a fine dinner is at the top of their holiday list. There will also be significant entertaining; consumers are seeking intriguing hors d’oeuvres, snacks and treats to feature at holiday festivities. To tap into this, retailers must become creative in offering the tastes, smells and delights of the holiday season. They can help home cooks create innovative, large family meals with interesting new side dishes and desserts as well as labor-saving ideas, such as ready-washed and precut meal assembly ingredients.
3. Gift-giving will be reshaped by affordability, “light” indulgences, and family categories. Seventy-six percent of shoppers indicate that they will “pause before purchase” to ensure they make the right gift decision. Impulse purchases appear to be on the decline as shoppers stretch every holiday dollar. However, 52 percent of shoppers plan to splurge a little with a luxury gift that their budget can handle. For some it will be that special handbag, for others a home appliance, and for others a true holiday meal celebration. Re-gifting will also be on the rise this season: Presenting last year’s gifts with a little value-add (like a small accessory) will become a gift-giving strategy embraced by 32 percent of American shoppers. Expect categories such as home entertainment, basic apparel, exotic kitchen appliances (like next-generation coffeemakers and food processors), smartphones and tablets, interactive toys and downloadable gifts like e-books to top wish lists.

It would be fair to say that the 2012 holiday season will be one of careful and controlled spending, lots of celebrations for surviving another economically tough year and purchases that are determined largely by the search for the deal.

Thom Blischok is the chief retail strategist and a senior executive advisor at Booz & Co. For more information, visit www.booz.com.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.

Guest Blog by Shelley E. Kohan

Many of us have been retailers for a long time. Once upon a time, we wrote sales checks (yes, with a pen) and calculated labor hours using manual time sheets. But what has always set us apart has been our unique, innate ability for instinct and intuition. We have remained in the business successfully by making decisions based on our experiences in the field.

We are retail warriors. Occasionally, we will back up our decisions with data. Having jumped on the technology bandwagon for the past decade, I am surprised to find that what we know and what we do about it may sometimes be very different. A case in point is the following post-2011 holiday analysis, which reveals some staggering insights from retail warriors across the United States.

As we enter the 2012 holiday season, here are some insights to help deploy your resources more effectively for increased sales to drive this year’s performance. After analyzing more than 40 U.S. retail store chains’ performance and examining the in-store behaviors of more than 20 million shoppers between Thanksgiving weekend and Dec. 31, 2011, here’s what we found:

1.     Don’t Underestimate First Weekends in November.

Retailers are missing early season traffic by not having enough staff the first two weekends in November. Many retailers extend their existing staff first before hiring new associates, or new hires start but do not hit the selling floor until the third week of November. Hired, trained sales associates need to be on the floor and ready to sell by the first Saturday of November.

2.     The Post-Christmas Sale Is No Joke.

The time after the Christmas holiday remains a great opportunity for most retailers. Shoppers continues to hit the stores only to find the holiday help is gone! Obviously, conversion drops due to returns, making it difficult to maximize sales and service. However, the store traffic still represent a “selling opportunity” − especially with the escalating trend of gift cards as holiday gifts.

Am I crazy to suggest one and two above? Do I get that payrolls are tight and stores simply cannot add expense? (Of course I do, I’m a retail warrior.) In-store analytics extract the details from the data and provide you with the knowledge to maximize the nuggets of information you discover. Simply adding staff will not give you a full return on investment for the suggestions above. Instead, do the following:

3.     Shift Staffing Hours.

Move hours out of the middle of the week when most retailers are over-staffed. Also, hire in shifts or increments to accommodate the high weekend traffic in November. By looking at the by-hour and by-day traffic-to-conversion comparison, there will be opportunities to shift staffing to when you need it most.

4.     Treat Dec. 26 Like Black Friday. 

Most retailers experience similar traffic on Dec. 26 as they do on Black Friday. Make it all-hands-on-deck. (We think we do, but it’s worth double-checking staff hours for this day.)

5.     The New Year’s Eve Holiday is Marketing’s Best-Kept Secret.

Shoppers are still out in the stores and want to shop. Give them incentives to buy! Create events in the store to drive traffic and conversion.

The overwhelming majority of holiday buying still occurs in brick-and-mortar stores – 95.5 percent of it, according to the U.S. Department of Commerce. To all the retail warriors out there, let’s decide to make it an even bigger 2012 – armed with our killer instincts and the supporting data.

Shelley E. Kohan is vice president of retail consulting at RetailNext and has more than 20 years of experience in the retail industry, focused on luxury brands within the department and specialty store sector. She also is an instructor at the Fashion Institute of Technology of the State University of New York in the fashion merchandising management program. She can be reached at shelley@bviretailnext.com.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.

Guest Blog By Dana Warszona

The evolution of retail has hinged around the ability to buy and sell goods in the most efficient way. Today, it’s all about consumers and ensuring their shopping experience is engaging, seamless and convenient. Shoppers have higher expectations and retailers must find ways to continue improving customer service in the store – especially during peak periods. In response to this demand, retailers are deploying mobile point-of-sale (mPOS) technology as a strategy for improving customer satisfaction and streamlining in-store operations.

Motorola Solutions conducted a survey among the retail, hospitality and field service industries that revealed the interests and experiences with the use of mPOS. The results illustrated that retailers are beginning to embrace mPOS as a means for delivering increased customer service and payment convenience, while gaining opportunities to close the sale. For example, 71 percent of retailers surveyed indicate an interest in mPOS and are using or planning to use it to improve customer service, inventory management, pricing and merchandise returns applications.

Additionally, mPOS provides retailers with the opportunity to potentially eliminate the high cost of traditional cash registers and accept customer payments from anywhere in the store. This not only reduces customers’ time spent waiting in line, but also decreases time they might spend pondering their purchasing decision. The result is an improvement in the bottom line, because retailers are in a better position to close the sale. Below are a few other key findings from the survey:

• Sixty-six percent of retail respondents are interested in mPOS, while 42 percent of retail respondents are currently piloting or starting trials within the next 36 months, and the majority is focused on using mPOS for sales associates on the store floor or line-busting.
• In December 2011, Motorola’s holiday shopper survey found that one-third of store visits ended with an average of $125 unspent due to missed opportunities to purchase. The survey also found that inefficient payment processes were one of the leading contributors to those lost sales. More than 43 percent of shoppers agreed that their shopping experience improved when store associates used mPOS devices.
• Sixteen percent of surveyed retailers currently have an mPOS solution deployed, while less than 9 percent have completely mobile checkout systems.
• On average, retail respondents anticipated replacing more than 36 percent of their fixed POS as a result of migrating to an mPOS

Shopping today is truly becoming an interactive experience. The retailers that embrace connectivity and engagement will be those that win the hearts and wallets of shoppers.

Dana Warszona is the senior marketing manager of retail solutions at Motorola Solutions.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.

By Russ Gager

The differences in luxury retailing were highlighted during a tour of three major high-end shopping malls on Chicago’s “Magnificent Mile” – Michigan Avenue – at the conclusion on Oct 2 of the 2012 Research Connections conference held by the International Council of Shopping Centers (ICSC).

Tour attendees were given guided tours of the malls by representatives of their management companies. First up was The Shops at Northbridge, which uses its innovatively designed mall to draw shoppers from the pricey rents of Michigan Avenue to the Nordstrom that anchors the rear of the mall, which is located one block behind Michigan Avenue on a street with more reasonable rent.

Since 2008, The Macerich Co. has owned and managed all the retail within the nine-block Northbridge complex that includes several hotels, office buildings and another retail complex. Approximately 30,000 hotel rooms are near The Shops at Northbridge, so the mall attracts both visitors and residents. Macerich has created promotions to increase residents’ use of the mall and is using a temporary promotion by Cadillac to spur sales.

The next stop was further down Michigan Avenue across Michigan Avenue from the historic Water Tower, which survived the Great Chicago Fire in 1871. Named Water Tower Place, the mall is managed by General Growth Properties (GGP). Built in 1976, GGP replaced a former Lord and Taylor with a series of stores in 2008.

The prime first-floor space opposite Macy’s was leased to American Girl Place, and as the vertical shopping mall ascends, retailers like Adidas have taken over Lord and Taylor’s former space to draw shoppers to the back of higher floors. Eleven new retailers were introduced in 2008 to the mall, and GGP says it has introduced new stores to 60 percent of the mall. Level 2 is for families, with a Lego store next to American Girl Place’s second floor. Level 6 is for teens and has acquired popularity on social media as a meeting place.

The final stop was at the 900 North Michigan Shops, which is anchored by Bloomingdale’s in the rear of the mall. The mall features high-end, exclusive shops, some from London and other unique ones from local entrepreneurs. Managed by JMB Financial Advisors LLC, the mixed use structure also houses a Four Seasons Hotel, 300,000 square feet of office space and 154 luxury condominiums in two towers.

Approximately 30 percent of the mall’s sales are from residents, JMB says. The mall is noticeably quieter with a lower level of retail traffic and tourists than Water Tower Place, but JMB says the shoppers have a higher per capita level of consumption.

Smaller groups of ICSC attendees ventured out of the Fairmont Hotel where the meeting was held to explore nearby State Street’s new Walgreens concept store, the new City Target in the historic Carson Pirie Scott and Co. building and the historic Macy’s – formerly Marshall Field and Co. – along with the variety of retail options within walking distance.

Russ Gager is the editor-in-chief of Retail Merchandiser magazine. He can be reached at russ.gager@phoenixmediacorp.com.

By Russ Gager

Although shopping centers and malls may be built out in the United States, there still are opportunities to renovate them and take them more upscale through the addition of new tenants and improved amenities, David Contis, president of Simon Property Group told the 235 attendees at the International Council of Shopping Centers (ICSC) at the 2012 Research Connections conference at the Fairmont Hotel in Chicago Oct 1.

With 164 malls worldwide and 34 properties, Simon Property Group is adding upscale tenants and sliding doors, better seating and bathrooms, and children’s playgrounds to more than half of its retail portfolio to improve the properties’ market shares, Contis said in a wide-ranging discussion moderated by John Riordan, ICSC past president and lifetime trustee.

Contis also is bullish on incorporating mobile retailing into the brick-and-mortar shopping experience. He pointed out that Amazon.com wants a retail store and Apple relies on them. “At the end of the day, the Internet is moving more in our favor,” Contis asserted. “People still want to touch the merchandise.”

He used as an example a banner that pops up on a retailer’s website when a customer is ordering online that asks whether the customer would like to pick up the item at a nearby mall’s store instead of shipping it. Contis also pointed out how Apple uses its in-store computer classes to soft-sell additional hardware and software, something it cannot do on the Internet. Geofencing can be used to restrict customers’ in-store Wi-Fi access, he said, but he stressed positive synergies with online and mobile retailing.

Contis acknowledged the current trends toward building and converting malls to lifestyle centers and outlet malls or hybrids of conventional and outlet stores, but predicted that growth of those eventually would slow. He also praised the growth of retailing in Brazil and China, and the collection of sales taxes on Internet purchases to level the playing field with brick-and-mortar stores. Overall, his message was to take advantage of the changes in retailing by innovating rather than trying to block, ignore or reverse them.

Russ Gager is the editor-in-chief of Retail Merchandiser magazine. He can be reached at russ.gager@phoenixmediacorp.com.