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MALLS WOO BACK OLDER SHOPPERS

BY ANNA ROBATON

For years retailers and their mall landlords have jumped through hoops to capture the attention — and dollars — of teen shoppers. But in the process, some say, they’ve neglected older Americans — especially those over 50.

Now landlords and their department store anchors are eager to get them back, acknowledging that as the financial obligations of older people decline, their spending power increases.

Feeling largely ignored by mall retailers, including today’s plethora of teen-oriented merchants, and seeking a gentler, more convenient experience, some older consumers have migrated to lifestyle and other open-air centers and to freestanding stores.

The percentage of mall shoppers in their mid-60s and older declined considerably in just four years, according to a study published last year by Columbus, Ohio–based consulting firm Retail Forward (see table below). Meanwhile, the percentage of those age 55 to 64 was flat. One important reason for this overall age decline is that vast numbers of busy, middle-aged baby boomers have been seeking more-convenient alternatives, some say.

“Older people really don’t like malls as much as younger people do,” said David Wolfe, a marketing consultant in Reston, Va., who studies the 45-plus population. Malls “are big, have lots of teen-agers, and you have to park a distance from the stores. This is reviving the strip center concept.”

But cringing at such observations, mall landlords and department stores are seeking to reinvent themselves in an increasingly competitive retail environment and have implemented wide-ranging strategies to boost their appeal among mature shoppers, whose economic clout is growing.

Some of the changes, such as the introduction of valet parking and comfortable seating areas, are sure to make malls and department stores more attractive to the youngest shoppers as well. Others are meant to appeal directly to the mature consumer. To be sure, there is a lot at stake.

“You can’t grow if you ignore this group,” says Candace Corlett, a principal of New York City–based WSL Strategic Retail.

Thanks to the aging of the 76 million-strong baby boom generation, the percentage of Americans over 50 has risen somewhat. Already, more than a quarter (27.3 percent) of the U.S. population is that age, according to the 2000 census (see table at right). If current trends continue, this age group is likely to exceed a third of the population by the time its current generation’s young grandchildren finish college.

“Fifty is considered the new middle age,” said Corlett. “People are aging much more youthfully than they used to be, and at 50 they are revving up for a new life stage.”

Not only are Americans aging well, they are also spending more time shopping than previous generations. A national survey released this year by WSL found that the percentage of Americans age 55 to 70 who make four or more shopping trips per week climbed to 35 percent in 2003 from 22 percent the previous year.

“The indication is that as baby boomers get older they are taking their shopping habits with them,” said Corlett. “What older people want as their children leave the nest is ways to be included, and shopping has become an American social pastime.”

Though actual spending tends to decline after age 50, the growing number of older Americans is compensating for that, giving them greater influence as a consumer group. In 2001 those age 45 and older accounted for just over half of the $4.4 trillion in U.S. consumer spending, according to a study published earlier this year by the Washington, D.C.–based American Association of Retired Persons. That is up from 47 percent in 1984, the study said.

“The challenge [for retailers and mall owners] is that shopping isn’t the only thing they have to spend their money on,” said Corlett. Mature consumers also tend to put a lot of their money toward savings and investments, leisure travel and certain big-ticket items, such as that luxury car they’ve always wanted.

In an effort to win them over, mall owners are taking steps ranging from making their properties easier to navigate to adding more tenants that have pull with older adults, including Anthropologie, Chico’s and others that have had a big presence in lifestyle centers.

They are also drawing from a growing pool of specialty merchants that appeal to mature consumers. These include Soma, an intimate-apparel chain that Chico’s is to roll out this year, and Gymboree’s two-year-old Janie and Jack concept, where grandparents can buy high-end baby clothes and gifts.

Such leasing efforts reflect the fact that older adults, freed from the financial obligations of raising children and from the constraints of work schedules, have more time to focus on themselves and their homes. They also have more disposable income with which to do it. These consumers also tend to spend big on toys, children’s clothes and other gifts for their grandchildren.

“We are giving the mature consumer every reason in the world to come to the mall,” says Robert A. Michaels, president and COO of General Growth Properties.

In recent years General Growth has spent hundreds of millions to redevelop its malls at least in part to appeal to mature consumers, a group with a growing presence at the company’s malls, according to Michaels.

General Growth expanded the front of its super-regional Woodlands Mall, in Houston, with a 150,000-square-foot, open-air “lifestyle component,” for instance. The expansion added six new restaurants, including The Cheesecake Factory and P.F. Chang’s, along with such retailers as Anthropologie, Mikasa and Williams-Sonoma. The project also added day spas, hair salons and 39,000 square feet of offices that included doctors and dentists.

At many of its malls, General Growth has added loungelike seating areas, additional rest rooms and valet parking. It has also built more entrances and made parking areas more accessible.

And at some, including Natick Mall, in the Boston area, General Growth is adding apartments that will appeal to mature consumers who want the convenience of living in close proximity to numerous upscale retailers and restaurants.
“At the end of the day, we want the shopping center to be all things to all people,” said Michaels.

So does Los Angeles–based Westfield America Trust, which has set out to transform many of its regional malls into one-stop shopping environments by adding lifestyle merchants, entertainment, restaurants and value-oriented big-box retailers. The hybrid concept, which the company has dubbed Hy-Style, is meant to offer consumers, young and old, more choice. Westfield is also adding new customer services, such as valet parking.

In the San Diego area, Westfield is bringing the first Wal-Mart store designed specifically for a regional mall into its Westfield Shoppingtown Parkway, El Cajon. The 160,000-square-foot store is the cornerstone of a major renovation and expansion. Westfield also has about half a dozen Target stores at its U.S. malls and expects to continue adding discount stores to its properties.

Both Wal-Mart and Target have made older consumers a focus of their advertising, and those efforts appear to have paid off. Last year mass merchandisers enjoyed most-favored-destination status among shoppers 55 and older, according to WSL.

“Generally in Europe, Australia and Japan, you see everything from the equivalent of Wal-Mart to the equivalent of Saks under one roof,” said Richard E. Green, president of Westfield America, part of the Westfield Group, which owns malls in four countries, including the United States. “It is not a foreign idea for us to have discounters in the same centers as traditional retailers.”

Though mall owners and retailers are making strides in their efforts to woo the older shopper, experts say they should proceed with caution, especially when it comes to marketing. Campaigns that are too blatant, they say, could turn off young and old alike.

“No one wants to be identified with the old,” said Corlett. “It is a huge misconception that in order to attract them you have to overtly become an ‘old’ store. You don’t. You need to be ageless.”

Some of the most effective marketing aimed at older consumers focuses on values that are common to them, such as the desire by many people over 40 to simplify their lives and focus on their inner selves, says consultant Wolfe, author of the book Ageless Marketing.

Wolfe points to New Balance, the sneaker manufacturer that propelled itself to the top of its industry in the 1990s with an ad campaign that played on precisely that desire. The campaign’s tag line was “Achieve new balance.” The company’s rapid growth, Wolfe says, occurred even while sneaker sales were declining because of the shrinking number of 18-to-34-year-olds.

“Nike is all about winning,” Wolfe said. “New Balance is about the inner self — stopping to smell the latte.”

Federated Department Stores has embraced that idea of marketing to values rather than age.

“People are stimulated by brands and shopping experiences that appeal to their lifestyle preferences,” said Susan Kronick, vice chairman of Cincinnati-based Federated. “There are people in their 70s and 80s that are contemporary customers in terms of [the way they decorate] their homes and [live] their lives. It is dangerous to stereotype customers.”

To be sure, the company has urged its suppliers to create more fashionable clothing cut for older bodies.

“We have been talking with our suppliers about how to create more great-looking fashionable clothes that fit a body that might not be perfect,” Kronick said. “Most of our market research told us that [mature] women want cool clothes that fit. We have heard this customer’s voice loud and clear.”

Yet many of the changes Federated is trying out are meant for all its customers, not just older adults, Kronick says. In 2001 the company set out to reinvent its Macy’s stores to making shopping more convenient and comfortable: plush lounges outside the fitting rooms, shopping carts, automated price-check devices, in-store signage improvements — all designed for across-the-board appeal.

Indeed, Kronick downplays the implications of the aging of America, noting that Generation Y (those born between 1981 and 1995) is nearly as large as the baby boom set, and the United States has one of the highest birthrates among industrialized countries.

“It is important to understand what the aging customer wants,” she said, “but the most important thing to the long-term health of retail is how many people there are.”

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