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Shopping Centers Today -> November 2003
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MAY I HELP YOU?
Westfield America shifts spending from advertising to customer service
BY DEBRA HAZEL
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Westfield America is shifting its priority from wooing new customers to pampering those it already has, in a sweeping initiative that is affecting jobs and budgets across its portfolio.
Introduced in May at its San Diego-area centers, Westfield Wow (as it is known internally) will be rolled out to the company’s 60-plus U.S. centers next year.
The move involves a companywide reorientation. Westfield has reallocated well over half its advertising budget to the program and has completely overhauled job descriptions, philosophies and practices.
“We’re putting everything we can into this initiative,” said Todd B. Putman, senior vice president of marketing at Westfield. “It’s changed the way we manage, market, even develop a center.”
Concierges, for example, are now expected to roam the centers helping customers, not merely sit behind desks. The company has also established “Playtown” child care centers; other new services include having staff assist customers with heavy packages or stay with those who are locked out of their vehicles until help arrives.
The problem is not getting customers into the centers, says Putman, citing the more than 1 billion visits a year that Westfield, Simon Property Group and other U.S. mall managers attract to their projects. The challenge is to get those customers to walk out with more merchandise. Forty-four percent of shoppers fail to make a nonfood purchase during a mall visit, he says. “That statistic is mind-blowing.”
According to the spring 2003 ICSC Research Quarterly, people buy at just half the stores they stop in during a mall visit; the so-called conversion rate (the percentage of visitors who actually buy something) for department stores is 60 percent, and for specialty stores, it’s 50 percent.
“Traffic is no longer an issue,” Putman said. “Conversion is the major focus.”
Westfield began the process in May 2002 with a series of surveys done by San Francisco-based Decision Point Partners of staff and shoppers around the country. After examining such analogous industries as airlines, hotels and restaurants, Westfield concluded that marketers have been pursuing the wrong goal entirely, Putman says. Instead of encouraging more visits, they should have been promoting greater loyalty. Only new centers should focus on generating traffic, he added.
The program is an extension of Westfield’s Shoppingtown branding program and, in a way, an acknowledgment that branding isn’t enough. “While we had 90 percent awareness [of the Shoppingtown brand], we didn’t have an emotional connection,” Putman said. “I’ve heard over and over again, ‘A mall is a mall.’”
By October Westfield had revamped its staffing, its management training and reward structures and its company communications. Every job description on the customer-service side has changed.
Gone are the fashion and car shows that may have drawn a few hundred more bodies to the mall than usual, but also irritated regular customers, who couldn’t find parking. Westfield dropped Sarah Ferguson, the Duchess of York, as its spokeswoman.
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| Mall staff are now expected to walk the malls, be knowledgeable about stores and their products, and help customers carry parcels to cars. |
“We spend a lot of money on radio and television and end up spitting in the wind,” Putman said. “We’ll take the bulk of those funds and put them into amenities. It will endear us to the customer more and [get them to] spend more often.” Putman declined to disclose how much is being spent on the program, but says that the company has reallocated “well over 50 percent” of its advertising budget.
The corporate headquarters staff presented the idea to the general managers, who were “shocked,” Putman says.
“It was just very different from what we had done for years and years,” said Margaret E. Stephens, SCMD, a regional marketing director at Westfield. “They were used to the season media campaigns.”
The company hired 40 additional representatives and gave them extensive training. A shopper looking for a particular tenant will not just be given directions; a concierge will accompany her to the store and introduce her to the manager. The concierges carry bottles of water to give to shoppers and handheld computers that can print coupons for various mall tenants. Customers looking for a particular item or brand can get a list of stores that carry it.
Concierges are also required to interact with retailers, visiting five daily, to keep them in touch with retail trends.
Westfield’s concept is one of the many ways shopping center marketing is evolving, says James W. “Wally” Brewster, CMD, senior vice president of marketing at General Growth Properties. “We have to re-create the experience with the competition from lifestyle centers and other types of retail.”
General Growth’s marketing staff has been examining its programs too. But the company hasn’t abandoned traffic generation, including strategically conceived special events, because the number of consumers that malls draw is important to corporate sponsors.
While customer service has always been critical to marketing, companies should continue to target specific demographics rather than abandon advertising entirely, said Carolyn J. Feimster, SCMD, president of CJF Marketing International, North Brunswick, N.J. “As long as you don’t forget the basics, it’s a great thing,” she said, referring to Westfield’s initiative.
Westfield began testing the concept in May in San Diego, where it also rolled out the Shoppingtown branding program. The company has a particularly strong saturation in the market, with projects serving various levels of affluence and ethnicity, as well as urban and suburban centers.
So far Westfield Wow seems to be working, according to the company. The average customer expenditure was $97 in April at Westfield’s eight San Diego centers; following the program’s implementation, that has increased to $124.14, Putman says. Shoppers spent an average of 85 minutes per Westfield center in April, but now stick around for 147 minutes.
Though implementation in San Diego has cost between $10 million and $15 million in labor and equipment, that includes start-up costs that won’t be repeated as the program is rolled out to the other Westfield centers, the company says.
“We’re confident we’re on to something that’s the right direction,” Putman said. “We know this is a long-term approach.”
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