The Psychology Of Shopping
With the growth of internet shopping, it’s easy to understand why consumers choose to purchase goods from the comfort of their homes. Online shopping allows people to compare prices, get better deals and enjoy the convenience of having goods delivered.
With this in mind, one would expect to see online portals putting physical retail outlets out of business. Instead, new malls are opening at a rapid rate in South Africa. Furthermore, according to research by Morgan Stanley Capital International (MSCI) Real Estate South Africa, the size of malls has been increasing steadily since the 1990s. In this country, as well as globally, malls have become big business by adapting to changing consumer markets.
So at a time when consumers have more convenient shopping options at their disposal, why are malls continuing to grow in popularity, with more being built each year despite an already saturated market? And how have malls in South Africa adapted to the changing nature of consumer desires?
The changing nature of modern malls
Traditionally, malls were simply a complex of one or more buildings where numerous retail outlets could be found under one roof. The modern concept is much more complex.
Jane Lyne-Kritzinger, managing director of Youth Dynamix, an agency specialising in marketing to young people, describes the changing nature of modern-day malls this way: “To millennials it is all about the experience and the engagement. The most critical factor is the inclusion of an awesome space for social gathering. Millennials love spending quality time with friends, and with limited safe places, few green spaces and busy homes, malls are just that – the place to connect.”
Bronwyn Williams, future finance specialist for Flux Trends, agrees: “Today’s shoppers, especially Generation Z, want to spend their time and money on experiences rather than on stuff. For this reason, we are seeing mall tenant mixes shifting towards more service-based retail concepts, such as salons, gyms, health and wellness facilities, and away from apparel and fast-moving consumer goods (FMCG) type stores. It also means if malls want to attract these types of shoppers, they need to give them a reason to go to the mall in the first place – an enjoyable shopping experience, worth talking about, photographing and/or sharing on social media.”
She says with the growth of technology consumers are no longer drawn into malls simply to purchase items that they could buy more easily online, but by unique experiences – which is why we see the rise of pop-ups, installations and boutique concept stores such as the Magnum ice cream pop-up at Sandton City.
How malls encourage consumers to spend
Although the nature of malls has evolved to accommodate the needs of the modern consumer, retail remains a primary function of shopping centres. So these need to be designed in a way that encourages potential consumers to spend their cash, thereby making the mall an attractive option for traders looking to set up shop.
Despite the prominence of e-commerce, malls continue to be big business in South Africa. Not only are more being built each year, but malls are becoming larger to accommodate the multi-faceted demands of the consumer. The size and scope of the establishments as well as layouts, which are intentionally designed to confuse, can be a source of frustration for consumers.
Choice, a leading Australian consumer advocacy group, says people losing their bearings in a mall means they take longer to get to their final destination – and in the process become exposed to other stores they had no intention of visiting. Often consumers respond to this “scripted disorientation” by making impulse purchases, known in the industry as the Gruen effect.
According to the financial information portal MarketWatch, placement decisions also play an important role in increasing a trader’s exposure and reach to potential customers. Food courts, cinemas and major department stores are often strategically placed some distance away from a mall’s entrance, forcing people to cover more ground, says MarketWatch. They’re then exposed to a larger number of smaller stores, regardless of whether they had any intention of shopping. Similarly, the decision to cluster similar stores close to each other is a way of exposing a captive audience to new brands.
As is highlighted in the International Council of Shopping Centers’ Envision 2020 report, malls have had to adapt dramatically in nature and function in order to stay competitive in a retail market dominated by more efficient, technologically savvy options. Modern consumer demands have also driven these changes. Malls are no longer simply spaces to shop. While retail remains a key function, malls act as a safe hub where people can congregate to enjoy social experiences. As such, they play host to other facilities such as cinemas, restaurants, bars, casinos, pop-ups and children’s play areas. This multi-faceted scope also serves to create a larger captive audience as people at a mall with no intention of shopping are exposed to products. In turn malls are laid out in ways that maximise this exposure, increasing potential revenue for traders while giving consumers the experience they’re looking for.