Taste of the Future at Shopping Malls
Marketing Expert: How New Dining Options Are Spicing Up Customer Experience
As shopping malls continue to suffer from declining visits, stores are hoping that subbing out the food court burger and fries for avocado tartines and shrimp poke bowls will get customers hungry for more than just their next meal.
Home furnishings retailer Crate and Barrel is the latest to give it a try, with The Table at Crate pairing a James Beard-nominated chef with a modern design aesthetic. It’s part of a growing number of establishments mixing upscale dining and individual retail stores, along with high-end rivals RH and Terrain, and Lululemon, which opened its first restaurant last month.
The trend is beginning to reshape some American shopping malls into a destination, said Jie Zhang, professor of marketing and the Harvey Sanders Fellow of Retail Management at the Robert H. Smith School of Business at the University of Maryland. Restaurants have the power to draw people in, slow them down and make them linger.
“Many shopping malls are not doing well in general, so they are looking for ways to attract shoppers and get them to stay there. They are using a variety of entertainment options, emphasizing the experiential aspect,” she said. That’s why Lululemon also offers yoga classes and why Williams-Sonoma offers cooking demonstrations.
In 2010, there were 35 million visits to malls, according to Cushman and Wakefield. By 2013, the number had fallen by half, to just 17 million. The decline is compounded because consumers spend more when they shop in real life, according to analysts. One study showed that 71% of shoppers spent more than $50 when shopping in a store, compared to 54% who did so online.
But what’s happening at U.S. malls is not happening everywhere. Across Asia, many high-end, destination restaurants are located in shopping malls, which consistently helps drive people to stores, said Zhang.
American malls have always had some dining options. Luxury department stores like Nordstrom and Neiman Marcus have had restaurants, with varying price points and service levels. Nordstrom, for example, has about 200 restaurants today, ranging from the upscale full-service Bar Verde to the more casual Cafe Nordstrom.
And, of course, there’s the food court, filled with quick-serve options that sometimes only range from the lackluster to the awful.
“Cheesecake Factory and PF Chang’s have achieved great success near shopping malls, by catering to shoppers who don’t mind spending a little more money for a better dining experience,” Zhang said.
For Crate and Barrel, Table will not just be a restaurant—it will also be a showroom for the furnishings and cookware that Crate and Barrel sells.
“This really is the direction for brick-and-mortar retailers. You can’t compete with online retailers on price or convenience,” Zhang said. “But you have the real world; use the real world.”