A New Problem for Retailers: Consumers Hate the Mall

It's official: The mall is boring, and that could turn into a big challenge for major retailers.

A study conducted by the University of Pennsylvania's Wharton School and the market-research firm Verde Group registered a critical complaint that is keeping consumers from spending more time at malls. Cookie cutter malls have lost their appeal. The study suggests that efforts to revitalize malls, which remain critical to chains from Nordstrom and Saks to JCPenney and Sears, may be more difficult than a lot of retailers hope. Paula Courtney, Verde Group president, said core consumer groups are tired of the same old stores and restaurants. A lack of diversity in the stores they find at the mall turns off 18-to-24 year-olds. They want a mall that reflects their interests and values, with more attention paid to the environment and unique shopping experiences. Going to the mall is an investment in precious time, and 18-to-24 year-olds told researchers, "if everything is the same, why bother?"

The problem, in a slightly different form, extends to the group that spends the most money in the mall, 25-to-50 year-olds. Their biggest gripe is the menu selection. Unattractive food courts that simply provide the same chain restaurants available in any other mall turn them off.

Consumers who are bored with the stores and food available don't spend as much time there, and the Wharton/Verde study demonstrated that the more time folks spend at the mall, the more they spend. So investing in diversity of experience is in the interest of mall operators.

What might be particularly scary for today's retailers it that the study suggests that the chain concept is wearing on consumers who have been embracing uniformity of offering and experience at retail for 30 years. Hence the success of Target -- or McDonald's, for that matter.

Some major retailers may have picked up on the trend well ahead of mall operators. Witness Wal-Mart's introduction of new formats such as Marketside and Target's roll-out of new prototypes, including specialty layouts for stores in urban environments.

Macy's though, has just finished taking all the differentiated regional department stores it has acquired over the past few years and homogenized them. So now malls that once featured Burdines or Marshall Field's department stores now have nothing to offer but Macy's. If consumers really do insist on diversity, Macy's timing suddenly looks very unfortunate.