The Mall Traffic Myth
The headline in the January 17, Wall Street Journal was scary…”As Shoppers Skip the Mall, Stores Search for Lures.” The journalists, Shelly Banjo and Drew Fitzgerald, were writing about changing shopper habits and the impact on retail stores. Using ShopperTrak retail data to make their case, they noted that retailers got only about half the traffic during the holidays that they saw three years earlier. Their assessment of retail traffic is accurate, but the average reader takes away the notion that mall traffic is in a free fall because of the headline.
The Wall Street Journal continued piling on with another article on retail in the February 21, edition, with Suzanne Kapner reporting on Nordstrom’s shrinking sales. Using the same ShopperTrak data, she noted that “mall traffic halved from levels seen three years ago, according to ShopperTrak.” Oops. As was correctly pointed out in the first article, the ShopperTrak data refers to retail traffic, not mall traffic, but the damage was done. Now the media planning and buying community worries that mall traffic is in a free fall. Guess they haven’t shopped at any large, enclosed “type A” regional malls recently (many of them live in Manhattan), and didn’t notice that they couldn’t get a parking space. But I digress.
Full disclosure…I am the CMO of the Adspace Digital Mall Network, and take a real interest in mall traffic, since the success of our business depends on it. Like most things, the devil’s in the details.
ShopperTrak has a number of different tracking reports used by the retail industry. One, called NRTI, counts the number of people walking into a mall. The sample in the NRTI report is comprised of Type A, regional enclosed malls (pretty closely matching our Adspace Digital Mall Network 211 mall footprint). Another retail tracking report is called the “Traffic Report” (clever) and measures store visits for many types of retail outlets, both inside and outside malls…this is the report that was made available to the WSJ writers. ShopperTrak explained what is going on in Type A malls to us, as follows: “The number of unique shoppers has remained relatively stable over the past decade. However, we have seen a decline in the number of stores a shopper visits. In 2007, shoppers typically visited 4.5 to 5.0 stores per trip. Today, we see a number closer to 3.0 stores per trip.” We have seen a similar “stores visited” figure in our own mall intercept research.
So here’s where the wheels come off…retail traffic is not mall traffic. It’s easy to see how one might assume that the two closely correlate, but the trend lines have diverged significantly since the great recession…no doubt partially driven by online shopping. In the chart below from NRTI data, the blue bars represent mall traffic, and the purple bars next to them represent department store traffic in the same malls. Mall traffic has been essentially flat since 2007, with a very modest dip during the worst of the recession in 2009. Department store traffic, on the other hand, dropped 45% between 2008 and 2010, and has not recovered much. Because “mall” traffic and “retail” traffic are often used interchangeably, malls have been unfairly painted with the “decline in retail traffic” brush. For the record, mall traffic has been flat.
You might ask what mall patrons are doing if they are not visiting as many retailers. We know the time they spend in the mall has not dropped, according to Nielsen. Mall developers have been doing a great job of evolving the mall experience…more restaurants, more entertainment venues…they have invested huge dollars in mall renovation, and the high end mall experience continues to be extremely entertaining. Moms still go to escape their day to day routine and indulge themselves a bit, and teenagers still go to escape their parents and teachers to socialize…some things never change.