Strategies of Malls, Recession, Shoppers Retreat - Dip in Performance of Malls, Fibre2fashion

The 'R' word, 'Recession' is apredicament behind every country's economy, and is scary to both individualsand businesses alike. Businesses are down with low sales resulting in declinedprofits. Investors are seldom found, or even non-existent; to be expressed in abetter-bitter way. Reduced sales force the firms for a price cut developingprice wars. Businesses dealing with luxury products are hit by the recession ina big way.

The economic slump had broughtmany big organizations to their knees; overnight, forcing many of them to shutdown their operations. It has also hobbled many mall operators. Majorretailers; worldwide have reported a decline in sales due to prolonged economicdifficulties, as consumers refrain from spending because of deteriorating jobmarkets and a resulting lay-offs. Even people who are employed are curtailingtheir expenses due to the insecurity of not knowing how long their jobs willlast.

ShoppersRetreat - Dip in Performance of Malls:

Global slump has deflated themomentum in departmental stores, causing a plummet in their profits. With thesales figures dipping drastically, retailers constantly live a state ofanxiety. Industry analysts predict that the downturn might prove moredisastrous for mall owners. Sellers who deal with luxury products such asMarcus and Saks, Nordstrom, Neiman, J.C. Penny, Dillard, Kohl, and Sears havetheir turnover reaching $3 billion. Analysts predict that their sales figures willslump in the forth coming months. Dillard's and Macy's are working hard to wootheir target customers. Nordstrom has reported a decline of 68% in profits forthe last year. JC Penney's net income was almost reduced to half. Bankruptciesand fallouts from recession have pulled down the shutters of many stores. Mervyn'sand Goody's, unable to ride the tide closed their business in 2008. It isenvisaged that March, April and May might see more closures or mergers.

Financial crisis force theconsumers to go for a compromise with their living style. The cruel twist offate is that, the slowdown is costing many people, their jobs. Retrenchment andlayoffs, being the proverbial last straw on the camel's back, has forced themto restrict their normal expenditures. They avoid certain shopping places, justto avoid the temptation of shopping, and malls top their list. Many of them goin for products which are tagged with attractive discounts. With theaspirational shoppers cutting back, mall owners also fear that once theconsumers are hooked up on buying products with discount, and get used withliving with less, they may not get back to their old way of spending.

Crackingthe Hard Nut Strategies to woo customers:

2009 is expected to be both achallenging and transitioning year, especially for mall owners. They are experiencinga two-fold problem of the consumers and the retailers moving away. Due tounavailability of adequate finance, they have put new projects on hold. Fashionapparel sellers are the most troubled, as they have filled the mall withgarments of the latest trends.

Despite the marring recession has caused, mall owners are optimistic. They positively assert that every recession would be followed by a period of boom for five years. Most of them are keeping focus on their inventories, so when recession turns around, they are well positioned in the market. Strategies are also being adopted to beat the impact of the economic slump. Mall operators are trying innovative ways to charm elusive customers. Attempting to encash the customer's psychology, an array of offers like dance workshops, gifts, scratch and win schemes, and contests tagged with eye-catching prizes are announced. Attractive discounts are also offered by many malls.

Malls would not totally disappear from our planet; however, owners will have to be tactful in utilizing the market potential to have their slice of the pie. When finance is tight, consumers would prefer to spend only on those products that they believe; will improve the quality of their life, or something that is absolutely necessary. The most influential tool of marketing is exploiting this fact and selling the product or service as something which the consumer needs, or make him believe that it will be an investment whose pay-off will improve their life style.

References:

By:

Fibre2Fashion

Published: Mar 2009

'When going gets tough' Strategies of Malls to woo customers

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'When going gets tough' Strategies of Malls to woo customers

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