In-Depth: Mall Life

I remember an inscription I saw on a T-shirt of a tourist in Istanbul that read “I survived one day in Grand Bazaar”, which may as well be interpreted as “Grand Bazaar firing range. A one-day survival course completed successfully.”

Archeological excavations shed light on the shopping habits of our ancestors in the world’s most significant centers of civilization.

Throughout history in all countries the marketplace always occupied a strategically favorable location within towns and villages. That is why a knowledge of what the word “market” is in the local vernacular (be it a souk or bazaar) will most likely lead a traveler into the historic center of any settlement.

But let us take a look at more recent times. Since the end of the 20th century we have gone a long from the early communist retail enterprises derided by Mikhail Bulgakov in “The Heart of a Dog”, from the featureless Soviet-era shops that always close for lunch, to the rapidly multiplying shopping and leisure facilities of today.

For many Russian cities they have become landmarks no less significant than the monuments to the communist leaders, or art galleries before them.

But from where did those shopping malls come from, breaking into our corner of the world, or rather into our purses? Driven by the desire to lower the price for spices Europeans discovered America (although, as we all know, they mistook the American market for that of India at first).

Some five centuries later, in the 1970s, the urban backwardness of city-dwellers coupled with objective economic factors which made mortgage loans, personal transport and vacant building plots available, brought about a new countrywide habitat, a new style of life.

That created the conditions for the emergence of shopping malls. So let us pay homage to the commercial adventurer of a developer who undertook the daring experiment of linking two box-type department stores with a shopping gallery and building a large parking lot nearby.

A Portrait of Retail Man

Here we should say a few words about a portrait of ‘retail man’ of the Old and New World. In Europe, merchants were highly esteemed, with a considerable number of their customers belonging to the nobility. As a result, the culture of luxury was formed and experience in that field was accrued.

Famous brands like Prada, Gucci, LVMH have a long and rich history. To this day, Spain, Italy and France house haute couture centers. In the U.S. retail has traditionally been in the hands of the middle class with the frontier spirit inherent to the Americans, which brought about the emergence of shopping centers.

Their arrival has undoubtedly changed the life of man just as radically as the invention of the assembly line.

In the years that followed, the malls grew in scale and numbers. Canada’s Edmonton Mall has a space of 480,000sqm; the celebrated, albeit considerably aged, Mall of America in the U.S. has 400,000sqm. By comparison, Moscow’s Mega Malls have a space of 220,000sqm each.

What kind of power it is that drives people into shops and shopping centers forcing them to spend all the cash they have on them and even cash they have not yet earned?

Shopping as a Remedy

In simple terms, the law of growing needs can be expressed as the sequence of “to have – to do – to be”. “To have” is the easiest – you just go and buy. Psychologists recommend what they describe as light shopping – shopping that does not entail long-term insolvency – as quite an effective means of dealing with depression. Unfortunately, it is quite possible to develop an addiction to shopping.

In Spain where developers and realtors study shopping mall concepts like manuals, doctors voice serious concern over the ever-increasing number of patients unable to achieve self-realization without daily shopping. Measures to combat the addiction have yet to be developed. For the time being, the only way to prevent the disease is to know when to stop.

And now we proceed from the question “how much to have?” to “what to have and at what price?” Most ordinary buyers do not regularly suffer from tidal waves or Katrina-type hurricanes, or other acts of God forcing them to buy everything new, from a toothbrush to a sofa.

And after all, how many T-shirts, ties and shampoos does a person need per year in a non-tropical climate? Not so many, actually. In fact, the consumer minimum is always a target buy, i.e. an essential necessity. However, most goods and services are aimed to stimulate impulse purchases. And this is what is called free shopping.

Spontaneous shopping is largely a foundation for merchandising, i.e. the art of arranging goods on the shelves, within the buyer’s sight. The boom in retail sales – in April of 2005 retail sales grew to $20 billion, or 12% more than the same period last year – proves that we can afford to buy on the spur of the moment, not out of necessity.

Moreover, more and more people are ready to pay several times more for an item just because the inside of its collar carries a famous brand name. Such purchases fill people with a feeling of self-importance and consequence.

That is the easiest way of buying a bit of something that will make it possible to step from “to have” to “to be”. The category of “to be”, or to be respectable and worthy, quite often is seen as a synonym of “to have”, or – to have a Mercedes car, a Brioni suit, etc.

At times, even the owners of famous brand names themselves fail to define their target audience. One owner of an expensive lingerie retail chain says that his shops are frequented – in addition to well-off ladies – by students who clearly have sacrificed a lot to save up a couple of hundred euros for a longed-wished-for tiny luxury item.

For many of us shopping has long ceased to be a necessity (apart from shopping for the barest necessity). We shop for fun. The goal of marketing is to create and maintain the demand.

Consumer demand surveys held by a famous spirits brand name have revealed that people develop a stable preference for a certain drink at a time when they barely exceed the legal drinking age. The person may remain loyal to the brand for many years. A more innocent example is an advertising slogan for a famous shampoo: “Good for baby, good for you.”

Another approach is a shift from fun to necessity. Teenage girls dye their hair just for kicks, while for an older woman with graying hair it becomes more of a necessity.

Who Will Be Next?

The demand for goods and service does not emerge spontaneously. A housewife is not likely to frequent the office entrance of a top executive of a chemical concern urging him to invent an anti-scale substance for a washing machine. Rather, it is the other way round: the invention of such a substance is likely to make its use potentially essential, and, consequently, generate demand for it.

Once society reaches a certain income level there emerge macroeconomic and social preconditions for the growth of needs, wishes and demand. Lifestyle changes and conditions are formed for new needs, which, naturally, tells on the interior of shopping malls.

People today have less time to spare and seek to make the most of it by rewarding themselves for the stress and endless pursuit of contracts, deadlines and salaries. Stores that open from 09-00 to 19-00 have almost entirely disappeared from the streets of big cities; no one today is surprised to see a round-the-clock supermarket or coffee house.

Here are some observations of a person – alas, from the last century – on how the changing lifestyle affects retail profiles within shopping malls.

To begin with, there are changes introduced by mobile phones, with nearly everyone today subscribed to a service. In Istanbul, I had a feeling that all the male residents of the city spend their lives drinking coffee, and in Israel it seemed that all the people are either eating all the time or having their hair cut – judging by the number of hair dresser’s and all sorts of eateries.

Mobile phone shops and cafes are mushrooming across Moscow. Judge for yourself: an average European buys a new phone once every 2 to 2.5 years, while a Russian – always after the latest models – every 6 months. An expensive phone is another purchase aimed to declare – or to ring out – the buyer’s social status.

Coffee houses are a well known social and commercial phenomenon which makes it possible to turn several cents worth of prime coffee beans into a costly ceremony aimed at proving one’s affiliation with the “right” class and the possibility of an alcohol-free pastime.

By the way, few seem to be frightened off by the fact that a cup of coffee is more expensive than a shot of vodka. Lately, in addition to the U.S. fashion for coffee houses – Starbucks has made it to Moscow at last – the capital has developed a craving for Oriental tea ceremonies. Obviously, the time of the traditional Russian tea ritual has not yet come.

A good cup of coffee goes well with a good book – an idea that occurred to the authors of the concept of Barnes & Noble a while ago, but that has not yet reached Moscow. But things are looking up as such shops as Bookberry, Top Kniga, Novy Knizhnya, and Litera open in the city.

I was surprised to see a variety of book stores in central St. Petersburg; and after I found myself in one of the central bookshops in Moscow I had a feeling that Russians still read more than anyone else in the world. For comparison: a library in Seoul (S. Korea) has only one shelf for classics, the rest is occupied with comics.

U.S. buyers spend over half their time in shopping malls dining and on leisure, not on shopping proper. Without precise statistical data at hand, I assume that Russians still prefer shopping to leisure, as we have not yet had our fill of enjoyment from shopping.

On the other hand, the harsh Russian winter is a good stimulus for finding shelter from the cold under the roof of a mall, even if you are not driven by the necessity to buy something. The mall as a venue for a pastime is a serious topic and is quite another matter.

The shops in our life are a reflection of our society. They are a mirror of our income and our values. A medium-income family-oriented mall is the most typical example of market positioning that perfectly reflects the realities of our life.

This piece was contributed to Vedomosti by Marianna Romanovskaya, business development manager at the international real estate consulting company Jones Lang LaSalle. The point of view of the author does not necessarily reflect the position of the editors.