Will London's First Luxury Mall Spur Spending?
Westfield Challenged With Drawing City-Dwellers Not Used to Shopping Centers
LONDON (AdAge.com) -- Regardless of recession, Europe's largest urban shopping center is hoping not just to persuade affluent Brits to keep spending through the downturn, but to adapt to the mall experience, which is largely foreign to them.
The mall is "not a natural environment for urban dwellers," said Nicky Cheshire, director of CBS Outdoor's digital arm, Alive. "I don't go to malls, nor do my friends."
Westfield London is hoping to change that. It opened Oct. 31 as a shopping destination unrivaled anywhere in the U.K. with easy public-transport links, upscale shops, and quality restaurants and services that introduce a whole new shopping experience for U.K. customers. Instead of struggling down rainy streets lugging their bags, ordinary shoppers are treated to novel (for Brits) concepts such as hands-free shopping, valet parking, home delivery and concierge desks.
Still, it could be a tough sell, as malls are not yet a part of British culture. While some out-of-town destinations do good business, they don't tend to attract premium stores -- or premium customers. "It is a cultural leap," said Dan Matthews, business director at Starcom, London. "Westfield will have to change people's set routines. For this audience, it's not just about the shops, it's about popping into their favorite local restaurants with friends. Westfield has been smart and has a good range of restaurants, plus health and beauty options."
Westfield London is one of five projects totaling $4.5 billion the Australian mall operator has budgeted for the second half of the year. In its earnings statement, Westfield said: "There is solid demand for these projects, which are leasing up well." Westfield is aiming for $1.8 billion in annual sales for Westfield London.
It seems the only way to go is up, as the U.K. segment of its business is slow-growing. According to Westfield, in the first six months of 2008, its comparable-mall sales in Australia were up 4.9%, well above those of the U.S. (1.9%), the U.K. (0.4%) and New Zealand (0.2%).
Prada, Gucci, Louis Vuitton, Tiffany and Mulberry shops should go some way toward persuading the middle classes that malls are not just for chavs (a British slang term for white trash), especially with Champagne offered at $15 a glass.
It's not just consumers Westfield is hoping to educate about malls, but also advertisers. Mr. Cheshire's company, CBS Outdoor International, is installing 110 customized 57-inch LCD screens housed in stylish white pods, as well as a couple of giant screens, and is looking to attract a new client base of marketers who have never used outdoor or digital out-of-home.
"We are working on the creative quality," Ms. Cheshire said, "but we have had lots of ads for launch and pre-Christmas from a broad range of advertisers including auto, fashion, games and telecoms."
Each screen is linked to a digital-advertising network, so ads on a 60-second loop can be updated at the touch of a button. CBS and Westfield are taking care not to saturate the mall with digital ads.
"There's so much to see here that you don't really know where to look," said Samantha Grundy, 29. "But I have noticed the ads, especially because they keep moving."
Shop assistants polled by Ad Age agreed the mall had calmed down after the first manic weekend, but even on a gray midweek morning, the place seemed incredibly busy.
Opening fever and holiday shopping followed by January sales will keep Westfield buoyant for the next few months. With a down global economy, the real test will be once the holiday shopping season is over.
"It's certainly not the ideal time to open," said Michael Gutman, managing director of Westfield UK & Europe. "We didn't choose the environment, but we're in this business for the long term. Some of our biggest flagships globally we opened in the early '90s, and some of those are our most successful buildings."