The new reality of the coronavirus (COVID-19) pandemic has prompted shopping malls and retailers to adapt to new consumer behaviors and needs while adopting health protocols to mitigate the risk of infection. With the holiday season approaching, these establishments are eager to boost sales by providing different options to customers that also ensure their safety.
Adolfo González, president of Empresas Caparra - which manages San Patricio Plaza and Galería San Patricio, among others - and the Puerto Rican Shopping Centers Association (ACCP by its Spanish initials), discussed with THE WEEKLY JOURNAL the industry’s expectations for the holiday season, differences in customer behavior and shopping alternatives that will prevail in a post-pandemic world.
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“One of the things that we did as soon as [the pandemic] began was issue highly strict hygiene measures to prevent contagion and for people to feel as comfortable as possible when they had to purchase something in a shopping mall... But right now, knowing that the high season is approaching, we foresee that it will be completely different. First, people want to celebrate; they want relief from all this stress and people like to give. So, what we want is to create the best experience possible, the safest possible, offering alternatives,” he said.
Commenting on consumer behavior, he acknowledged that there have been losers and winners in sales.
For instance, González noted that throughout the COVID-19 situation, customers have been more inclined to purchase electronic items like computers and newer phone models instead of traditional back-to-school products, which he attributed to the now-standard remote work and learning, as well as leisurewear instead of jeans or work clothes. For electronics, leisurewear, and home décor and improvement, he observed that stores have even reported growth.
“In some cases, sales surpass the ones reported by the same timeframes last year pre-COVID. There has been a very dramatic change in consumer behavior,” he added.
Despite the economic pitfalls that the coronavirus represents to both consumers and some types of businesses - particularly those establishments that are not allowed to operate under consecutive executive orders - some shopping centers have announced or already added new tenants.
For example, this month alone Plaza Las Américas in San Juan and Plaza del Caribe in Ponce announced a combined addition of six new stores. Likewise, The Outlet 66 Mall in Canóvanas opened the first Golden Corral - a buffet restaurant chain - in Puerto Rico and the Caribbean last Monday, receiving more than 600 customers during its “soft opening” stage.
Inquired about what would motivate stores and franchises to venture to new markers while 92 percent of the island’s consumers are concerned about their jobs and financial resources, according to a study issued by the P.R. Chamber of Commerce, González affirmed that businesses predict more spending enthusiasm as the crisis vanishes or dwindles.
“We have business owners who are seeing that, and they want to be ready... They know that this will end, and they are seeking to invest because they are looking forward to 2021 and when this ends, we will be in a better position,” he explained.
Hybrid Shopping Models
Although shopping centers assure that they have implemented efficient strategies to curtail the spread of COVID-19, not all shoppers have resumed their pre-pandemic tendencies, even leaning toward online options like Amazon.
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Odalys Arroyo, a mother of two kids ages seven and five, said that although she is comfortable going to shopping malls to make select purchases, the threat of infection prevents her from strolling around the mall like she used to. “I go there and I don’t go to pass the time; rather, if I have to go to a certain store, then I’ll only go to that store. If I see what I am looking for, I’ll buy it, and if not then I’ll leave,” she stated.
After the pandemic was detected in Puerto Rico in mid-March, Arroyo opted for online outlets while shopping centers were closed by executive order. “I bought a lot of things online when this pandemic began, such as home and office items, some things for the kitchen, inexpensive electronic devices, that type of thing,” she explained.
Meanwhile, María Ruiz, a mother of two college-aged daughters, said that save for clothing, she makes all her purchases on digital platforms, adding that she was unaware of the extensive variety of products that can be bought through online sellers. Ruiz indicated that she will eventually visit shopping malls as she regularly used to, but only after COVID-19 no longer poses a threat.
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THE WEEKLY JOURNAL asked González if consumers’ increasing familiarity and proclivity to e-commerce place brick-and-mortar stores on an endangered list, relics of a time before a global health crisis. González underscored “omni-channels” as an increasingly popular sales mechanism. That is, brick-and-mortar stores are offering other channels for customers to make their purchases, in what González described as BOPIS, “Buy Online, Pick-up In Store,” as well as delivery options. “We are accommodating and facilitating this type of operation for all our tenants,” he added.
The industry leader also pointed to the Envision 2020 report published by the Board of Trustees of the International Council of Shopping Centers (ICSC), which found that rather than online retailers canceling brick-and-mortar stores, these two models enhance each other.
“According to the Fung Business Intelligence Centre, 'showrooming' — the practice of researching a product in the store but buying it online — gets plenty of attention, but recent studies suggest it is far less common than ‘webrooming,’ which entails researching a product online and then purchasing it in a store. In fact, 90 percent of all U.S. retail sales still occur ‘within the four walls of a physical store,’ according to a report by management consulting firm A.T. Kearney,” listing Amazon.com and Bonobos as two e-commerce retailers that are rolling out brick-and-mortar stores.
“As we look to the future, a hybrid form of commerce is emerging, one in which shoppers move seamlessly between the physical and digital worlds of retailing as they research products and make purchases,” the report adds.
A tradition in U.S. and Puerto Rico stores and shopping centers is the coveted Black Friday, the day after Thanksgiving, which traditionally attract masses, sometimes resulting in violent physical encounters. But with the pandemic still in full force, local retailers are seeking alternatives that would lure in customers while retaining the composure required to combat the spread of COVID-19.
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“One of the things happening is that the [holiday] season will be somewhat longer. For Black Friday, for instance, some shopping centers have already announced that they will have an extended period. Instead of concentrating [offers] for a single day, it will be extended with offers for several days or several weeks; that’s one of the ways,” he asserted.
On any other year, Arroyo would have woken up at midnight on Black Friday and headed to the Puerto Rico Premium Outlets in Barceloneta for discounted clothing, shoes and accessories, but she is currently undecided. Asked if the aforementioned initiative by some malls would motivate her to participate in the annual sales event, Arroyo responded with a yes.
Likewise, Ruiz would also reconsider. “I usually buy things on Black Friday... I am very indecisive on whether I should go this year or not due to the COVID-19 situation. But if they offered those alternatives, yes, I think I might feel tempted to go,” she said, although she hasn’t been convinced by some shopping malls’ protocols.
Moreover, concerning the typical Christmas activities held in malls throughout November and December that draw in families, González informed that the ACCP members are currently evaluating alternatives to showcase the holiday wonder for children while minimizing contact. As an example, he said that with Santa Claus, they are looking for ways to take the standard Christmas picture, but reducing proximity to the character.
“Obviously, that will impact the atmosphere, but it will be a longer season. Many malls, including ours, have already started with holiday decorations, and we are still in October; we never began this before November,” he said.
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Your correspondent asked if these initiatives and precautions for the upcoming season would attract people who are still wary of visiting these establishments.
“I think that people more or less fell into their habits and their daily habits... I more or less believe that it has been established who goes out, who does not go out and I don’t think there will be a dramatic change. What we have to look for is more ways for businesses to make incremental sales during this time,” González stated.