Up until the beginning of 2020, shopping malls were consumers’ favorite destinations in metropolitan areas. They were recognized as multipurpose spaces that offered a wide range of services, providing the possibility not only of shopping, but also of meeting up with friends and family, spending leisure time and enjoying a variety of entertainment activities in dedicate space for movie theaters, restaurants, arcades and other recreational activities. In addition, they allowed customers to complete procedures, such as paying for services, all in one place, consolidating their role as a comprehensive and convenient option for multiple needs. Post-pandemic, many people may no longer feel comfortable in crowded and enclosed spaces, such as shopping malls, and this challenge is compounded by competition from e-commerce, as well as a weak economic climate.
Given the uncertainties surrounding the post-pandemic landscape, our research endeavors to discern the evolving dynamics of customer expectations and purchase intentions in shopping malls. We aim to investigate the variances in customer experience pre and post the Covid-19 pandemic, recognizing the potential shifts in consumer behavior and preferences. There have undoubtedly been shifts in the perceptions of consumers who visit shopping malls. We shared our findings in the paper “From traditional to transformed: Examining the pre- and post-COVID consumers’ shopping mall experiences” (Journal of Retailing and Consumer Services), co-written with my colleagues Gary Mortimer (QUT Business School, Australia) and Syed Muhammad Fazal-e-Hasan (Peter Faber Business School, Australia). The objective of this study was to compare, for the first time, the value perceived by consumers in their consumption experiences, before (October 2019) and after Covid-19 (October 2021). This value encapsulates their purchase intent and preferences, serving as a pivotal factor in delineating the future of these massive retail spaces. It plays a crucial role in assisting them in formulating strategies to establish sustainable competitive advantages for the future.
What do consumers value the most about shopping malls?
Shopping mall customers perceive two types of general experiences: functional and social. The functional experience refers to the effectiveness and efficiency with which the mall meets their needs, while the social experience is related to the opportunity the mall offers for them to interact, socialize or be entertained.
The functional experience is related to:
- Utilitarian value: This value is based on a rational consumption behavior. It can be increased by adding more retailers and service providers, anchor stores, parking and other facilities. Utilitarian value has become more relevant in the post-Covid-19 experience. Customers possibly value the practicality and functionality of the shopping mall rather than having to wait for online purchases to be delivered.
- Time convenience value: Time convenience value is defined as the efficiency in the shopping process. Having many stores under one roof makes it possible to reduce the time spent shopping. Surprisingly, this value has not changed pre- and post-pandemic. This may be due to some of the strategies implemented during the pandemic, such as click-and-collect or QR codes on restaurant menus.
- Transaction value: Transaction value refers to satisfaction with the product acquisition process, including aspects such as attractive prices, promotions or multiple payment options. This value increased after the pandemic, since shopping malls had adapted to more convenient experiences, such as contactless or biometric payment methods.
The social experience is related to:
- Hedonic value: Hedonic value is defined as the fun and playful facet of shopping at a mall, and includes entertainment and atmospheric elements that reinforce the emotional connection with customers. While the influence of this value on consumer experiences in shopping malls is still positive, it has weakened post-pandemic. Customers have likely found other ways to satisfy hedonic experiences outside the shopping mall. It may be that the security measures implemented during the pandemic, such as prohibiting the organization of events, fashion shows, gatherings with artists, etc., have altered the experience of going to the mall, making it a less enjoyable activity.
- Social interaction value: This value focuses on interactions between customers, since shopping malls have become social spaces for the community. The influence of this value decreased even more than the hedonic value post-pandemic. After reopening, shopping malls had not yet recovered pre-pandemic attendance levels and, at times, appeared to be half-empty, thus diminishing the feeling of social interaction.
Finally, the study concluded that the functional experience has a greater impact on customers’ intention to revisit the mall compared to the social experience. The primacy of the functional aspect over the social aspect after Covid-19 has implications for shopping malls and their adaptation to the new reality in order to remain relevant. Consequently, the following recommendations can be made:
- Shopping malls should take advantage of the strength of the utilitarian and transactional aspects by implementing technology, as they did on emerging from the pandemic. For example, they could use augmented reality, livestreaming, and other forms of on-site digital shopping.
- The functional aspect of the shopping experience must continue to be fostered, by having not only multiple stores, formats and brands, but also banking services, car washes, beauty salons, travel agencies, etc. This will help customers rationalize their visit to the mall by enhancing its perceived value. The provision of virtual directories and strategic signage, through mobile applications, for example, can help consumers make their experience more efficient.
- Although the influence of the hedonic and social aspects has diminished, the provision of unique and engaging shopping experiences based on the principles of the social experience is recommended. Offering a selection of restaurants and entertainment choices is not sufficient. To entice and captivate consumers, the offerings must be enhanced by organizing events and activities such as fashion shows, concerts, art exhibitions or cultural festivals.
The author is research professor o the Department of Marketing and Business Intelligence at EGADE Business School.