Feature Stories - November 2000

Shopping Season All Year Long

Nevada Malls Alive and Growing Despite Internet Threat

by Diane Glazman

By the time Santa starts filling stockings this holiday season, Nevada’s retail malls anticipate they will be closing the books on one of their best years ever. Last year’s fears that the Internet would woo shoppers away from malls with promises of stress-free holiday shopping never materialized, and booms in the population and economy point the way toward a banner year for the state’s malls.

"Most retailers in our mall do about a third of their business during November and December," says Cynthia Moore, marketing director for Meadowood Mall in Reno. "We are anticipating the best year ever in our 21-year history," she said, citing sales projections based on the previous five years as the reason for her optimism. Moore says the proliferation of shopping centers in the mall’s vicinity has actually been beneficial. "We have a wonderful collection of retail that has developed close to us just in the last two and a half to three years. I think it helps us because it makes us more of a retail region," she said.

Located in Henderson, the Galleria at Sunset also anticipates a banner year for sales this holiday season. "Henderson is one of the fastest-growing areas in the country. With all the influx of new residents into the area, new housing developments, and the overall retail boom that we’ve experienced around the mall, I think we’re one of the fastest-growing retail areas in the Valley. We’re really anticipating a huge holiday season," says Vicki Duncan, marketing director for the Galleria.

Duncan says the Internet was a hot topic last year as malls prepared for the holidays, but retailers’ fears that it would dramatically cut into holiday shopping never panned out. "There’s a lot of focus on the Internet, but shopping is still an experience. I don’t think you’re ever going to get away from that," she said. "People like the immediate gratification of being able to see, touch, look at what they’re contemplating buying. They also like paying for the item and taking it home with them."

Michele Huntsinger, marketing director at the Meadows Mall in Las Vegas, agrees that the total sensory experience of shopping brings people to malls, especially during the holiday season. "Although the Internet is convenient, people still want to experience the holidays with all their senses," she says. "At the mall, they can look at the beautiful decorations and see the kids’ faces as they visit Santa. They can smell cookies baking and taste a gourmet cup of coffee. They can’t get these experiences online."

Las Vegas is home to the top two malls in the country. Nationally, most malls average revenue of $350 per square foot. At $1,300 per square foot, The Forum Shops at Caesars is the heavyweight champ in the retail arena. Just down the street, the newly opened Grand Canal Shops at The Venetian has quickly risen to second place. According to Maureen Crampton, marketing director for The Forum Shops, foot traffic decreased at The Forum Shops during the time period when the Grand Canal was opening, but sales actually increased. That good news explains, in part, why the newly renovated Aladdin Hotel/Casino includes a retail mall, Desert Passage, and why, despite being located within the same square mile as the two top contenders, Paul Beirns, the mall’s marketing director, has high hopes for the newest entrant in the casino/retail sweepstakes.

Also located in the southern part of the state, the Fashion Outlet of Las Vegas tops the list for outlet malls with average sales of $400 per square foot. Although the national average for outlet malls is $230 per square foot, Jim Schlesinger, CEO of Talisman Corporation, says his goal is to raise its sales to $700 per square foot, easily making the outlet mall number one in the country. Fashion Outlet became a joint venture between Talisman and Trizec Hahn in mid-September. Schlesinger says the outlet mall is one of only three high-end facilities in the country, with 90 stores such as Neiman-Marcus, Escada, Burberry and Kenneth Cole.

Marketing the Malls

One thing that makes Nevada’s malls unique is the tourism industry, and marketing efforts by the malls reflect that difference. According to Barbara Crampton, The Forum Shops’ sales are mostly due to tourists and are less affected by seasonal fluctuations than other malls, depending instead on special events that draw crowds to the hotel. "We are probably the opposite of what a normal shopping center would experience in regards to seasonality for traffic and sales patterns…our sales do not fluctuate in peaks and valleys," she said, adding that monthly sales for the mall generally produce between 7.5 percent and 10 percent of its annual revenue, with a few spurts due to attractions like title fights at the casino.

Crampton says 80 percent of The Forum Shops’ traffic comes from tourists, with local residents making up the remaining 20 percent, so it makes sense that most of her marketing dollars are aimed at tourists. Billboards in the airport and in tourist publications are a few of the tactics she uses to reach a population that changes every 3.2 days.

Jim Schlesinger says the Fashion Outlet experiences a similar 80/20 split despite being located 30 miles from the Strip at the state border. He says that, like the casino malls, the outlet does not experience seasonal fluctuations to any great degree. Over the next year, it will be increasing its marketing efforts with promotional events to bring local residents into the outlet mall. Schlesinger expects it will be making the holidays a more important aspect of its overall efforts to bring revenues up to $700 per square foot.

The newly opened Desert Passage at Aladdin is hoping to attract both tourists and residents, according to Paul Beirns. Acknowledging that the 37 million tourists who visit Las Vegas each year are always going to be the mall’s mainstay, Beirns says he would like to see the mall hit a 70/30 split of tourists to residents.

With that goal in mind, the property was constructed to provide ease of access to residents with entrances located off Las Vegas Boulevard. It has a raised parking garage that can accommodate 6,000 vehicles and gives direct access to the mall. In addition, the mall is one of the Aladdin’s main focal points and can be reached without going through the casino. Beirns says that most of the casino’s attractions are actually accessed by taking visitors through the mall rather than the gambling area.

Nevada’s largest mall, the Boulevard Mall in Las Vegas, is located just minutes from the Las Vegas Strip, and attracts an 18 percent tourist base, with a reported 44 percent of department store charge sales attributed to tourists. Brochures or "rack cards" promoting the mall are distributed monthly to more than 200 key tourist locations, such as hotels and car rental agencies. The mall’s promotions for local shoppers include seasonal events, a Kids Club, Mall Walkers’ Club, and fundraisers for organizations such as the Jerry Lewis MDA Telethon and the Sunrise Hospital Foundation’s Kids Day.

As Northern Nevada’s largest mall, Moore says Meadowood is seen as a regional mall rather than a community mall, drawing customers from as far away as Winnemucca, Nevada, and Bishop and Susanville, Calif., and its marketing efforts reflect that focus. "We are trying to put together packages with the hotels to do shop-and-stay promotions, which can be marketed specifically to these outlying areas," she said.

The Carson Mall, Carson City’s only indoor mall, is planning several events for its busy holiday season, according to marketing director Tweetie Bodenstein. In addition to the usual Christmas festivities, the mall will host an antique show and two arts-and-crafts fairs to attract shoppers. The Carson City Model Railroad Association sponsors a display of model train layouts at the mall each holiday season, which has proved to be a hit with adults as well as children.

The Meadows Mall’s location near the fast-growing northwest area of Las Vegas has helped it in increasing sales this year over last year, according to Huntsinger, who estimates over 90 percent of the mall’s business comes from community residents. To attract locals during November and December, when the mall does 20 percent of its annual business, holiday activities fill the mall’s calendar. The arrival of Santa Claus on the evening of November 17 is highlighted with a pajama party for children, including refreshments and storytelling. On the day after Thanksgiving, the mall hosts "Hug-A-Bear Day" in cooperation with the Assistance League and a local radio station. Shoppers are encouraged to bring in new teddy bears, which the Assistance League distributes to children in crisis.

Future Plans

As can be expected, with the boom in retail and most of their space leased to capacity, many of the state’s malls are looking to expand, adding on additional shops or creating entirely new shopping environments.

Currently just under 1 million square feet, Meadowood has recently asked permission from the city of Reno to expand. Although Moore declined to specify how the mall plans to expand, she did say they are currently developing the process by which the expansion can happen.

The Galleria at Sunset will break ground on an additional 90,000-square-foot home-and-bath center. The new facility will create a brand new entrance for the mall, making it possible to expand the space without inconveniencing shoppers, while adding a new retail focus to the center. Duncan said they are in the process of signing with a number of vendors, but declined to name specific stores who will lease the new space.

Both The Forum Shops and the Fashion Outlet Mall have plans to expand as well. Crampton says Caesars will be expanding the shops beginning in early 2001. The expansion will eliminate the people mover that currently extends to Las Vegas Boulevard, giving the mall an entrance located right on the Strip. Adding 200,000 square feet, the new space will accommodate 25 to 30 additional retail shops or restaurants and include several high-end tenants.

Next year will be a big one for the Fashion Outlet as the new owners begin to make significant changes. Schlesinger says they are looking to bring in another 15 to 20 stores. "We have a number of stores that are in the process of either getting together letters of intent or signing leases," he said, adding the mall is actively looking to lease the remaining 25 percent of its 380,000-square-foot facility. Schlesinger says they also have additional land located to the rear of the mall and have the option to expand their facility in that direction as well.