Diamond manufacturers must use technology to react swiftly to changes in the market

One of the original founders of Sarine, Uzi Levami has a long history of founding high-tech companies. He was awarded the prestigious Israel Defense Award in 1992 by then President Chaim Herzog, for his endeavors on a development project for the Israel...

20 march 2017

A mined diamond can bring an extra depth to the significance of a jewellery piece

Award-winning designer Sarah Ho, was born in Hong Kong and grew up in Macau before moving to London to enrich her skills in design and gemmology. Sarah’s inspirational designs are a sentimental reflection of the different chapters in her life and her...

13 march 2017

‘I will run my chair in a very transparent, open fashion’ – KP Chairperson

Australia’s Robert Owen-Jones took over as this year’s Kimberley Process Chairperson amid tension between the civil society and the United Arab Emirates (UAE), which chaired the diamond watchdog last year. The civil society coalition boycotted UAE’s...

06 march 2017

Giving beauty to people as a gift

The ‘Kierge’ jewellery house is a large firm manufacturing and selling jewellery and is a famous Yakutian brand. Over its 23 years of experience, the company was repeatedly the winner of national and international contests like ‘The Recognition by St...

27 february 2017

IDE's Yoram Dvash: 2017 shaping up to be more positive

After a tough 2015, last year provided the diamond industry with more stability and 2017 could be even better, says Yoram Dvash, President of the Israel Diamond Exchange (IDE) and Vice-President of the World Federation of Diamond Bourses (WFDB). In this...

27 february 2017

US shopping malls: do they have a future?

04 january 2017

Undoubtedly one of the most influential American impacts on consumerism worldwide has been the shopping mall. But the US retail industry is facing serious issues, particularly in the light of growing Internet-based sales.

Is the decline in the mall 'experience' yet another repercussion of the financial crisis of 2008 and the huge recession that followed and which turned many US consumers into necessity-based shoppers? That is the conclusion of many analysts who believe that the desire to spend a day or even just an afternoon impulse shopping at the mall has become a thing of the past for many consumers who, if they do continue going to malls, have cut back their willingness to spend hours wandering around.

As a result, mall owners are scrambling to redesign the shopping center concept. Some malls more closely resemble ghost towns than bustling economic enterprises. But what does this mean for malls and the consumers who frequent them?

Among the type of businesses hit by this change in thinking by consumers, inevitably, is jewelry stores. One Los Angeles-based jeweler said: "We have seen the figures showing that people are visiting malls less and it is a concern. Jewelry fits into that impulse shopping category. If consumers are filling that hole by buying online, then for the retail jewelry industry overall it is not such a problem. However, for jewelry store owners, with the overheads involved, this is becoming an increasing problem."

The surplus of shopping centers is responsible for many of the vacancies shopping centers face nationwide. In an effort to fill those vacancies, malls have turned to nontraditional tenants - stores or other businesses not normally seen in malls. "Malls are struggling to fill vacancies, so they're looking at different ways to fill those spaces," said Erin Hershkowitz, a spokeswoman for the International Council of Shopping Centers. "It could work in the long run, especially if they can bring in tenants that can bring in more traffic."

As a result of changing shopping habits and also a shift in the country's demographics, mall developers and owners are having to become more creative in how they ensure that shoppers continue to visit malls. This has meant, in some cases, bringing in non-retail businesses, such as fitness centers, to take the place of so-called anchor stores which have moved out. Anchor stores are typically a large chain with a wide range of products, including food, which consumers will always need.

High profile closures of anchor stores at malls across the United States in recent years have included Bloomingdale’s leaving the enormous Mall of America, the store’s only location in Minnesota, and Nordstrom leaving the Westfield Vancouver Mall, where it was an anchor store since 1977.

"It all relates. It all goes back to the consumer, the real core of all of this," said Howard Davidowitz, chairman of Manhattan-based Davidowitz & Associates Inc., a national retail consulting and investment banking firm. "The consumer is buying less or is looking to downscale his shopping."

In addition, Internet sales – heading for 10 percent of overall retail sales and particularly popular among Millennials and other younger buyers – are also part of the reason that the death knell is being sounded for malls.

Around 15% of US malls will fail or be changed into non-retail space within the next 10 years, according to a report by Green Street Advisors, a real estate analytics firm. “It’s a unique way of reframing the concept of anchor stores,” said Kim Kitchings, Vice President, Corporate Strategy & Program Metrics, Cotton Incorporated. “What’s interesting about fitness facilities as anchor properties is that they may see repeat customers once or twice a week, which could have enormous potential for the shopping center as a whole.”

Indeed, data indicate that nearly half of consumers (49%) say they exercise or play a sport three days a week or more, according to the Monitor survey. Fifty-eight percent of consumers say they walk on a regular basis, compared to 21% who participate in cardio training, 21% who jog, and 19% who weight-train, according to Monitor data, meaning the gym is likely a regular destination.

That could be a change that sits well with the diamond jewelry business, since that is the type of demographic who is also likely to be a jewelry buyer. "There are many pockets of wealth across the United States – from consumers who have a comfortable lifestyle to those who have become very wealthy," said a senior executive of a major diamond producer who declined to be named. "If you visit some of these places, in Southern California and Florida, for example, you see that there is a close link between the luxury and fitness lifestyle and jewelry."

Michael P. Glimcher, Chairman and CEO of Glimcher, said: “The way consumers enjoy the mall has changed. Today, the mall is a destination, offering more than just retail. While shopping will always be the primary reason people go to the mall, the survey supported our notion that going to the mall is about the experience … people want a mix of retail, restaurants and entertainment.” Results of the Glimcher Retail Monitor show that shopping at the mall remains a social experience, with 81% of Americans saying they shop with someone. Despite the costs involved and time constraints, the survey revealed that people are willing to drive up to 30 minutes to get to the mall and stay between one and five hours on a monthly basis.

And five hours is a significant investment, underlining the fact that non-retail offerings continue to entice consumers, since in many cases experiences like working out or getting a manicure can’t be replicated online. Developing this aspect in a retail conglomerate encourages and enables consumers to get more done in one place – which has always been online shopping’s advantage.

“In-store retail can’t compete with the convenience of online shopping, so brick-and-mortar stores have to bank on experiences that can’t be had online,” says Kitchings. “Interestingly, this may make shopping centers more convenient for harried shoppers in the long run.”

Did the huge recession of 2009, while spelling doom for many of America’s malls, also turn out to be a catalyst for their much-needed reinvention?

Retailers are clearly investing in developing multiple channels in order to attract shoppers. The multi-channel approach means that retailers are ideally indifferent to where a purchase occurs, whether in person, online, or via a mail order catalogue. The key to success in this strategy appears to be a seamless integration across the different channels to ensure a consistently engaging, quality experience for the customer.

Neiman Marcus, the United States luxury store, has shown the way to some extent regarding how to integrate multiple channels. Neiman developed a location-aware iPhone application called NM Service, which enables an opt-in service letting customers program the app with their preferences which are pushed to sales staff as the user enters the store. The sales associate at the store is provided with the user’s social media information as well as the selected preferences of the application. The app also works in reverse, allowing customers to set up appointments with sales staff and identify the manager of a store.

There is hope for mall retailers, however. Millennials are increasing their activity in the market, because as much as online and mobile channels are ingrained in their brain, shopping is still a social behavior for this group. Seeing and touching, as well as researching and deciding where to purchase a product, are all important aspects of their shopping experience. This omni-channel and omnipresent age group seeks instant gratification.

Furthermore, it should be remembered that the demise of shopping centers has been regularly predicted since they were first constructed in 1956. Shopping center landlords were able to focus on providing the right leasing mix, right design and targeting the right customers, consequently adapting to the changes facing the industry and the best shopping center operators have been able to do this on a consistent basis.

The strongest asset managers and shopping centers have remixed their portfolios, shifting away from industries which face the strongest headwinds, and improving their engagement and lifestyle offerings. It appears that the key to their continued success will stem from offering real points of difference over the Internet shopping experience, embracing the online evolution, introducing Internet parcel pick-up points and creating a retail marketing mix.

Is the end is sight for the shopping mall? Clearly, the answer is difficult to find since operators are bring in food courts, cinemas, ice-skating rinks and many other features to give shoppers a reason to visit – and as long as they are in the building there is a chance they will be tempted to buy goods they were not necessarily looking for. The diamond industry has to hope that the store that attracts them is one selling jewelry.

By our Israel correspondent Abraham Dayan


Only registered users can add comments (Register, Login)