Journal of Business and Governance, July-December 2008, Volume 10, Number 2, Pages 51-56

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Mall Attractiveness and Shopping Preferences

Danilo Te
Ateneo de Davao University
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Abstract

A factor analysis is applied in order to uncover what variables attract shoppers to a

mall. It is complemented by a cluster analysis of the demographic characteristics of
the respondents. The analyses are matched to derive recommendations as to how
shopping malls should position their retailing strategies.

I. Introduction

Malls have been constantly adapting and changing in both style and substance in
order to attract increasingly sophisticated and fickle consumers (Martin & Turley,
2005). At the same time, mall shoppers look upon the shopping experience as fun
and the shopping mall as a magical place where they can escape from the everyday
world (Poole & O’Cass, 2000). It follows that shopping mall operators must
become increasingly active about how to position themselves in order to ensure
their long-term viability. This study investigates how the positioning can be done
based upon some findings concerning shopping habits and demographic
characteristics.

The study was conducted in the five major malls in Davao City, namely: Gaisano
Mall of Davao, Gaisano South Citimall, NCCC Mall of Davao, SM City Davao, and
Victoria Plaza. The respondents were mall shoppers: 200 respondents equally
apportioned across the malls. Survey questions were asked of randomly selected
shoppers. Forty (40) incoming shoppers per mall were selected of between 15-70
years of age: twenty-four (24) during weekdays (Tuesday, Wednesday, Friday) and
sixteen (16) during weekends (Saturday and Sunday). Interviewers positioned
themselves randomly at selected mall entrances, intercepting the incoming shoppers
for an interview (Malhotra, 1998). Roughly every fifth shopper queuing at the mall
entrance at the specified time was randomly chosen.

The survey questionnaire was administered once the age requirement of between 15
-70 years was known. It was divided into two parts. The first was about
demographic characteristics such as age, sex, civil status, educational attainment,
52 D. Te

monthly income, and occupation. The second part was survey questions on
proximity to the preferred mall, frequency of mall visits, mall rankings, mall
attraction variables, store preferences, and day and time preferences. The
respondents were also asked to rank the malls based on mall attraction variables,
these being mall atmospherics, accessibility, price, service, product mix, promotion,
and entertainment.

II. Respondent Characteristics and Shopping Preferences

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The respondents turned out to represent all socioeconomic classes in the range of A
to E, the dominant ones being representative of classes C and D. Most were in their
late teens and mid twenties (61.5% were of the age bracket 15-25) and the majority
(67.5%) were single. There was a representative proportion of male (49.5%) to
female (47%), consistent with the national population pattern of 50 to 50%. The
respondents were highly educated: 81.5% were either college students or college
graduates. This was expected of Davao City’s high literacy rate of 95.1%, relative
to the national literacy rate of 93.9%. The majority were also employed (65.5%),
likewise consistent with the city’s high employment rate of 88%. Most (55%) lived
within a 5-kilometer radius from the mall.

SM City Davao was ranked as number one in mall atmospherics, service,

promotion, and entertainment. NCCC Mall of Davao was number one in price and
product mix and Gaisano Mall of Davao was number one in accessibility but this
lead was slim. NCCC Mall of Davao was a close rival to SM City Davao on all
categories.

With respect to anchor stores, 86.5% of the respondents often visited the department
store, followed by 85% visiting the grocery store, and 60.5% visiting for the
movies. For specialty stores, 75% of the respondents often visited to eat at a
fastfood counter or a restaurant, followed by 60.5% visiting for a shoe store, 56.5%
for a bookstore, 52% for a cellular phone shop, 46.5% for an apparel store, 31% for
a drugstore, 26.5% for a toys, 24% for a sporting equipment, 23% for hardware,
and finally 21% for either a computer store or record bar. These suggest that
department and grocery stores, normally visited mostly by traditional shoppers, are
changing to attract more young shoppers. The specialty stores frequented the most
were those regarded by the young and the educated to be appealing. Likewise,
because shoppers were found to stay longer, fastfood counter services are bound to
increase in popularity.

Eighty-nine respondents, representing 44.5%, preferred to shop during late Saturday

afternoons, followed by 33.5% during late Sunday afternoons, and 32% during late
Mall Attractiveness and Shopping Preferences 53

Wednesday afternoons. These times suggested an importance placed upon road

traffic conditions and work or study schedules. It is therefore expected that
shopping will be most heavy during the late afternoons of Saturday and Sunday, and
Wednesday.

III. Factor Analysis

Factor analysis was applied to determine the significance of the mall attraction
variables. Also applied was the KMO’s measure of sampling adequacy (MSA) and
the Barlett test of sphericity to determine whether the data were appropriate for
factor analysis. The MSA result showed mall atmospherics and price as meritorious.
Service, product mix, and entertainment variables were middling; and accessibility
and promotion variables were mediocre. Nonetheless, the Bartlett test result
showed that mall atmospherics, accessibility, price, service, product-mix,
promotion, and entertainment variables were all highly significant at a significance
level of 0.05 percent or better. Thus, all of the variables were found to be fit for
factor analysis.

On the basis of high factor loadings, nine (9) factors were derived from a principal
component analysis: 1 - Mall Aesthetics and Comfort; 2 – Mall Density; 3 – Mall
Smell and Sanitation; 4 – Mall Accessibility; 5 – Mall Reasonable Prices; 6 – Mall
Services; 7 – Mall Product Variety; 8 – Mall Promotion; and 9 – Mall
Entertainment.

IV. Cluster Analysis

The results of a cluster analysis that used the hierarchical ward method were three
clusters that were significant:

Cluster 1 : The shoppers in this group were labeled as Traditional Shoppers.

They valued price, store smell, and retail space (density). They comprised 29%
(n=56) of the respondents. They were mostly young with an average age of 28
years. More belonged to Generation Y (55%) rather than to either Generation X
(23%) or to the Baby Boomers Category (21%). (See e.g. Martin and Turley, 2005,
for generational categorizations). Males exceeded females: 52% to 45%. Most were
moderately educated: 36% were in college and 39% were college graduates. There
were more single shoppers (66%) than married ones (32%). As far as income was
concerned, Class C and Class D, with equal shares of 27% each, dominated the
group. There was a significant number of students in the group with allowances
(45%). And as far as occupation/profession was concerned, the students (43%)
54 D. Te

dominated the group, followed by teachers (11%), professionals, business persons,

technical, and government employees with equal shares of 5% each.

Cluster 2: The shoppers in this group were labeled as Destination Shoppers . They
valued product (product mix and service) and convenience (accessibility and
comfort) and comprised 31% (n = 60) of the respondents. They were young, at an
average age of 30 years, placing them just a little older than those of cluster one.
They too were dominated by members of Generation Y (55%), followed by
Generation X (17%) and Baby Boomers (28%). There were more females in this
group (53%) relative to males (42%). The shoppers in this cluster were also
moderately educated: 37% were in college and 37% were college graduates. More
were single (60%) rather than married (38%). As far as income was concerned,
Class D (27%) dominated the group and followed by Class C (22%) and Class E
(17%). The students (32%) in this cluster could have been significant because of
their allowances. As far as occupation was concerned, students (28%) dominated,
followed by business persons (15%), government employees (13%), clerical staff
(7%) and housekeepers (5%).

Cluster 3: The shoppers in this group were labeled as Enthusiastic Shoppers.

They valued mall essentials (aesthetics, comfort, and promotion) and entertainment.
They comprised 40% (n = 76) of the respondents. They were the youngest among
the three clusters with an average age of 25 years. Again, significantly more
belonged to Generation Y (67%) rather than to either Generation X (18%) or to the
Baby Boomers Category (15%). As with cluster one, males dominated females:
55% to 42%. This cluster had more single shoppers (71%) as compared with either
of the other clusters. The shoppers were all highly educated: 43% were in college
and 47% were college graduates. As to income, Class C (25%) dominated the
group and D (20%) followed closely. Class E had a small share of 7%.
Nonetheless, students and job applicants with allowances had a considerable share
of 42%. As to occupation, students (38%) dominated the group, followed by
business persons (12%), housekeepers (9%), clerical staff (7%) and professionals
(5%).

It should be noted that although cluster three shoppers primarily valued aesthetics,
promotion, and entertainment, they also secondarily considered price, product, and
convenience. The same was found true of clusters one and two. Cluster one and
cluster shoppers wanted the secondary considerations, such as product, service,
promotion, and entertainment, to be met before the primary considerations were to
be considered. Thus, mall operators should not necessarily be complacent about
serving those shoppers who have few factors that are valued. In a study conducted
by doctoral business students (Ateneo DBA Students, 2002), product variety and
Mall Attractiveness and Shopping Preferences 55

access superseded price and service in statistical importance. Nonetheless the study
still recommended that service should not be taken for granted, especially if
industry growth was to be considered.

V. Market Positioning

How could the malls of Davao City have positioned themselves so as to capitalize
upon these clusters, in the past and for the future? Based on the perception of mall
shoppers, SM City Davao was well positioned in the following categories: mall
atmospherics, service, promotion, and entertainment. Therefore, focusing on
clusters two and three would have been ideal for it. NCCC was well positioned on
price and product, implying that it should have focused on clusters one and two.
While Gaisano Mall of Davao was well positioned on accessibility, it should have
focused on clusters one and two. As challengers, Gaisano South Citimall and
Victoria Plaza, should decide on their respective positioning so as to prevent them
from being “stuck in the middle” with no clear positioning and no strong viability in
the long run.

The leaders (SM City Davao, NCCC Mall of Davao, and Gaisano Mall of Davao),
should not be complacent about their positioning advantages. The closest challenger
to SM City Davao was NCCC Mall of Davao for atmospherics, service, promotion,
and entertainment. For NCCC Mall of Davao, the closest challengers were Gaisano
Mall of Davao on price and SM City Davao on product. For Gaisano Mall of
Davao, the closest challenger was NCCC Mall of Davao, on accessibility.

VI. Additional Recommendations

Mall operators should improve on their aesthetics and sanitation in order to have a
positive impact on young shoppers. A study on the shopping preferences of
teenagers aged 12 to 17 found that the most important attributes were how friendly
and welcoming a mall was to teenagers and whether it contained stores that were
“cool”. The most preferred malls were those that were attractively designed and
good for “hanging out with friends”. The study cited a need for malls to develop a
comprehensive experiential strategy that met teenage needs (Wilhelm & Mottner,
2005). Similarly, another study recommended more activities designed for each age
segment, teenagers, young adults, adults or the like (Garcia, 2003).

Mall retailers should find ways in their value chain to reduce their costs in order to
lower their prices. They could order directly from producers or resort to backward
integration. In-store promotions should be held during the heavy shopping times of
late Saturday, Sunday and Wednesday. The specific needs of young and single
56 D. Te

shoppers, (those who dominate the malls) should be identified and differentiated
from those of others, such as the married.

Purchasing power should be given importance. Students, comprising 40.5% of all

shoppers are a huge market potential because of their allowances. Class C (23%)
and Class D (23%) shoppers should be the main targets. Class E should be
considered as a market potential for budget products, while Class AB, should be
considered for higher-priced and differentiated products.

Malls should be a venue for innovations and new products. This is because the
majority of mall shoppers are highly educated; 40.5% are college graduates and
39.5% are college students. Proximity should be considered, for instance by
targeting the 55.5% of those who live within the 5-kilometer radius from the mall as
primary shoppers and those within the 6-10 kilometer radius (an additional 28%) as
secondary ones. Finally, international trends in retailing should be watched closely,
particularly with the likelihood of big global retailers like Wal-Mart penetrating the
Asian market to complement their home bases (see e.g. Fackler and Zimmerman,
2003).

References

Ateneo DBA Students (2002) Mall Survey Shows Davao Shoppers are Access and
Price Sensitive, NM Business Watch, March 18-24.
Fackler, M. and Zimmerman, A. (2003) Store Wars: Wal-mart Takes on Japan, Far
Eastern Economic Review, September 25, 2003, 38-40.
Garcia, L. (2003) Malling Habits of Metro Manilans, AGORA Diges, Issue 1.
Malhotra, N. (1998) Marketing Research: An Applied Orientation, Third Edition,
Prentice-Hall, New Jersey.
Martin, C.A. & Turley, L.W. (2005) Malls and Generation Y Consumers: A
Consumption Motivation Perspective.
Poole, M. & O’Cass, A. (2000) An Exploratory Study of the Mall Versus the Online
Shopping Environment.
Wilhelm, W.B. and Motner, S. (2005) Teens and Shopping Mall Preferences: A
Conjoint Analysis Approach to Understanding the Generation Shift Toward
an Experience Economy, Journal of Shopping Center Research, Volume 12,
Number 1.