Thursday, August 30, 2012 | Edited by Daniel Moores
||Shopping Malls Grow Appetite for Restaurants
The nation's shopping malls are undergoing a big shift -- one that will soon be hard to miss. They're adding a full course of sit-down restaurants where you have typically found retailers in the past.
Regional malls have been at the mercy of a struggling economy and the growing popularity of online shopping. They're also dealing with declining foot traffic. The numbers of shoppers in stores fell about one percent in 2011, according to data research firm ShopperTrak. While ShopperTrak hasn't issued official figures for this year, the group says so far mall traffic is still declining.
So, the malls are launching a reinvention effort. They're coming up with new recipes to fight sluggish consumer spending, the rise of ecommerce, and slower retail store growth.
"We will not hesitate to replace a poor performing traditional retailer with an outstanding restaurant, if we think it is in the best interest of our consumers," says Alan Barocas, head of leasing at General Growth Properties. His company operates regional malls such as the Glendale Galleria in Glendale, Calif., and the Perimeter Mall in Atlanta.
More and more sit down restaurants are finding other homes in and around the malls -- far from the food courts. They're opening next to anchor stores and popping up in parking lots. It's by no means the end of the food court. Rather, it's a move to give consumers another reason to head to the neighborhood mall and spend more time and money there.
Barocas refers to the restaurant openings as a national phenomenon.
"Restaurants are a very important part of our leasing strategy," says Barocas. "When you think about ecommerce and the impact it is having on brick and mortar, you can't go online and have lunch."
Even high-end malls see the advantage of offering more dining options. Taubman Centers, which operates the Short Hills Mall in Short Hills, N.J., is also adding new restaurants at its malls.
"There is no question that we are adding more restaurants today than five years ago," says Bill Taubman, chief operating officer at Taubman, in a written response to CNBC.com. Restaurant openings over the past year include The Cheesecake Factory and Texas de Brazil at City Creek Center in Utah and Plan B Burger at Stamford Town Center in Connecticut.
Simon Property Group, the largest public real estate company in the nation, is also opening up more casual restaurants than five years ago. It is working on multiple deals.
"We believe these restaurants bring a great deal of value to our properties and serve as a critical component of the tenant mix," says Les Morris, a spokesman for Simon Property, in a statement to CNBC.com. "There are a number of advantages to having a strong restaurant line-up at our malls: they help to brand our properties, they bring traffic to the malls and they keep shoppers at the malls longer than if there were not restaurant options."
You don't have to look very far to find interest from the big eateries.
Darden Restaurants, which owns casual and casual-plus chains such as the Olive Garden and The Capital Grille, is scoping out new locations. The company is in the process of opening up more restaurants now than it did last year, and it recently acquired another chain, the Yard House.
"We have been tearing down hotels and things like Circuit City. We have a few sites where we have built on mall property," says Darden Restaurants spokesman Rich Jeffers. "We are finding space in existing malls."
At the malls, he says Darden will do tear-downs and rebuild the space at its own expense.
Opening up restaurants, says Stifel Nicolaus Vice President and REITS Analyst Nathan Isbee, gives people another reason to not shop online and get out of the house. It's what he calls part of the gentrification of mall property.
"The landlords want to get people to think of the regional malls as more than just a place to buy apparel. They want to give people more of a reason to want to stay longer and spend more money," says Isbee.
It could be a winning strategy as classic mall retailers such as Gap and Abercrombie close stores and create more space.
Bringing in a restaurant will not save a dying mall, but Isbee says it will certainly generate business.
General Growth has been taking the concept of the "shopping experience" a step further. It's also been adding supermarkets and movie theaters to its malls over the past few years.
That's a good strategy to fill the holes left by retail chain stores, says America's Research Group Chairman Britt Beemer.
"I don't know of any apparel retailer that is expanding," says Beemer.
But, a new hurdle may be emerging for the malls -- one that may cause hunger pains. A recent report finds Americans are eating out at a slower rate. The NPD Group, a market research firm, trimmed its restaurant traffic forecast to flat for the next two years versus the one percent gains originally forecasted over the next two years.
Within this forecast there is an encouraging sign, the average amount diners are spending rose 2 percent in the spring.
"Consumers may not be flocking to restaurants in droves, but they are going out, that's good news," says Bonnie Riggs, NPD restaurant industry analyst. "We're also seeing that when they do dine out, they are trying new offerings, spending a little more and not relying totally on deals."
(Source: CNBC.com, 08/16/12)
||Microsoft, Nokia Stand to Benefit from the Apple/Samsung Ruling
Nokia and Microsoft Corp., both looking to increase U.S. sales of smartphones, stand to get a much-needed boost as Samsung Electronics Co. products face a possible ban and handset makers come under pressure to consider alternatives to Google Inc.'s Android software.
A federal jury awarded Apple Inc. more than $1 billion on Aug. 24, saying Samsung infringed on six of seven patents for mobile devices. U.S. District Judge Lucy Koh will weigh Apple's request for a ban on U.S. sales of some devices from Samsung, the dominant maker of Android phones, next month. Some Android equipment makers may turn to platforms such as Microsoft's Windows 8 to avoid a similar trip to court, said Carolina Milanesi of the research firm Gartner Inc.
"I am sure that vendors in the Android ecosystem are wondering how long it will be before they become Apple's target," Milanesi said in an interview. "This might sway some vendors to look at Windows Phone 8 as an alternative, and for the ones like HTC Corp. and even Samsung, who have already announced plans to bring to market a WP8 device, how much stronger their investment should be."
The ruling will allow Apple to defend its intellectual property more vigorously, Bloomberg Industries analyst John Butler said in a report.
Microsoft stands to gain the most after the decision, said Horace Dediu, a former analyst for Nokia who now runs mobile-phone industry research firm Asymco.com in Helsinki, Finland. The Redmond, Washington-based company has already prevailed in patent disputes with Android user Motorola Mobility, which is owned by Google. Microsoft has won orders that banned U.S. imports of some Motorola devices and limits on sales of some of the company's products in Germany.
"Microsoft can go in to all these accounts and say, 'Let us remind you again of the cost of Android,'" Dediu said. "What Microsoft has always had trouble with is getting these vendors to switch."
Samsung sells dozens of Android phone models, according to its website, compared with three for Microsoft.
Microsoft could also boast it offers legal protection that Google, by giving away Android for free to vendors, hasn't provided, Dediu noted.
"With Windows phones, you're protected against IP lawsuits because, if anybody sues, they are going to talk with Microsoft," he said. "Microsoft can do that because they actually do have their IP pretty well sorted out."
Nokia decided to become partners with Microsoft last year after jettisoning its aging Symbian platform that had failed to keep up with Apple's iPhone and Android devices. Nokia's global mobile-phone market share slumped to 20 percent last quarter from 23 percent a year earlier, according to Gartner. Android’s share among platforms rose 21 percentage points to 64 percent, while Cupertino, California-based Apple's iOS had 19 percent.
"Right now, for Nokia, it is a case of 'the more the merrier,' as the strength of the ecosystem is what they need to get traction with consumers and carriers alike," said Milanesi, of Stamford, Connecticut-based Gartner.
More important than the Aug. 24 U.S. court ruling is the injunction Judge Koh is considering issuing next month, said Mark Lemley, a professor at Stanford Law School in Stanford, California.
"The real question is whether this is enough to derail the momentum the Android ecosystem has gained in the marketplace," Lemley said in an e-mail.
Many of the infringement claims don't have anything to do with the Android software, Google said in an e-mail.
In a court filing on Monday, Apple sought a ban on eight models of Samsung's smartphones, including several of its Galaxy S devices.
"Most of these don't relate to the core Android operating system, and several are being re-examined by the U.S. Patent Office," Google said in its statement.
The injunction may give other handset makers a welcome boost, said Michael Schroeder, a Helsinki-based analyst at FIM Bank.
"A potential sales ban on Samsung products will create some additional room for Nokia as it is preparing to ship the new lineup of Lumia devices over the next couple of months," Schroeder said.
Nokia continues to focus on expanding the entire Windows Phone system, said Susan Sheehan, a spokeswoman. She declined to comment on the Samsung ruling.
Last quarter Nokia sold 600,000 handsets in North America, little changed from the previous period even after introducing the flagship Lumia 900 in April at AT&T Inc. Apple sold 5.9 million iPhones, which then-CEO Steve Jobs introduced in 2007, in the U.S. in the quarter, according to Strategy Analytics. Microsoft's mobile platform gained speed, winning 2.7 percent of global sales compared with 1.6 percent a year earlier, Gartner said.
Nokia is set to show its new Lumia smartphones running Microsoft's Windows Phone 8 software on Sept. 5. Stephen Elop, the former Microsoft executive who was brought aboard in 2010 to revive Nokia, is now betting that a wave of advertising spending by Microsoft to push the new Windows 8 operating system will help accelerate demand for Lumia.
While RIM is fighting a similar battle to regain lost market share with a new platform, it is months behind Nokia. RIM's take of global smartphone platforms fell to 5.2 percent last quarter from 12 percent a year earlier. The first two new models of BlackBerry 10 devices -- a touchscreen and a traditional Qwerty keyboard version -- won't be out until early next year, well after the iPhone 5, expected out next month.
RIM's sales fell 43 percent last quarter as its aging lineup of devices failed to excite buyers. Chief Executive Officer Thorsten Heins said earlier this month that the new BlackBerry 10 platform will soon be ready to license to other manufacturers, even as his company races to release its own handsets with the software early next year.
Asymco's Dediu said RIM doesn't stand to benefit in the same way because it won't have a new competitive product until next year. RIM's stock has fallen 76 percent in the past 12 months and is 95 percent off its 2008 high.
"RIM is not competitive," Dediu said. "RIM's story will be more next year if they are able to recover."
The lasting damage may ultimately be to Samsung, not Google, because the judge ruled the infringements had less to do with the Android operating system and were more related to imitating the iPhone's design, said Edward Snyder, an analyst at Charter Equity Research in San Francisco.
"Apparently, they lifted too much of the look and feel from iPhone, but I don't believe it has much to do with the Android OS, and even if it did, I doubt Google would have much trouble designing around it," Snyder said. "We're unlikely to see a big push to Windows because of this."
(Source: Bloomberg, 08/27/12)
||The New High-Tech Dating Technology? Meet in a Bar
Online dating services have long promised to help people find a mate by using statistical science to predict personal chemistry. But some of the biggest services are now adding a retro twist.
Several sites are bringing people together the old-fashioned way, with singles parties where people can crowd together at bars while consuming alcohol and flirting.
"There have been so many times I've met up with someone from the Internet in person and didn't feel a spark," said Emily Clapp, who was at a recent beer-tasting event organized by the popular dating site OkCupid in a basement bar on the Lower East Side of Manhattan. "It's so disappointing to invest all that time e-mailing and then...nothing."
Like many others, Ms. Clapp says the offline events can help identify a potential date more quickly. Online, they find they can spend weeks or months exchanging messages with someone and then schedule dinner or drinks -- only to realize within minutes that the date is a dud.
"There's only so much you can do with data," said Susan Etlinger, a research analyst at the Altimeter Group who advises companies on how best to use technology. "There's always the unknown that has to do with pheromones and human nature."
But why do you need to sign up for a dating site to meet someone in a bar? Ms. Clapp, a 31-year-old tax accountant, said that the sites acted as a filter, making it more likely that the other attendees were also single, looking for romance and not too creepy. But inevitably, she said, "it's a little more random than regular online dating."
The offline events, for members only, are offered as part of their monthly subscription or for a small fee. While many of the events are held in bars, others revolve around activities like learning to make fresh pasta, going on hikes or playing Skee-Ball. Both Match.com, a pay service, and OkCupid, which was bought by Match last year but operates independently, are getting behind the offline idea. Match bought commercial time during the Olympics to promote "The Stir," as it calls its gatherings. In one ad, which is said to depict scenes from actual Match events, a bubbly blonde asks a new friend, "U.C.L.A.?" and then clinks glasses: "All right, Bruins!"
Match, which has nearly two million paying users, says it has held a few hundred events each month since May in more than 50 cities. OkCupid, which says it has 2.9 million active members, has organized about 100 events in New York since early July and plans to bring the idea to San Francisco, Los Angeles, Chicago and a few other cities in October. It also says it is revamping its business to put events at the forefront.
Smaller services are also offering gatherings. MeetMoi, whose app lets users broadcast their location and arrange a quick coffee or drink, has been hosting get-togethers to bring more of its users to the same space at the same time. And Nerve, a sex and dating site based in New York, says it is working on a mobile application that will emphasize nearby events.
The move toward real-world meetings follows some well-publicized studies that cast doubt on whether personality tests and data can accurately predict whether two people will be compatible. In one such study released in February, psychology researchers said there was "no compelling evidence" that matchmaking software worked better than more primitive methods.
The major online services say they are not reacting to those studies. But they are facing competition from services that are skipping the algorithms altogether, including How About We, which lets people look for dates based on first-date ideas, and Grouper, which sends six people on a blind group outing.
"We still use our matching algorithms," said Mandy Ginsberg, president of Match.com. "But maybe it is slightly easier to walk into a room full of people meeting and talking."
Online dating, it seems, may also have hit a plateau. Recent data from comScore, an analytics firm, shows that traffic across the 10 most popular dating sites did not increase over the past year. This may be partly because of the rising popularity of mobile dating apps. Even so, dating services typically have trouble holding onto users. Successful members who find love often delete their accounts. Those who don't can get weary after one too many bad dates, so the services have to dazzle them and keep them around longer. That is where the social events come in.
Some dating sites and apps have been ahead of the curve when it comes to face-to-face gatherings. Grindr, a mobile app geared toward gay men, first spread the word about its service in 2009 by teaming up with local bars to throw parties. It now has four million members. And sites like Meetup have long encouraged people to corral like-minded individuals for get-togethers.
But not every company is sold on the idea of throwing people together in a bar and seeing what happens. EHarmony, one of the more established dating services, says it has no interest in moving away from its emphasis on a scientific approach.
"We are focused on getting our members to meaningful offline meetings with people who are deeply compatible, not creating large-scale happy hours," said Becky Teraoka, a company representative.
(Source: The New York Times, 08/21/12)
Daily Sales Tip: When Talking to Prospects on the Phone...
...Always use their first name. I know that there are two schools of thought on this, one being that you should show respect for someone you don't know and so use either Mr. or Mrs., but I don't agree.
I think you can show respect for someone by being courteous and professional, and I think you're going to make a lot more progress if you use a person's first name. Here are the two reasons to do so:
* First, by using a person's first name you aren't immediately signaling that you're a salesperson! I mean, how do you feel when someone you don't know calls you and addresses you by "Mr." or "Mrs."? Also, when you use a person's first name, you are starting the call equal, without giving them all the power.
* Second, everyone likes the sound of their own name. In fact, psychologists have found that everyone's favorite word is their first name! By starting with that you are immediately making a connection, and a personal one at that.
Source: Sales consultant Mike Brooks