Retailing giant on a new push

By Andrew Gomes
Advertiser Staff Writer

In the face of rising competition and slack tourist arrivals, the state's retailing goliath is mounting a multi-pronged marketing offensive to try to keep its hold on the more than 40 million shoppers who visit Ala Moana Center each year.

Ala Moana Center publishes its own magazine. About 600,000 copies a year are distributed, primarily in Waikiki.

The moves come as Ala Moana vies with a growing number of competitors for its share of the $17 billion spent on retail purchases in Hawai'i each year, about $2 billion of which comes from visitors, according to state statistics.

Enhancing advertising to bolster sales isn't necessarily unique, as Ala Moana has always had a "substantial" marketing budget. But for center owner General Growth Properties Inc., which bought the mall two years ago, the advertising push is a somewhat different tack for the center that aggressively expanded and renovated tenant space to attract consumers in the '80s and '90s.

"They are a phenomenal center. It would be easy to take the attitude, 'We don't have to advertise,' " said Bob Taylor, president and chief executive of resort retailer Maui Divers Jewelry. "I'm impressed with their approach."

Darren Iverson, regional vice president of sales and marketing for General Growth, and Grant Kimura, who serves in the center's recently created position of tourism director, discussed Ala Moana's strategy during a recent presentation for the International Council of Shopping Centers on Maui.

"If your center is strong and your marketing is in place, your customer is going to come to you," Iverson said.

Among the elements in Ala Moana's marketing plan: new local TV commercials to run more consistently throughout the year; increased in-flight video advertising on domestic and international airlines; and greater participation in national and international trade shows by playing host to deal-making booths.

Increased marketing

The emphasis on marketing comes at a time of little physical growth for Ala Moana, which is 98 percent leased and headed to full occupancy.

The newly remodeled diamond head side of Ala Moana Center is just one new touch at the retailing mall intended to draw shoppers. The center is after a share of the $17 billion spent on retail purchases here each year. Advertiser library photo

Meanwhile, retail growth is springing up in Waikiki where DFS Galleria has expanded and the Honu Group is building a luxury retail complex. A major retail redevelopment also is planned by Outrigger Hotels & Resorts in Waikiki. Future renovations are expected at the Royal Hawaiian Shopping Center and International Market Place.

Taylor of Maui Divers believes Waikiki has already become a stronger competitor to Ala Moana and captured a greater proportion of retail spending by visitors. "They got the advantage — shopping is right there where the hotels are located," he said.

Ala Moana, however, has made inroads to O'ahu's central visitor population with its shuttle buses running every 10 minutes between Waikiki and the mall.

Those buses, in fact, are considered part of the center's marketing effort because of the logo on the side of every bus. "Even if people do not get on the shuttle, the idea of Ala Moana is fresh in their minds," Kimura said.

In addition to Waikiki, another growing threat to Ala Moana is the string of expansion at nearby Victoria Ward Centres, which recently added a 16-screen theater to be followed by more shopping and dining outlets.

Mitch D'Olier, president of Victoria Ward Ltd., realizes that the pressure is being turned up for drawing customer spending and is taking note of Ala Moana's marketing campaign.

"If they're going to do better marketing we have to do better," he said, "because if they get better and we don't get better we're in danger."

Ala Moana is targeting both visitors and kama'aina with its attention. The local TV ads began running in March. They consist of a series of fast-paced episodes sprinkled with humor and separately targeting teen boys, teen girls, the power-shopping woman and families with day-to-day needs like photo processing, grocery shopping and dry cleaning.

Iverson said residents, who make up 60 percent of the customer traffic at Ala Moana, usually visit the center three to four times a month — almost twice the national industry average.

Addressing the other 40 percent, which Iverson said is split evenly between eastbound and westbound tourists, Ala Moana is refreshing and increasing its in-flight commercials.

For westbound flights, the video spots concentrate on convincing travelers that Ala Moana is not just another big regional mall with the same stores found around the country.

"What we need to convey is that there is shopping in Hawai'i that is unique to Hawai'i," Kimura said.

The center touts itself as the largest open-air mall in the world, but Kimura noted that it competes with some of the most scenic beaches, hiking and other attractions offered in the islands.

So Ala Moana is getting away from featuring brands and logos in its westbound ads, and instead tries to portray itself as a "must-see, must-do" experience; not a tourist trap, but a place popular with residents.

For eastbound flights, Japan Airlines produces its own editorial-style commercials featuring the center's luxury brands, spa and other amenities. Kimura said the center has some advertising input, but the benefit is the appearance that "you're not selling to the Japanese, the Japanese are selling to the Japanese."

With one major airline dominating air service to the state from Japan, Ala Moana is also able to take a more intensive approach to marketing, such as rolling out a game in October in which JAL passengers receive in-flight instructions about a scavenger hunt that rewards players for visiting certain mall merchants.

Reaching out

Though not a direct component of marketing, General Growth is restarting "Ala Moana University," a merchant training program that provides monthly customer service training, manager training, a mystery shopper service and merchant retreats.

"It's a commitment of General Growth this year to focus the work of our retailers," Iverson said. "We really believe they're our strongest asset."

In a separate effort to engage the industry more, Ala Moana is playing host to deal-making booths at three trade shows this year.

Two of the shows are for tour wholesalers, one in Japan and one in Florida. The third show is also in Florida but is for shopping center owners. According to Iverson, this is the first time in recent years the center has taken an active role in such events.

Another promotional outlet Ala Moana wields is its monthly magazine, a hefty, high-quality publication essentially plugged full of ads for center tenants and mall information. The center prints more than 600,000 copies a year that are primarily distributed in Waikiki. On occasion, special editions are run off to welcome large conventions such as the American Dental Association, which brought 30,000 people here in 1999.

Despite all of its efforts and a big marketing budget, Iverson said the center still needs to partner with groups like the trade association Retail Merchants of Hawaii, Oahu Visitors Bureau and Hawaii Visitors & Convention Bureau.

"Ala Moana is a great gem," he said, "and hopefully everyone who visits Hawai'i will visit the property. However, we could never address all the markets that we need to on our own."

Carol Pregill, executive director of Retail Merchants, said the industry needs to come together to market Hawai'i retailing better.

"We want to spread the notion that you can shop for just about anything you want in Hawai'i with the breadth of retail we have," she said.

Andrew Gomes can be reached by phone at 525-8065 or by e-mail at agomes@honoluluadvertiser.com.