Santa Is Keeping His Distance This Year, But Will Shoppers? Malls Prepare For Their First Covid-19 Christmas

U.S. malls are gearing up for what normally is their biggest season of the year, in the midst of the biggest challenge they’ve ever faced.

The mall Santas are ready for social distancing. Some will sit behind a protective window in a cottage or carriage. Others will be surrounded by a plexiglass snow dome. And the malls are ready with masks with faux Santa beards.

Outside, parking lots have become prime real estate, with curbside pickup concierges and drive-by entertainment.

Stores have adopted shopping reservations and appointment times to manage crowds, and they began offering Black Friday-level discounts in October to spread out the season.

Now, the billion dollar question is will there be any crowds, or will most shoppers decide to keep their distance, and skip their traditional mall trips entirely this year?

There are some troubling statistics out there. Shopper tracking firm Sensormatic is forecasting that traffic during what typically are the sixth busiest weeks of the year – between Thanksgiving and New Year’s – could be down 22% to 25% this year compared to Christmas 2019.

The International Council of Shopping Centers (ICSC) holiday intentions survey found that while a majority of shoppers, 81%, said they plan to shop in physical stores, only 45 percent said they were likely to visit a mall or shopping center this holiday season, down from 64% who said they shopped at malls last year when surveyed after the holidays.

There also are reasons to be optimistic, however.

The ICSC survey found that 73 percent of Americans plan to spend as much or more on holiday gifts as they did last year.

Placer.ai, which uses location analytics from mobile phones to measure retail foot traffic, found that since American Dream, the mega-mall in the New Jersey Meadowlands, reopened in October, it has been performing better in terms of traffic compared to most weeks after the mall originally opened in late October 2019, and pre-pandemic.

American Dream drew 65,000 visitors the first week it was open, and traffic rose 32% the week of Oct. 5, and 14% the week of October 12. Two Saturdays, October 3 and October 10, had more traffic than any days in 2019 except December 29, Placer.ai reported.

An even more significant finding in the Placer.ai report is that Westfield Garden State Plaza, a more traditional super-regional mall about 10 miles north of American Dream, had twice as much traffic as American Dream on those two peak Saturdays in October.

Obviously, shoppers are going to malls, even if surveys say they plan to avoid them.

Malls are preparing for the best-case scenario, that consumers will crave the normalcy of a holiday trip to the mall, while bracing for the worst, which would be another round of mandatory mall shutdowns triggered by a surge in new Covid-19 cases.

“People will still go to malls, but they may only go once during the season, as they look to consolidate trips and reduce risk, particularly in areas of the country where Covid-19 cases continue to spike,” said Jennifer Bartashus, senior equity research analyst, consumer staples and retail, for Bloomberg Intelligence.

The challenges facing malls, Bartashus said, “may be compounded by the fact that other draws to malls during the holidays, such as visiting Santa or going to a restaurant or entertainment venue, are less powerful this year due to social distancing and capacity constraints.”

The desire to consolidate shopping trips may mean that one-stop retailers like Walmart
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and Target
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“could very well steal a share of trips that were to malls last year,” she said.

Tom McGee, president and CEO of ICSC says he is seeing an impressive blend of optimism and resilience from the council’s shopping center membership.

“You look at the last six to seven months and the level of stress that’s been put on the retail space, and yet these properties are fighting through it and finding ways to serve their customers and provide solutions,” McGee said.

The ICSC is predicting holiday spending will increase by 1.9% this year. Consumers are spending less on travel, entertainment, dining out due to the pandemic, and McGee and many retailers are betting they will use that money for holiday gifts.

“Given everything that’s going on, I think families are going to lean in to the holiday,” McGee said.

“Clearly this year is going to be different,” McGee said. “Consumers have grown to expect that when they go to a shopping center or a store there’s going to be obvious signs of safety. They want to see the plexiglass, they want to see hand sanitizers,” he said. “The more obvious and more conscientious you are in putting your customers safety front and center, the more likely it is that you will have a greater number of visitors.”

Unibail-Rodamco-Westfield, (URW) the global mall developer that owns 30 Westfield malls in this country, also is betting that families will want to maintain holiday traditions more than ever this year, including traditions like trips to the mall.

“Our research has shown that people are looking for some sense of normalcy,” during the holiday season, said Ghadi Hobeika, executive vice president, media sales, marketing and digital for Unibail-Rodamco-Westfield U.S.

The URW malls are doubling down on safety, but are trying to create “a holiday experience in 2020 that’s as close to 2019” while being mindful of Covid-19 protocols, Hobeika said.

Shoppers can use the Line Pass appointment system on the Westfield app to avoid lines outside stores, and to get a text alert when it is safe for them to enter a store.

URW is hosting an augmented reality scavenger hunt at 22 of its centers, which will ask shoppers to scan a QR code on their phone that leads them to virtual characters like Santa or a snowman, and unlocks discounts and services.

At Westfield Century City in Los Angeles, a popular open air Holiday Market will return, with social distancing changes like an elevated stage to keep performers separated from shoppers, and a socially distant photo setup for Santa.

Westfield also is hosting a Kids Market at five centers in November that will let children ages 5-12 do kid-only shopping for gifts, with pre-paid spending cards, to be able to surprise their parents with their selections.

“We’re trying to focus our efforts for the fourth quarter on bringing a little bit of joy and tradition back to the malls and offering communities a safe experience but also a fun experience,” Hobeika said.

Malls and retailers are trying to stretch out the holiday season as much as possible this year, with holiday deals starting in October, and staggered deal days, rather than trying to make Black Friday weekend a monster event.

Bergen Town Center, a Paramus, N.J. mall owned by Urban Edge Properties, is running a Black Friday, Every Friday promotion throughout November.

The campaign “is meant to encourage customers to think about Black Friday shopping and promotions before November 27,” said Bassam Mhich, vice president for asset management for Urban Edge Properties. The mall will be giving away $100 gift cards to five shoppers on those Fridays, and promoting other deals.

The Bergen Town Center Santa will be stationed behind a plexiglass snow globe, with a bench in front where shoppers can take photos.

Some U.S. malls also will be offering a humorous nod to the virus that threatens to steal Christmas by bringing in competition for the Santa photo ops – the Grinch Grotto. Select Westfield, Brookfield and Macerich
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malls will have a Grinch experience where your photo with the big green guy can include your choice of captions, such as “You’re a Mean One, 2020,” or “How the Grinch Stole, Well, the Whole Year.”

Traffic at the Santa stations compared to the Grinch Grotto could prove to be a good early indicator as to whether shoppers are feeling more “Ho, Ho, Ho,” or “Oh No” about this year.