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Experience in Shopping Centers

Thesis Defense

ozge oner

on 8 June 2010

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Transcript of Experience in Shopping Centers

Experience in Shopping Centers
An Empirical Analysis on Swedish Shopping Centers Author: Özge ÖNER
Tutor: Charlotta Mellander
Jönköping International Business School Today's Agenda Introduction
Purpose of Study
Historical Background
Theories and Concepts
Empirical Study
INTRODUCTION “The truth, I don't go to the malls to shop. Sure I might buy something, but it's not opportunity or need that brings me to a mall -it's the glitter and glitz, the chance to mingle...A good mall is like a good man: it offers excitement and enlightenment.”
Gershman (1988)
Transformation of consumption: "need for consuming"
Shift to the Experience Economies
Importance of Location: “how” and “where” people consume?
Experience in Shopping Center
PURPOSE The purpose of this study is to examine how the market size impacts the level of success, diversity, entertainment, arts, and experience of shopping centers in Sweden. Historical Background on Shopping Centers “A group of architecturally unified commercial establishments built on a site which is planned, developed, owned, and managed as an operating unit related in its location, size, and type of shops to the trade area that the unit serves” (Urban Land Institute, 1977, p. 1) The early footprints: 15th century bazaars & 18th-19th century shopping terraces
Today's Shopping Centers have experienced a boom after the Second World War
Shift in the architecture and organizational structure of Shopping Centers Shopping Centers in Sweden 1960's: emergence of different types of shopping centers
New housing districts in Sweden during 1950's
Government encouragement to the private enterprises: planning process

a) Local Centers, serving 4000-7000 people;
b) Neighborhood Centers, serving 15 000 people;
c) District Centers, serving 120000 people;
d) Regional Centers, serving 500 000 people Emergence of Shopping Centers as
Entertainment Play-grounds Conspicuous Consumption: Theory of Leisure Class by Veblen (1899)
Lifestyles took over the social hierarchy in terms of shaping consumption patterns (Featherstone, 1991 ; McIntrye, 1992)
Symbolic Values and Hedonic Consumption
“People buy products for not only what they do, but also for what they mean” (Levy, 1963, p. 118) Transformation of Consumption Hedonic Consumption & Shopping Centers: “’Retail mall’ could replace ‘product’ and hedonic consumption can be directly linked with the mall shopping experience in and of itself.” says Langrehr in his study where he relates hedonic consumption to the function of shopping malls (Langrehr, 1991, p. 428)
Enclosed Architecture Specific Experience Elements: music, colors, temperature, smell and even taste Shopping Centers as Consumer Habitats Playing the fantasies Theories and Concepts The Experience Economy Income and Leisure Time Location Role of Human Capital Agglomeration Economies Agrarian Economy-Industrial Economy-Service Economy-Experience Economy
The shift towards information-based, knowledge driven economies: creative economies (Florida, 2002)
The value of Experience
Demand: Budget & Time Constraints
Demand and supply of recreational products, such as entertainment, arts, and other cultural goods, depend on the development of the total real disposable income of households, and on other macroeconomic conditions (Andersson & Andersson 2006)
It is expected that the relative shares of recreation expenditures would exceed 15 per cent of the consumption by the year 2030 (Andersson & Andersson, 2006, p. 42).
Sweden with a 12.5 per cent share of recreational expenditures, is ranked third after Norway and the UK in 2002. “Leisure has recently been conceptualized either as a form of activity engaged in by people in their free time or, preferably, as time free from of any sense of obligation or compulsion. As such the term ‘leisure’ is now broadly used to characterize time not spent at work (where there is an obligation to perform.)” (Vogel, 2001, p. 4) Leisure time constraints: decision on allocation of time for leisure purposes
An increase in leisure time consumption over the years.
The working hours in Sweden went down from 2,945 to 1,461.
The dramatic change in working hours leads to the increase in leisure time consumption in return. “Why do certain industries locate where they do?”
The New Economic Geography
World is flat?
Distances are not important any more?
Certain industries keep clustering.
“Clusters tend to be attractive to the entrepreneurs who are capable of exploiting cluster advantages. This attractiveness of clusters at the regional level derives from the effects of pecuniary and non-pecuniary external economies that benefit firms that belong to such clusters.” (Andersson & Andersson, 2006, p. 66) Consumer Cities: clustering has an important effect on the urban density, which leads to an area’s attractiveness Urban Locations are important for both production and consumption Clustering Power: Importance of Urban Locations
Importance of Human Capital for growth of the cities and production
Importance of Human Capital for diversity
Creative Class: creative people tend to cluster
Smart Cities: direct measures of quality of life are associated with “consumer city” amenities such as bars and restaurants (Shapiro, 2005)
“service diversity is significantly related to the distribution of conventional human capital, the creative class, creative professionals, and several permutations of super creative core” Mellander and Florida (2006) Economies of Scale & Scope
Economies of Scope: The concept suggests that in order to reduce the average costs, additional products might be offered via the same product line. (Diversity within the Shopping Centers)
Economies of Scale: The main determinants of scale are pointed out to be the total numbers of units produced and the final market size. (Suficient Market Size for Sufficient demand)
Economies of Scale Internal Scale Economies & External Scale Economies
External Scale Economies = Agglomeration Economies
Agglomeration Economies: “the economic benefits of co-locating individuals or firms.” (Andersson & Andersson, 2006, p. 179)
Localization and Urbanization Economies Localization of economies relates to the clusters occurring in local areas as specialized industrial districts Urbanization of economies is a concept regarding ‘diversity’ as a key element of location decision; it is counted to be the driving force behind innovation and economic development (Jacobs, 1969) Hypotheses 1.The success of the shopping centers in Sweden is expected to be positively affected by the market size, where total turnover of the shopping centers are taken into account as an indicator of success. The impact of municipality market size is expected to be higher than the impact of local labor market size and the size of the market outside of the local labor market.
2.The diversity within shopping centers in Sweden is expected to be positively af-fected by the market size of the municipality where they locate as diversity is found to be highly associated with the size of a location in previous studies.
3.The existence of shopping center facilities that serve directly for (a)entertainment and (b)arts purposes are expected to be positively affected by the market size. Due to the consumption of the entertainment and arts being sensitive to transportation and time costs, these facilities are expected to be affected more by the municipality market size, and the local labor market size than the market size outside of local labor market.
Methodology Multiple-source secondary data collection: Accessibility Measurements for Swedish Municipalities & Köpcentrumkatalogen 06-07
Quantitative Approach: Multiple Regression Analysis
Log Transformation Internal Elements of Shopping Centers Shopping Centers in Sweden Descriptives Models Hypothesis 1: Success = β0 + β1InMun + β2InLLM +β3OutLLM + ei
Hypothesis 2: Diversity = β0 + β1InMun + β2InLLM +β3OutLLM + ei
Hypothesis 3.a:Entertainment = β0 + β1InMun + β2InLLM +β3OutLLM + ei
Hypothesis 3.b:Arts = β0 + β1InMun + β2InLLM +β3OutLLM + ei
Correlation Matrix Hypothesis 1 Success = β0 + β1InMun + β2InLLM +β3OutLLM + ei Hypothesis 2 Diversity = β0 + β1InMun + β2InLLM +β3OutLLM + ei Hypothesis 3.a Entertainment = β0 + β1InMun + β2InLLM +β3OutLLM + ei Hypothesis 3.b Arts = β0 + β1InMun + β2InLLM +β3OutLLM + ei conclusion In the light of previous research, the findings of empirical study showed that municipality market size has a significant impact on success, diversity, and the existence of entertain-ment and arts facilities in shopping centers in Sweden.
Following the theories on agglomeration economies and location, the empirical findings of the study once more proved that the market size that is closer to both the supplier and the consumer is important in terms of understanding the spatial dynamics behind success and diversity of shopping centers.
The findings also showed that the existence of entertainment and arts facilities is sensitive towards the municipality market size.
Thank you...
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