Malls are in a mess of trouble. Throughout the year, mall traffic is tracking below 2019 levels on a month-by-month basis.
And in September, when back-to-school shopping should have invigorated shoppers, visits to enclosed malls were off 10%, as were open-air lifestyle centers (OALC). And September was the worst month all year for OALCs, according to Placer.ai. OALCs got a partial reprieve during the pandemic because of their open-air concept.
Caruso’s centers haven’t felt the decline yet. Foot traffic across its retail portfolio is back to pre-pandemic levels and dwell time has increased. Further, many tenant sales, conversions and traffic are ahead of 2019.
But it sees the writing on the wall with inflation at 40-year highs and a recession almost inevitable. To keep its centers’ momentum, Caruso has just introduced a new loyalty program that is as different as its centers are, combining retail with residential, office and hospitality offerings.
Mall visits YTD 2022 compared to 2019
Mall loyalty programs have been tried by others, but haven’t really gotten off the ground. Generally, the mall reward concept is seen to conflict rather than support retail tenants’ own loyalty programs.
Simon launched one at its Westchester mall in 2014 though it seems to have fallen by the wayside. Westfield had one too, but it is no longer offered. Simon did not respond to request for comment before posting.
Even Caruso offered a limited reward program available in only two of its properties, but those were “sunsetted” as the new program was developed, explained Corinne Verdery, the newly appointed Caruso CEO.
“The old loyalty program wasn’t portfolio-wide, and we felt the need to evolve the program to do better for our customers and tenants,” she shared. “Our Caruso Signature is the first-of-its-kind loyalty experience across the entire Caruso world of retail, hospitality and residential. For example, a residential tenant can get rewards just by paying the rent.”
“The Caruso program is designed not to conflict with other loyalty programs of our tenants,” she continued. “So if you are a member of another loyalty program with one of our tenants, this allows you to gain even more benefits by signing up with Caruso Signature.”
Years in the making, the new program was built upon a foundation of research that engaged stakeholders in the Caruso community, including shoppers, residents, hospitality and restaurant guests and tenants.
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“It’s another example of the attention to detail that Caruso does in the design of our properties and that people experience once they get here,” Verdery said.
Instead of earning points, members collect virtual Caruso Coins, which has a material ring to it. Through its app, all linked credit card purchases made on property earn “coins” and residents earn them too by paying monthly rent on time through any payment method.
Coins can be redeemed for experiences on Caruso properties, including at restaurants, movie theaters, resorts, hotels and other member-only special events.
The reward program aligns perfectly with what people come to Caruso properties for: to spend time doing things, not just shopping.
“We reward guests for their shopping, but also for dining and vacationing with us. It’s all about building stronger relationships and a real sense of community with our guests and residents,” she said.
Thus the system builds customer relationships for its retail tenants too. Some 70% of customers already dine on its properties twice a week, and 70% confirmed they’d return more often if rewarded for the time spent on the properties. Residents also find a rewards program particularly appealing, with 80% saying a reward program would make living at a Caruso property more valuable.
As Caruso collects more data from customers and learns more about what they do during their visits, the system will power more personalized experiences for future visits. For example, a guest’s favorite cocktail can be waiting at the table when they arrive after making a reservation.
Caruso partnered with Fidel API to develop its proprietary system. And with concern about data security growing, Caruso does not share any data outside the company.
“Members share the data they feel comfortable sharing, like birthdays or favorite cocktail, and we’ll remember that and make sure the information is shared appropriately,” she affirmed.
It’s still early days for the Caruso Signature program, but Verdery said response has been “tremendous” among shoppers, residents and tenants.
“We have three pillars in our company: innovation, community and Heartshare, which is our word for building trust and serving our customers. This is just another evolution of how we deliver that promise to our customers,” she said.
“We believe Caruso Signature will enhance our relationship with our customers, our communities and our tenants. It will enhance the customer and guest experience but also the businesses of our tenants.”
Caruso calls this the “first-of-its-kind loyalty experience” and that may be because it is the only mall owner that has the bandwidth to offer such a distinctly different program.
Other mall reward programs were dead on arrival, but Caruso’s looks to have legs by appealing to all constituencies that count: shoppers, residents, hotel and restaurant guests and tenants.
