The Shops at Columbus Circle, a much-anticipated urban mall, opened in New York City in June 2004 inside the new Time Warner Center. The reaction: a New York shrug. The reasons for this indifference tell us much about the mind-set of the typical American consumer. The four floors of the mall proper are imposing -- vaulted marble, miles of gleaming glass providing a view of Central Park -- yet the stores are all rented to familiar, solid middle-rung retailers: J. Crew, Eileen Fisher, Benetton, Coach, Crabtree & Evelyn. These purveyors of straightforward, practical clothing and accessories are overwhelmed by their grand surroundings. Worse, in many of the center's stores, the clothes, shoes, and handbags are laid out sparingly, as if they were special or luxury items. Most of all, shoppers never have the feeling of adventure and discovery that accompanies much shopping in New York, where a rich variety of products is part (and parcel) of daily life.
Downstairs in the basement, though, the Shops at Columbus Circle get it right. There, one can find the second Whole Foods Market to open in Manhattan. (If the shopper can find it. Unbelievably, signage indicating the market's whereabouts is nonexistent.) Like all markets and bazaars through the ages, Whole Foods is an enticing hive of activity and mounds of goods. Even its hefty prices and laugh-provoking pretensions -- a sign at the bakery counter advising, "If you are concerned about the organic integrity of the bread, slice it at home" -- are forgiven because of the vitality of the overall surroundings. Seeing this, it becomes apparent why the Whole Foods Market chain has gone from being a hangout for crunchy types to being a contender for the Fortune 500 list of largest businesses in the United States. In an interview in The New York Times Magazine, John Mackey, the chain's founder, explained why he took up the challenge of stimulating his customers: "We love to shop. And Americans love to eat. But paradoxically we don't love to shop for food. Grocery shopping in America is for the most part a chore."
Chiefly, John Mackey predicted that consumers would pay a premium for organic foods, something that even 10 years ago no one would have imagined. With his finger to the wind of change, he understood that the average American consumer was evolving from a herd animal into a sophisticated, knowledgeable, and assertive creature.
Paco Underhill, author of Call of the Mall: The Geography of Shopping (Simon & Schuster, 2004), is another person who has long known that bland, emotionless, one-size-fits-all approaches to retailing no longer cut it with consumers. As founder and managing director of Envirosell, a firm that advises merchants around the world on customer behavior, Underhill would have a field day dissecting the reasons the Time Warner Center's mall stumbles upstairs but succeeds in the basement.
Two other books of note published this year illuminate the changing character of the American consumer. Just as 10 years ago we could not have imagined customers paying a premium for organic foods, we could not have foreseen the role that design would play in giving products a competitive edge, a trend that Virginia Postrel examines in her dynamic book, The Substance of Style: How the Rise of Aesthetic Value Is Remaking Commerce, Culture, and Consciousness (HarperCollins, 2003).
While we are on trends affecting consumer behavior, it's also worth looking at a nation-changing one that has been building for years in the United States: the population shift from the cities to the suburbs. Conservative commentator David Brooks calls the phenomenon "the suburban supernova" in his entertaining book On Paradise Drive: How We Live Now (And Always Have) in the Future Tense (Simon & Schuster, 2004).
Paco Underhill, a self-described retail anthropologist, first caught the business world's attention with his eye-opening bestseller, Why We Buy: The Science of Shopping (Simon & Schuster, 1999). His new book, Call of the Mall, is equally revelatory. After reading it, no one can be involved in retailing without an Underhill-like commentary running through his or her head.
The call of the mall, he says, has always been with us. "The saga of humankind can be told at least in part through the story of shopping," he writes. "Even the simplest agrarian societies needed places to assemble to trade in goods, and from that basic impulse came everything else, marketplaces, villages, towns, cities. The mall is just another organizing principle." But it's an organizing principle that, Underhill persuasively argues in Call of the Mall, is past its prime.
To show why, he takes readers on a tour of an average American suburban mall. Nothing escapes Underhill, from the blasted heath of the parking lot and the unimaginative stores to the bilious food joints and the purely functional restrooms. With the exception of city shopping centers, where local government often demands community facilities and design equity in exchange for building rights, the American mall is mostly a utilitarian affair.
Essentially, malls evolved from a simple concept: Stores in strip malls were turned to face one another and a roof put over it all. After that, in the American way, the result was sanitized, homogenized, large-sized, and thoroughly air-conditioned. We learn from Underhill that U.S. malls are usually undistinguished because they are traditionally erected not by the merchant princes responsible for department stores but by developers whose mandate it is to turn suburban plots into gold mines at the lowest outlay. A mall can be thought of as "a store of stores," argues Underhill. But the malls' proprietors don't think of them as stores with something to sell, only as real estate. Thus, we get the typically ugly exteriors -- "A big wall with a mouse hole," in the words of one unashamed developer -- and the bland interiors with their dull, unhelpful signage.
The problem facing American mall developers is the radical change in customers' expectations. They've been exposed to and are excited by exotic foods, fashion labels capable of responding to weekly fluctuations in tastes, and even avant-garde architecture. Because alluring buildings such as the Guggenheim Museum in Bilbao, Spain, designed by American architect Frank Gehry, draw so many tourists, other cities are falling all over themselves to get their own signature piece of architecture. Consumers aren't content to read about aesthetic advancements; they want them to be a part of their world.
Retailers are responding to this, too. A designer's flagship retail store, such as the Rem Koolhaas-designed Prada emporium in New York City's Soho, is no longer just a fashion destination for the elite. The architecture has become a tourist attraction, even though the clothes are too expensive for middle-class consumers. At the store of couture designer Issey Miyake in New York's Tribeca, a proud sales assistant, pointing to the waves of tortured metal decorating the ceiling, declaimed, "Our aluminum is by Gehry."
Underhill also points out that in Europe, one can already find more attractive, pleasurable malls, such as the Vasco Da Gama and Colombo centers in Lisbon or Diagonal Mar in Barcelona. These consumer environments reflect what shopping can be when attention is paid to consumers' evolving needs and desires. Erected by visionaries with mercantile DNA, these European malls feature a broad variety of entertainment and distractions for those who want to socialize or idle away time; starred restaurants and high-quality, take-home prepared food; and such service offerings as child care providers, boot makers, butchers, and bakers (real bakers, not the mass bakery franchises found in American malls). Ensuring their longevity, European malls, and some in Japan and Latin America, are incorporated into neighborhoods in such a way that they become community gathering places, accessible by public transport or bicycle or even (and this is very un-American) by foot.
Old-style malls in the U.S. are still operating, even if they are not thriving. Little by little, however, with the rise in popularity of Main Street and village complexes, whether built from scratch or renovated, one can say that the roof is being taken off and the elements restored. "The mall was a little too hermetically sealed for our tastes," writes Underhill. "This trend renews my faith in humanity."
Moreover, according to Underhill's research, when consumers in the U.S. are given a choice between a mall and a Main Street, they choose the latter because that kind of shopping complex not only is exposed to the natural elements, but has smaller, cozier buildings that encourage serendipitous browsing and don't overwhelm shoppers.
Looking into his crystal ball, Underhill sees the best and most agile of American malls surviving and the others receiving makeovers as convention sites or even ethnic hubs. The most successful transformations so far have involved the latter -- malls repurposed as specialty centers catering to immigrant cultures. Korean, Japanese, Vietnamese, Chinese, Caribbean, and Latin malls, or a mixture of all these, are attracting not just their target group but Americans curious about global differences and hungry for anything new.
In The Substance of Style, Virginia Postrel tells a different story about the evolving sophistication of the average consumer. She argues that through television, the Internet, and catalogs, the middle classes have become literate in the language of aesthetics and its history, once realms of an elite, and they are increasingly aware of its ability to help them "work hard, play hard, and live well," as the promo for the cable television show iDesign trumpets. Businesses, pressed by customer demand and shrinking profit margins, have wised up to the need for greater product differentiation, and are hiring more design professionals than ever before. (The number of industrial designers employed in the U.S., Postrel records, has increased by 32 percent in the last five years, and membership in the American Institute of Graphic Arts has shot up from 1,700 to 15,000 since 1995.)
Postrel presents another harbinger of what's to come in her description of what is happening at GE Plastics' R&D center, which is staffed by engineers who listen as designers and marketers "talk about their dreams" and respond by providing them with customized new products in a plethora of colors and special effects. Because these new plastics command high prices, General Electric's engineers are working overtime to invent new ones. At the moment, the company is able to ply its customers with an array of hues and tints that make a Pantone color chart look anemic. In the future, its engineers predict, plastics will feature dazzling visuals -- the shimmer of water or the sparkle of diamonds -- or have the sort of weight and texture that conveys quality. GE hopes to eventually invent plastics with evocative smells, such as that of a summer beach or the air after a rainstorm. In the words of a company spokesperson, "The sky's the limit."
In her brainy yet accessible book, Postrel describes GE's ambitions and other manifestations of the surge of interest in styling, capping it all with a thesis contending that in the U.S., design has been held back by a confused attitude toward aesthetics. In a culture that is shot through with Puritan values, she argues, the pleasure derived from aesthetics is suspect because it is immediate and emotional; only afterward can the intellect be applied. Postrel quotes a mid-century designer's definition of aesthetics as "the art of using line, form, tone, color, and texture to arouse an emotional reaction in the beholder." Americans fear being suckered or regarded as superficial if they succumb to aesthetics. "The trick," she writes, "is to appreciate aesthetic pleasure without confusing it with other values." Aesthetic style now comes in many forms, from which Americans are learning to pick and choose to give shape to their identities.
To Postrel, attention to aesthetics is not just a business strategy; it's a major ideological shift away from cultural leaders' dictation of a dominant aesthetic that will lead to enlightenment (and imbue its keepers with power). One observer whom she quotes went to the nub of the matter when he said, "Mass production offered millions of one thing to everybody. Mass customization offers millions of different models to one guy."
Aesthetic abundance fuels consumption, whether at Crate & Barrel or Apple Computer, which hasn't escaped the attention of finger-wagging social critics prone to viewing the world in black-and-white terms. To hear them tell it, we are all victims of crass materialism. For example, in economist Robert Frank's ideal world, "we would all benefit if men could agree to wear cheap, ugly suits and spend their money on more important and substantial things -- a vision of fashion not unlike the British Utility scheme that took the ornament out of furniture and declared bookcases more essential than easy chairs," writes Postrel. She posits that in adopting this view, social critics seem blind to the human impulse to take pleasure in adornment for adornment's sake.
In On Paradise Drive, David Brooks sets about dispelling the common view of the populations of the suburbs as an undifferentiated mass. Instead he presents a highly differentiated demographic framework -- one that sees the populations of the suburbs as if they were living in the many rings of Saturn.
In the ring closest to the city center is "the progressive suburb, populated by urban exiles who consider themselves city folks at heart but moved out to suburbia because they need more space." Next comes "the affluent inner-ring suburbs, those established old-line communities," the habitat of doctors, lawyers, and executives, who haven't gone to war but "have endured extensive home renovations." In the ring beyond are "the semi-residential, semi-industrial zones," home to strip malls and the immigrants who service the overachievers and who once would have settled in the inner city but now go straight to these "underutilized urban gaps." Then comes the ring that most resembles the conventional notion of a suburb: basketball hoop in the drive, carports, and ranch homes. In the ring farthest from the center are the new "exurbs," which are eating up farmland at an alarming rate and replacing it with snout houses -- those ungraceful homes that seem to be all garage -- big-box stores, and office parks.
With that nuanced view of American suburbs in mind, it becomes clear why a one-size-fits-all attitude to retailing is a nonstarter. But Brooks's real agenda in this book is a larger one: to prove that Americans are not empty-headed, debt-building, shopping-crazed consumers. To do this, he reads and cites all those writers who have cast a jaundiced eye on America, venturing back to the 19th century and the English philosopher Morris Birbeck, who summarized the American spirit as "Gain! Gain! Gain! Gain! Gain!" and working his way forward to the current crop of negativity peddlers. Brooks shakes his head sadly at the miasma of gloom these writers have collectively created. Even observers known to be keen on American vitality, such as Alexis de Tocqueville, find it necessary, Brooks writes, to "slip in a little shiv of equivocation about our shallow souls."
Through statistics, Brooks demonstrates the fallacy of suppositions about America's vacuity. For example, Americans apply even more energy to worship than they do to consuming, with 86 percent believing in heaven. (In their never-ending quest for self-improvement, Americans shop among religions, changing faith more often than does any other nationality.) While they lavish $40 billion on their lawns, more than the tax revenues of India, Americans also each donate on average more than $1,000 a year to charity, a sum much higher than any other nation's, and 80 percent of those shallow souls belong to volunteer organizations, compared with, for example, 6 percent of the British. Not to forget their high-octane industriousness: Americans work even longer hours than the Japanese.
Principally, however, in the words of Harvard Business School's social psychologist Shoshana Zuboff, Americans these days "are seeking more control over the quality of their lives, not just the quantity of their stuff," a sentiment that shines through all the books under discussion. This is a sensible response to the lifestyle complexity generated by globalization and technology.
Not even the most brilliant seer knows where all these developments will take us. But common sense says that companies are going to have to do a much better job of listening to consumers, and doing more with what they have to say. In fact, retailers, manufacturers, and marketers might do well to turn H.L. Mencken's damning dictum, "No-one in this world, so far as I know has ever lost money by underestimating the intelligence of the great masses of the plain people," on its head.
Kate Jennings ([email protected]), a regular contributor to strategy+business, is the author of Moral Hazard (HarperCollins, Fourth Estate, 2002), a novel about Wall Street in the 1990s, which won Australia's Christina Stead and Adelaide Festival fiction prizes and was nominated for the Los Angeles Times fiction prize. She is also the author of the critically acclaimed novel Snake (Back Bay Books, 1999).