The struggle of the malls: "The only resource that really counts is the customer's time"

In times of Israeli routine, when many fly abroad and make purchases there or alternatively specialize in finding the most profitable prices online, malls can no longer settle for a mix of regular stores with the same popular brands and fast food complexes.

If they want to remain relevant, that is, to have high revenues, and to get people out of the house, they must add elements like padel courts on the roof, extreme parks, concept restaurants, exhibitions, or gaming. They call it Retailtainment - a connection between retail and entertainment, designed to turn the purchase itself into an experience. Often, the attraction is what brings the crowd, and the shopping happens "along the way".

This is not a new term: already in the 90s, sociologist George Ritzer spoke about using atmosphere, emotion, sound, and activity to attract customers and put them in a buying mood. Then cinemas were introduced to malls, but after a few years they were removed, on the grounds that they were not profitable and "wasted" space. Now the understanding is sharpening that the value proposition needs to be re-refined, sometimes with an investment of tens of millions of shekels.

"Not just ordering by phone"

The retailtainment trend can be met in a series of places across the country. "Malls are no longer fighting only for the wallet, they are fighting first and foremost for time," says Yaniv Feinshneider, CEO of the Seven Stars malls of Hachsharat HaYishuv.

Feinshneider points to global studies that show that more than 75% of millennials and Gen Z prefer to invest in experiences over physical products. "The customer is not looking for another place to 'spend money'," he explains. "The only resource that really counts is his time. When a customer chooses to leave the house and dedicate two or three hours of his free time to us, this is an expression of trust."

This concept is applied in several complexes of the group. Thus, in the Seven Stars mall in Herzliya, Gravity Park was opened, an amusement park full of attractions for children with an investment of about 50 million shekels, and in the coming months two restaurants are also planned to open. In the Seven Stars complex in Eilat, which was built opposite the old airport, a new restaurant opened on the roof with an investment of about 10 million shekels.

In the Gold Mall in Rishon LeZion, for example, they plan to open a complex on the roof with four padel courts, a Thai chef restaurant, a bar, and free seating areas. "In the end, most malls are quite similar in terms of brand mix, and you always have to think outside the box to get people to come," says the mall's CEO, Yossi Lagziel.

For illustration, he says that last year the Rubik's Cube exhibition was presented at the mall, on an area of about 1,000 square meters. This year, "Build City" was established - an interactive construction city for children, with mechanical tools and sand surfaces, which also spans about 1,000 square meters. "An exhibition is tangible - you have to come and see, and not just order by phone".

Like a lounge at Ben Gurion Airport

Also in the Renanim mall in Ra'anana, from the JTLV group, they are planning a significant change in the mix. The mall's CEO, Dror Okashi, defines it as part of the "evolution of malls". According to him, "customers are asking for it, and the stimulation threshold is higher. This means you have to give them more than a store that sells fashion or basic culinary, which are the classics of malls. Today we see an expansion in the worlds of entertainment".

On the parking tower of Renanim, a padel complex with 12 courts is currently being built, which according to Okashi is expected to be the largest in Israel, with an investment of 8 million shekels. According to his estimate, within about two months it will already be possible to play at the place. At the same time, a billiard hall operates in the mall, which expanded to another floor following the demand.

But the change does not end with attractions. Renanim invested, according to Okashi, about 50 million shekels in renewing the mall's appearance, the passages, and the external facade. "We really want to resemble a lounge of airports, with lounge sofas and everything modern. This is the direction - not to do more of the same, but to bring innovation and excitement".

Also in the Arim mall in Kfar Saba, they are trying to shift the center of gravity from shopping to experience. "The mall of the past, which was based only on shopping and brands, can no longer alone generate loyalty or interest in the customer," says the mall's CEO, Meital Manshes. In Arim, they are trying to base the offer within the framework of updating the business mix, and opening restaurants like Port 19.

Whoever adopted the trend and stuck to it for decades is Dizengoff Center in Tel Aviv. CEO Dan Filc reminds that it is not only the mix but also the architecture - and anyone who has visited the Center at least once understands what he is talking about. "The American method talks about increasing the stay time in the mall in an attempt to increase revenues," he explains.

One of the old anchors of the Center is the food market, which according to Filc attracts thousands of people every week. The list of activities is much wider, and last year they counted 56 events and competitions in the Center just in the fields of sports and gaming. Every few months wine and coffee events are held, and also Lev Cinema, according to Filc, is part of the equation.

"I believe that many malls regret today that they removed the cinemas. What was once perceived as an area that could be converted into more stores or commercial complexes, today receives renewed value precisely thanks to the ability to create an experience, and to extend the duration of the visitor's stay".