Summary of Key Points
The traditional practice of allocating floors in shopping centers according to fixed business categories (e.g., luxury goods and cosmetics on the ground floor, children's clothing on the third floor) is no longer effective. This is especially true for the third floor, which has become an "unwanted middle layer" due to the decline in sales of three main product categories: children's products, women's clothing, and sports merchandise. Brands are trying to break this pattern by leveraging the popularity of neighboring stores, but the real solution lies in overcoming the outdated concept of hierarchical floor usage and focusing on consumers' actual needs.
Detailed Analysis
Why Has the Third Floor Become an Unpopular Option?
In the past, the third floor was supported by three main categories:
- Children's Products: Toys, clothing, and educational services.
- Women's Clothing: Fashion for young women and adult women.
- Sports Merchandise: Brands like Nike and Adidas.
However, these categories are now facing significant declines:
- Children's Products: Lower birth rates mean parents want more meaningful activities for their children, who prefer trendy IP-based products (e.g., Kuromi, Hello Kitty), which are no longer limited to the third floor.
- Women's Clothing: Women's clothing needs have diversified; they now buy lululemon yoga pants on the ground floor, Salomon hiking shoes on the fourth floor, and Chinese-style streetwear near trendy stores. The demand for clothes remains, but it's no longer confined to specific floors.
- Sports Merchandise: Everyone wears sports attire, so brands are moving down to the ground floor (where there is more traffic). For example, Adidas Originals has gained a prominent position on the ground floor after its resurgence.
As a result, empty spaces on the third floor are often filled with various businesses such as gyms, beauty salons, and digital experience centers, creating a chaotic mix of offerings.
Two Strategies Brands Use to Leverage Popular Locations
Even in difficult situations, there are opportunities. Brands use clever tactics to secure good locations:
- Strategy 1: Lower-priced products next to higher-end ones within the same category. For example, affordable Manner coffee shops are placed next to Starbucks, as consumers assume high-quality products are nearby.
- Strategy 2: New or upgraded brands are positioned next to established ones. This gives them an instant sense of prestige. For instance, trendy brands are now placed next to luxury and premium brands, making them seem more credible.
The essence of these strategies is to capitalize on consumers' perceptions of neighboring businesses to enhance their own value.
The Root of the Floor Hierarchy Problem
Domestic shopping centers still use gimmicks like designated "LG floors" or "M floors" with unique layouts, trying to hide the issue with design. However, international centers have long abandoned such hierarchical structures:
- Thai markets offer coffee shops within food stalls, and old Japanese warehouses are converted into shopping centers with themed areas on specific floors.
- Domestic centers and brands still focus on the idea that the ground floor is the most prestigious, but consumers don't care about which floor a store is on; they will go wherever there are interesting activities or products.
In essence, the problem with hierarchical floors is an outdated mindset of using them as symbols of status, not the location itself.
The Way Forward: Follow Consumer Needs
Today, consumers shop in centers for experiences rather than just to buy clothes (online shopping has made this possible). Brands' value also shifts:
- They rely on aesthetic appeal, emotional connection (e.g., comforting or trendy products), and social value (e.g., products that encourage sharing on social media).
- Centers should abandon the traditional notion that the ground floor is always the most expensive and best option and instead focus on creating experiences that match consumers' current lifestyles. For example, if young people enjoy trendy products on weekends, those stores should be placed in prominent locations, whether on the ground floor or the third floor.
Conclusion: The issue with the third floor is not with the floor itself but with the outdated industry mindset of using floors to categorize customers and define their status. Consumers want experiences that reflect their current lives, not rigid floor guidelines.