Why wouldn’t a retailer want to be part of an online shopping center marketplace?
The head of one of the world's largest proptech companies says center owners shouldn't wait to let shoppers shop their entire centers online.
As a consumer, it’s easy to understand the appeal of a shopping center/e-commerce marketplace, because today’s consumers expect shopping centers to be fully integrated omnichannel offerings.
In a recent survey of nearly 600 American consumers, my company, Placewise, found that 87% of the respondents are interested in a digital marketplace offering from their shopping center on which they can browse the center’s complete content, make several purchases with one transaction, and pick up the entire order in one location or have it delivered.
Unfortunately, a big gap between that expectation and reality exists today. Technology isn’t the issue. Shopping center marketplace platforms exist and are live -- from Scala Eiendom’s Kuben Senter in Norway to Centennial’s MainPlace Mall in California. Even the Mall of America has introduced a marketplace called Shop MOA Online. To close this gap and move shopping center e-commerce marketplaces from an idea to a mutually beneficial and commonplace offering, landlords and retailers will need to work more closely together.
So why wouldn’t a retailer want to be part of a shopping center e-commerce marketplace? Honestly, we have no idea, but here are some of the reasons they should.
More shoppers. Malls and other shopping destinations have millions of unique annual visitors but not every shopper visits every store. Centers are increasing the priority they place on establishing direct digital shopper relationships and some have databases equal to as much as 70% of their total annual unique visitors. That’s a lot of influence that can be used to introduce more shoppers to your brand and your products and services.
Shopper experience and expectation. Most people still prefer to shop in-person, but when they can’t they’ll often turn to a trustworthy online retailer, most often the one with free two-day shipping and smiling boxes. Yes, some brands have an e-commerce site and offer pick-up in-store and curbside, and that’s great if you’re purchasing from one store. But what if a shopper wants to purchase 10 things from six different stores and order dinner to go? Really, how convenient is it to complete seven separate online transactions, drive to the shopping center, park, re-park, get out of the car, get back in the car, and pick-up from six stores and a restaurant? What if they needed to have it delivered today? People know what a great experience feels like, but they aren’t willing to give up convenience to get it. They know they can have both, and a shopping center e-commerce marketplace helps retail brands deliver it.
Last-mile solutions. The last leg in the supply chain is widely acknowledged as the most inefficient and costly part of fulfillment, accounting for more than 50% of the total cost to move inventory. Most e-commerce purchases are shipped from a centralized or regional distribution center contributing to the overall non-sustainable environmental impact of e-commerce related to distribution, packaging and returns of online goods. Coupled with store fulfillment, a shopping center e-commerce marketplace can be a game-changer for retailers looking to reduce fulfillment costs, environmental impact, and reduce the cost of returns.
Technical requirements. To be part of a shopping center, e-commerce retailers will need to make their product and live inventory data feed available to the shopping center. Quality of inventory data is a well-recognized industry challenge. However, there are more and more reasons for retailers to invest in real-time inventory data feeds. Retailers are becoming platforms of commerce rather than channel specific, and they will be leveraging a magnitude of alternative sales channels in the future. As long as there is a datapoint for access to product and inventory data the retailer can let others sell for them without any big technical investment.
For retailers and shopping centers, embracing the idea of a mutually beneficial shopping center e-commerce marketplace is no longer about the future. Now it’s about keeping pace.
Peter Tonstad is the CEO of Placewise, a global leader in property tech serving more than 1,050 shopping centers in 20 countries across four continents.