The ongoing move to online shopping further catalyzed by the Covid-19 pandemic has already doomed some shopping complexes in America, where, as reported by The New York Times daily on August 24, so far in 2020 “16 percent of all retail industry loans are delinquent, according to statistics tracked by the data firm Trepp.” One of the first projects to close in Poland was Łódź’s Galeria Sukcesja. Others, in the shop-rich cities of Poznań, the Tri-City agglomeration, or even Warsaw, maybe looking for buyers, refinancing or both.
One way shopping galleries may maintain value for customers is to think of themselves as department stores – both online and offline. While it may sound crazy given the recent bankruptcies of iconic brands such as Neiman Marcus and J.C. Penney, and other anchors, such as Nordstrom, closing many locations, and while there may be no way to recover all of the footfall lost in the enduring march toward digital shopping, there are ways malls (and their brick-and-mortar tenants) can better capitalize on the digital shopping trend.
MALLS ONLINE
Shopping centers are uniquely positioned to place tenants’ offers online – we might say become digital marketplaces. Doing so would have to either give shopping complexes a cut of the profit for products sold online or payment for driving traffic. In another model, more akin to the current leasing of physical space, tenants could pay “rent” for their presence in this digital department store. Whatever the ultimate model, such a move would allow smaller retailers or niche brands to enter the retail space (which they usually now do through social media channels), and gain access to new customers and expertise of the mall operator’s digital team. It seems that Fashion House Shopping Center Klif in Warsaw made an inchoate attempt at this during the pandemic, by placing links to tenant’s online stores on its webpage. It would be interesting to see the experiment unfold on a larger scale to include tenant inventory available directly from the establishment’s page for purchase and rapid delivery or click-and-collect.
DIGITAL GOES PHYSICAL
In addition to offering retailers’ stock online, shopping galleries can allow online-only retailers and make them available at physical stores. Proper curation would make niche brands, currently available only through social media or online, available to consumers at physical locations. Little-known brands would benefit from offline exposure by increasing their credibility while consumers would get the benefit of viewing new brands and hence be encouraged to visit the shopping center again. The advantages of physical department stores include the presence of many brands in a small easily accessible space along with the opportunity to touch and try on products. While shopping complex owners or operators are likely to be wary of becoming retailers, mini spaces at these multi-brand stores could be leased in a way similar to mall kiosks today, mitigating some of the risks. Further, their local styling and marketing experts could be well-positioned to curate which brands feature in the new multi-brand concept.
PERSONALIZED RETAIL
By thinking and acting like online-offline department stores, shopping galleries can increasingly personalize their offerings. Currently, mall operators already “increasingly often combine platforms and interconnected data-bases allowing for unification or personalization. By combining them with loyalty programs, appropriate customer management systems, followed by experience and proper service offered after the purchase, we build emotional marketing and a greater bond between the customer and the brand,” writes Daniel Tomasz Stańczuk, marketing & PR senior communications specialist, asset services, Cushman & Wakefield, for Retailnet.pl. It seems that putting the tenants’ offer online would allow shopping centers to gather even more data, link it properly to loyalty cards, and build even better omnichannel personalized experiences. In such a scenario, a customer coming in for click-and-collect could have an AI bot or a personal shopping assistant (or both) prepare an additional offer of complementary goods for them to be ready to view at the pickup point in the shopping complex. This experience could be complemented by giveaways, e.g. free t-shirts, discounts or payment cards for use in the physical location and special services such as tailoring to custom-fit with next-day delivery, to enhance the experience.
SHOPPING DESTINATION AND EXPERIENCE
None of what I’ve recommended above should be taken to mean that malls should stop working to become destinations and experiences or stop integrating more with their surroundings and local ecosystems in as many ways as possible. While customers are digital, they still love local shopping experiences: a phrase nicely coined by Emplate.it. And to be successful, malls may well have to become more of everything for everybody on every channel.
