Shopping malls that become not just a place to buy, but a destination offering activities are a viable path for suburban shopping malls to sustain their presence in the suburbs. Interestingly, in Brazil, one of the largest mall chains pivoted to a mixed-use -- mall and fulfillment center space where items or even food is delivered closer to the customer, this too could be a viable path for a comeback. While remote working may offer respite in the sense that people won't need to be as urbanized, it doesn't negate the undeniable convenience of e-commerce and big pivots will be required for a true turnaround.
It’s a good move for the short term because it makes the chain competitive with the fastest delivery times across the industry, so it’s definitely going to drive volume and be an option that consumers are increasingly attracted and loyal to. Questions begin to arise when you look at the move over the long term – will customers be loyal to Instacart or Family Dollar? What kind of data will they receive from Instacart (if any) which would allow them to cross-sell and up-sell? And how are normally costly returns going to be dealt with?
Values are important, but unless there is some benefit to the consumer, they simply choose the option that has a two-day free shipping standard. Those retailers that survived Covid-19 didn’t just have values, they provided value to their customers as well. They provided value via fast delivery that was convenient, unique offers, and personalized tech such as smart sizing for online apparel purchases. The takeaway was that consumers like buying from direct to consumer startups, but they need to offer something different or competitive when compared to the retailing behemoths.
One of the important points highlighted in this article is the fact that consumers are now more reliant on technology. While proposed legislation is a crucial facet to make sure that shift doesn’t expose customers, retailers need to be wary when it comes to the type of technologies deployed, even if they follow guidelines. In the sizing space that my company operates in, for example, we see many sizing solutions that leverage a users’ camera to take photos of them while they’re half-naked in order to provide accurate measurements. This type of usage is inherently sensitive and retailers should look for alternatives.
This approach makes sense from a cost perspective, but it’s essentially applying a Band-Aid and expecting a serious wound to heal. The fact of the matter is that reverse logistics are a thorn in retailers’ sides and that has been further exacerbated by Covid-19 and the shift to e-commerce. The culprit? Overwhelming its sizing issues, so instead of cutting their losses, retailers need to be addressing the sizing problem at its source, ensuring a great fit and negating the need for a return. A continuation of the same policy might reduce costs, but it's unsustainable for businesses and the environment.