Will localized e-commerce work for malls?

Discussion
Source: shop.mallofamerica.com
Dec 20, 2021

Mall of America last week announced the debut of its first e-commerce website where customers can shop local inventory from various retailers located at the mall.

Browsers head to shop.mallofamerica.com and browse “thousands of in-stock items from your favorite stores at Mall of America,” according to Shop MOA microsite. Shoppers use a single checkout and pick up their purchases at a designated spot near a mall entrance. Home delivery is available for customers within 15 miles of the Bloomington, MN mall.

“Skip the Line. Buy Online,” states Mall of America’s marketing copy on the Shop MOA microsite. “Be totally prepped for the holiday, with gifts in hand and peace on earth. MOA has made it even easier to shop our in-store offerings, totally online! No out-of-stock surprises or shipping delays.”

Only about 70 of Mall of America’s over 520 stores are so far participating in the program. Beyond the logistics of in-store pickup or ship from store, one challenge is continually updating in-store inventories to the website in real time.

Only a few other malls offer localized online selling.

In September 2020, Centennial introduced its “Shop Now!” e-commerce platform in seven U.S. markets. In June 2021, Florida’s Bal Harbour Shops launched an online marketplace for its upscale tenants.

Centennial said online sites can be beneficial to mall traffic as customers can pre-plan their in-person visits.

A mall’s online site can also foster discovery to complement in-store browsing. On the Shop MOA site, shoppers can filter down searches by newer items, sub-categories, store, color, sizes, price and occasion. Mall of America marketing VP Grant Buntje, told Twin Cities Business, “We’re thinking about the power of shopping versus buying.”

Bal Harbour Shops’ online site is designed to reach clients who are out of town or otherwise can’t make it to the mall. However, the site’s curated selections and extensive style guides and other content are ultimately designed to encourage in-person visits.

Matthew Whitman Lazenby, president and CEO of Whitman Family Development, Bal Harbour Shops’ owner, told WWD, “We are not trying to compete with Farfetch or Mytheresa. This is very much Bal Harbour Shops-centric.”

Discussion questions: What do you think of the opportunity as well as the challenges of localized online marketplaces for malls? Should tenants welcome or be apprehensive about online selling tied to localized assortments?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"It's about time shopping center owners realized the need to partner with their tenants, not just lease them space."
"This is an opportunity for those likely suburban consumers to venture into ecommerce shopping in a more controlled environment."
"No matter how I try to look at this differently, it keeps coming across as another last gasp effort."

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17 Comments on "Will localized e-commerce work for malls?"


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Melissa Minkow
BrainTrust

Localized e-commerce is certainly a convenience play for consumers, which is nice, but a lot of the fun in shopping local is the actual in-person experience and the treasure hunt feeling associated with it. During the holidays, this will be appreciated by shoppers in alleviating the stress from crowds, but outside of the holiday season this seems to defeat some of the fun in buying local.

Georganne Bender
BrainTrust

This is a good example of retailers’ or, in this case, mall management’s efforts to sell product. And it’s another example of what they are willing to do to keep customers out of stores.

“Skip the Line. Buy Online” does nothing to increase mall traffic — and that’s the ultimate point, isn’t it? Curbside will be a help to those participating 70 retailers but it sure isn’t going to help Nickelodeon Universe or any of the other attractions. There are a lot of things at the Mall Of America that require actual people, including brick-and-mortar stores.

Kathleen Fischer
BrainTrust

Customers will appreciate the convenience and stores should welcome the ability to provide another way for their customers to shop, but the challenge of real-time inventory visibility across multiple stores needs to be addressed for it to be successful.

Lisa Goller
BrainTrust

Overall, marketing the mall makes sense to maximize online traffic to a single destination, especially as Omicron cases rise.

Benefits include pooling retailers’ marketing power, saving shoppers time, offering BOPIS and certainty of product availability.

Drawbacks include retailers’ loss of control over consumer data, the pressure to deliver bulletproof real-time inventory accuracy, consumers losing the mall’s immersive experience and only a fraction of the total assortment being available online.

Tenants with in-demand products will welcome online selling to boost their reach, sales and loyalty.

David Spear
BrainTrust

For select malls that have tremendous presence, this actually may work. But for the large majority, it will fall flat beyond the holiday shopping season, primarily because it won’t gain the traction required for prolonged, sustained periods. Retailers struggle to keep their own inventories updated in near real time, so adding another data point to the mix complicates things even more.

Ken Morris
BrainTrust

Offering BOPIS at a single pick-up spot for a mall is a smart idea.The parking logistics alone of doing BOPIS at anywhere near that number of stores would be a nightmare.

The real challenge is for retailers to nail the real-time inventory accuracy piece. Now you’re asking, in the case of Mall of America, 520 separate retailers to have their real time inventory house in order. It’s actually surprising that they have as many as 70 participating. The only way many of those retailers are going to be able to do that is to use safety stock, which is never pretty or good for the bottom line. At least it will draw shoppers to the mall by promising in-stock and no surprises. I doubt that will bring peace on earth, as the copywriter promised, but it will at least bring peace of mind for some.

Dion Kenney
BrainTrust
7 months 25 days ago

There are many dimensions to competition in retail – price, quality, customer service, etc. The e-commerce giants have been gaining market share by making online shopping easier and more convenient than “going to the mall.” It was a competitive advantage that has been beyond the means – financial, IT sophistication, and marketing – of local retailers.

Creating “local online marketplaces” effectively levels the playing field, giving even small retailers an online presence. It also can return the competition to dimensions in which local has an advantage – customer service, proximity, the shopping experience, etc. The key will be making the online component augment the personal experience, not just an additional e-commerce option.

DeAnn Campbell
BrainTrust

Nearly two thirds of in-store shopping begins via an internet search, so offering an online marketplace as an extension of the physical mall is simply bringing the shopping center business model up to current standards. Online and offline are not just enmeshed, they are dependent on each other to generate adequate profit margins to the retailer – through the benefits of in-store assists to online purchasing, and the halo effect to online sales created by brick-and-mortar access. It’s about time shopping center owners realized the need to partner with their tenants, not just lease them space. And malls have an advantage over most online marketplaces in having dedicated brick and mortar placement inside of local communities.

Lee Peterson
BrainTrust

Between this and an amalgamated pickup site for all stores in the mall I can only think one thing: what took you so long? We’ve known BOPAS works for a good five years now and e-commerce for 15. As Bezos said, “if you don’t lean into the future, the future will win every time.”

Gene Detroyer
BrainTrust

How many of us have experienced a trip to the mall to buy a certain product only to find it OOS? This solves that problem for the consumers and if they live close by they don’t even have to go to the mall itself.

There is no doubt in my mind that this idea will spread and be refined — and in many cases the first go-to click will be to the mall’s site rather than Amazon, Target or Walmart.

Rich Kizer
BrainTrust

Sorry to be a wet blanket here. I hope this will be WELL thought out, as I can imagine a lot of cars waiting (which is a good sign), a lot of drivers lost and wondering where to go, and people pulling merchandise but not fast enough. But perhaps in the markets where this strategy launched some time ago, the question marks have been erased. At least for the consumer side.

Ken Lonyai
BrainTrust

No matter how I try to look at this differently, it keeps coming across as another last gasp effort.

I remember “going shopping” at the mall as a mix of specific needs and discovery or, a complete discovery trip. This seems like an acknowledgement that malls are losing and here’s a slight of hand to include them in what is otherwise business taken over by ecommerce.

I think they have nothing to lose by giving this a try, but I don’t expect any measurable positive impact.

Peter Charness
BrainTrust

This was a really good idea about 5 years ago. Today I can order from any website for home delivery and frankly I don’t care if the product is shipped to my house from down the street or across the country, as long as it gets to me quickly. If I want to pick up in store, most of the retailers already offer that as a service. The bigger challenge here is getting shoppers who are habituated to either Amazon, or the store’s own website to go to a different website to do the shopping.

Ananda Chakravarty
BrainTrust

Online marketplaces are not a new concept. At least 4 years ago, BrainTrust members were writing and commenting about it. Companies like Mirakl, Placewise, and VTEX have also been looking into expanding the shopping mall marketplace. The opportunity is there, but will require customer adoption (whether curbside or local ship from store delivery) and an easy way to enable retailers at these malls to jump on board. The biggest challenge is the competition with their own ecommerce for anchor tenants and drowning out of their voice by competitors in the same malls for smaller ones.

For mall providers it becomes a logistics and processing issue, so many moving parts, but overall accretive.

For retailers with unique assortments at a mall, the opportunity can offer a way to expand their ecommerce reach and capitalize further on their local presence leveraging shopping mall marketing and traffic.

It will be a mixed bag until there is broader adoption, but expect mall owners to arrange local marketplaces as part of their infrastructure.

Bob Amster
BrainTrust

I can’t wait to understand how the ills are interfacing with the different retailers’ systems to make this possible. A good move, however.

Rachelle King
BrainTrust

This is a good thing for malls, their tenants and the local community. For some consumers, the closer you live to the local mall, the less online shopping you do. This is an opportunity for those likely suburban consumers to venture into ecommerce shopping in a more controlled environment. It’s also a great opportunity for mall stores to test the omnichannel waters and potentially counter declines with in-store foot traffic.

Ecommerce may seem a deceptively easy business–on the front end. But, the real work is on the back-end: supply chain management, managing real-time inventory and fulfillment. This is where mall owners will need to step up and invest in technology and resources to enable their tenants to thrive. Otherwise, this may be a short-lived and widely disappointing experiment when it can be so much more.

Anil Patel
BrainTrust

Localized online mall marketplaces present a great opportunity, but they also come with a slew of obstacles. Legacy POS systems, inaccurate inventory, and an unwillingness to adapt are just a few of the major hurdles in this quest. Retailers have failed to overcome these issues with their own brands, therefore I’m curious how Mall of America would be able to bring together so many diverse brands on the same platform.

Tenants, in my opinion, should welcome this opportunity because it has everything nice in it. They should go beyond profit margins and broaden their horizons to realize the incredible benefits of a localized online marketplace.

wpDiscuz
Braintrust
"It's about time shopping center owners realized the need to partner with their tenants, not just lease them space."
"This is an opportunity for those likely suburban consumers to venture into ecommerce shopping in a more controlled environment."
"No matter how I try to look at this differently, it keeps coming across as another last gasp effort."

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