E-Commerce vs. Traditional Commerce Series, Part 2

STRATEGIES SHOPPING MALLS ARE USING TO COMBAT E-COMMERCE

In part one of the e-commerce series, we discussed the strategies web-based businesses are using to win over clients from brick-and-mortar stores. In part two of this series, we will talk about the techniques that shopping malls are using to combat the rise of online retail. E-commerce has the potential to reduce traditional stores and malls’ revenues by offering a number of conveniences, such as the ability to buy from virtually anywhere, exclusive discounts, and same-day shipping. Mall developers have responded to this trend by building “lifestyle centers,” creating a novel experience, and participating in e-commerce themselves, among other strategies.   

Strategies

1. Building “lifestyle centers” instead of traditional shopping centers

A traditional vision of a shopping mall is of a huge, windowless building with multiple anchor stores and smaller stores on at least two levels. These are called regional centers or super-regional centers. Nowadays, the trend is changing in favor of what are termed as “lifestyle centers.” These upscale, open-air shopping centers often feature lush landscapes, waterfalls, and public spaces (dog parks, seating areas, public squares, stage, etc.) for a convivial atmosphere. The idea of a lifestyle center is to create a meeting place or village center with events for locals and shoppers. Ways of doing this is having a weekly Farmer’s Market or having bands play on a stage. Examples of lifestyle centers in Los Angeles County include 3rd Street Promenade, The Grove and Americana at Brand.

2. Creating an experience

By constructing lifestyle centers, developers hope that it will draw visitors and have an experience they cannot replicate online. This means having to attract tenants such as restaurants, hair salons and movie theaters. Of course, the goal of attracting more clients does not stop with shop owners. It happens way before they move in for business. Mall developers must also design the mall in an aesthetically pleasing way and install features and coordinate events that will become a draw. As mentioned previously, this could include having a Farmer’s Market, ferris wheel or dog park. The goal is to create an innovative shopping destination where guests can shop, eat, play and socialize with their loved ones.  

3. Participating in e-commerce themselves

Shopping malls are using e-commerce themselves as a way to drive customers to their stores. SmartCentres Inc., one of the top mall investors in Canada, is testing out pick-up stations at three of its centers, enabling online shoppers to obtain items purchased electronically. The program, called Penguin Pick-Up, hopes not only for shoppers to pick up online items and leave, but also to inspire them to visit the brick-and-mortar shops adjacent to the pick-up location.

Westfield is also testing out a similar program at its two London malls. Once at the mall, apparel shoppers can try their clothes to see if they fit. In the U.S., the global mall developer is experimenting with same-day delivery in its shopping centers. Mall developers are also creating shopping apps and offering online deals.

These are only several avenues that malls are taking to convince that traditional shopping (in-person) is a better option versus e-commerce. While online shopping promises convenience (ability to purchase from anywhere and fast shipping options), mall developers hope to draw shoppers away by giving them a pleasant experience they cannot find on the Internet.

To read part one of the e-commerce series ("How Online Retailers Are Winning You Over From Brick and Mortar Stores"), click here.