Part 1: Competition from Online Shopping. The increasing migration of consumers to online shopping will continue to represent a significant challenge to shopping centre marketers in 2015. According to eMarketer, e-commerce sales growth increased 14.2% in Canada in 2013, with a similar level of growth projected for 2014. While e-commerce made up just 4.5% of total Canadian retail sales last year, by 2018 this percentage is projected to jump to 8.2%, or $43.95 billion. Shopping centres have been traditionally slow to embrace online as part of the purchase decision, but the urgency to embrace new strategies to service and compete with online retail is clear.
Here are two strategies that can help shopping centres play a more profitable role in the online shopping arena.
1. Provide convenient, online shopping fulfillment.
Click-and-Collect shopping is a hybrid between traditional bricks-and-mortar shopping and online buying. Consumers order products online, then pick them up at a store or other physical location. This new way of shopping has been quickly gaining in popularity, particularly in the U.K. and France, and offers an interesting way for shopping malls to become part of the online shopping fulfillment channel.
The process is very simple. The consumer buys something online. Then, rather than stress about not being home when the parcel is delivered, or worry about it being stolen or weather damaged, the customer goes to a store or pickup location to collect the parcel. Delivery charges are generally cheaper than if it was home delivered, or even waived.
Intu Properties owns or partially owns 16 shopping centres in the UK, including the UK’s first multichannel transactional shopping centre, intu.co.uk. Shoppers can purchase from different retailers on one website and pick-up their purchases at one of 11 Intu shopping centres.
Clearly Intu has made a big investment in this program, but click-and-collect services can also be provided on a smaller scale. Smart Centres, Canada’s largest developer and operator of unenclosed shopping centres, will be testing online purchase stations, branded as “Penguin Pick-Up” after its corporate logo, at three of its Toronto-area shopping centres in the next three to six months. Smart Centres’ primary goal is to increase traffic to its centres.
Another way of offering inexpensive click-and-collect services is via “locker bank terminals.” Companies like InPost sell and install these terminals, comprised of between 47 and 72 individual compartments, where online parcels can be delivered to easily accessible locations like shopping centres. Locker banks can help in increasing mall traffic and can also contribute to increased revenue as an advertising space.
2. Promote a Blended Experience to Shoppers
The consumer shopping path is now a blended experience; there is no longer a clear distinction between online and offline shopping. For example, a customer goes to a store, finds that the product they are looking for is out of stock, and uses an in-store terminal to have another location ship it to her home. Or a customer can be shopping in one store, use their smartphone to find a lower price at another store, and then order it electronically for in-store pickup.
Shoppers use the shopping method that suits them best—whether it is via mobile, tablet, or in store. What’s important for shopping centre marketers, is to make sure that their customers are aware of the various channels, both online and offline, that are available to them while they are shopping at a centre. Let customers know which retailers in your mall offer online shopping within their store. Which ones will exchange online orders. Where online orders can be picked up Place your mall in the center of your customer’s shopping world, both online and offline, and you’ll keep them coming back.
Photo source: www.retail-week.com