April 11th, 2014 Posted by news No Comment yet

There is a popular belief among the general public that malls and brick and mortar stores, more generally, are slowly dying off due to increased competition from the massive and ever-expanding e-commerce space. The truth lies somewhere in between. Yes, there is serious competition from e-commerce and yes it is becoming harder to attract the same amount of customers to brick and mortar stores that was once expected, but there is also a massive opportunity to innovate; it is a Darwinian dilemma for retailers, they must adapt in order to survive. Mega malls are on the rise and mid level, ‘B’ malls will most likely die out and give way to these larger, Mall of America modeled retail giants. These malls understand however that even they must look to the future and provide both high-level digital accessibility and an experience that transcends the simple exchange of cash for goods.

During the 4th quarter of 2013 only 6% of all U.S. retail sales occurred online, a promising figure for brick and mortar stores. However these numbers will obviously increase with time and the retail industry needs to be prepared. In order to combat the intrusion of e-commerce, many malls are trying to provide a unique experience that is ancillary to the actual, physical act of shopping. Movie theatres, amusement parks and even quaint, Main Street like layouts are common place at many of the top mega malls. The mall of the future must also cater specifically to mobile, and many big chains are already tackling this issue and adopting a mobile first philosophy. The digital storefront is now a popular way for brick and mortar retailers to bridge the gap between their online commerce and physical store locations.

In San Francisco, Westfield has already set up a high-end digital storefront operation, thanks to the partnership of Westfield Labs and eBay’s VP of Innovation and New Ventures. These storefronts offer the combination of the physical mall experience with the ease of online shopping. In some cases giant tablets set up by brands allow consumers to scroll through pictures of products and then press “order,” providing a seamless connection to their mobile device where payment via Paypal or credit/debit card will occur. After purchase delivery, often both same day and free will occur, either right to the consumer’s door or at a convenient pick-up point.  Many of these malls are allowing retailers to include both a physical, traditional store and a digital operation.  These digital first storefronts allow retailers to fill up empty mall space, while expanding brand presence with a vertical shopping experience. As an added bonus, the connected glass technology does not require a square footage retail space, as a result, these storefronts provide the heavy consumer foot traffic without elevated expense.

At this stage, it is difficult to say whether these digital storefronts will be the ultimate bridge between retail and mobile, or if they are merely a temporary fix and a passing fad. It is clear, however, that mobile is the new gateway to the consumer and must be leveraged, in order for retailers to survive.

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