Page 32 - #184 September 2023

RLI RETAIL INSIGHT

The Mall of the Future

In this month’s Retail Insight, Kyle Spencer, Co-Founder of NextRivet takes some time
out to look into how mall operators are revitalising their spaces to accommodate changing
consumer demands.

he Covid-19 pandemic caused dramatic changes to all aspects It’s also about blending in-person shopping with e-commerce
of our lives; from how we travel to how we shop. As a result, Not only do customers want to use malls for entertainment, but also
Tthe retail industry experienced an identity crisis. People turned to assist in their online shopping experience. Mall operators can engage
to online shopping first out of necessity, but we soon found ourselves potential customers by offering local pickup options. Online shoppers
growing accustomed to the ease of same or next-day delivery. who choose local pickup at checkout were 13 per cent more likely to
The rapid growth in e-commerce driven by the pandemic greatly complete their online purchase and spent at least 23 per cent more
improved logistics networks, as near-instantaneous delivery shifted from than customers who opted to have their order shipped, according to
a far-off daydream to an actual reality. With retail giants such as Amazon a study by Shopify. This means that mall operators need to have the
and Walmart growing their delivery logistics, consumer expectations infrastructure to accommodate new ways of shopping, as retailers will
grew with them. This is seen in the ‘Last Mile Delivery Expectations for be looking for this when considering potential leases.
2023’ Forbes article, which found that 90 per cent of global consumers Additionally, technology integration can help mall operators merge
expect two- or three-day shipping to be standard and 32 per cent of in-person and digital retail. One example of this is unifying in-store and
respondents would abandon their carts to buy from another store if online shopping through omni-channel. Retailers around the globe are
delivery or collection of their item was predicted to be too long. investing in options to support all areas of their fulfilment chain. By
Following the end of the pandemic, the world changed again. Instead incorporating the right technology and investment, retailers are able
of a return to the normal we were used to pre-2020, we saw consumers to offer consumer-friendly solutions with acronyms sounding like a bad
now demanding a mix of in-person and online shopping. This has caused sitcom like BOPIS (buy online, pick-up-in-store), BOSS (buy online, ship-
a new challenge for retailers, as they struggle to fulfill online orders whilst from-store and BORIS (buy online, return-in-store).
also maintaining an in-person location for customers to see products. Where do mall operators come into this? As retailers look to strike
For retail property owners, the rise of e-commerce is not necessarily a balance between physical innovation and e-commerce, mall operators
a bad thing. Consumers are not looking to only shop online, so mall have an opportunity to shift their spaces to provide retailers with the
operators must consider how to best manage the blend of in-person functions they need to keep their customers happy. Mall operators
and digital retail. can revitalise unused space into micro-fulfilment centres, create the
infrastructure for curbside pickup and provide entertainment options to
It is more than just a shopping centre now drive foot traffic. All of these make them a competitive choice when
Mall visitation numbers increased by 19 per cent from 2021 to 2022, retailers are searching for in-person locations. It also has the potential to
according to research by Near. The report considered that, despite drive digitally native brands to physical locations.
economic instability, certain features in some malls made them more The demand for e-commerce has not made the mall obsolete, but
attractive to consumers, even if there was another mall closer. instead, has led to calls for a seamless experience of online to in-person
This is because malls are turning into lifestyle centres. Consumers shopping. Perfecting that blend through technology and innovation is
will flock to malls for various reasons, one of which is seeing physical the hard part. Our work at NextRivet, turning theoretical innovation
products prior to purchasing. But, the draw for that is not big enough concepts into results-driven initiatives for our clients, has enabled us to
on its own. Malls are transforming to become destinations, not outdated see the benefits of mall operators supporting retailers as they look to
merchandise centres. capitalise on changing consumer demands. It has also been made clear to
Mall operators are trying to lure digitally native brands to physical us that the mall is not dead, it is just changing.
retail by exploring what actually drives consumers to shop in person.
Vienna-based Waterdrop, a company selling water bottles and flavour
cubes, currently sells in 10 European markets, including the UK and has
now expanded to the US.
Waterdrop is a great example of modern retailer demands. As they
expand into the US they are testing the “proverbial waters” by launching
a website for e-commerce, alongside mall-based kiosks across various
markets. At their in-person locations, consumers can see the product
and try a selection of beverages. This helps build a community, while also
giving potential customers a look and taste of the product.
In-person shopping is not dead; it just serves a new purpose. Brands
want smaller locations that allow them to create a more experience-
based sales process. This means that malls must operate as entertainment
hubs and destinations in order to attract consumers.
There are quite a few examples across the UK of malls emphasising
entertainment alongside traditional retail. Since London’s Battersea
Power Station opened to the public in October 2022, the ‘mall’ has since
been frequented by over five million visitors. In an effort to connect with
the contemporary visitor, Battersea Power Station has gone above and
beyond to turn the disused historical building into a mall that combines
retail space with entertainment. Housing multiple popular high-street
stores with a cinema, the space also features a futuristic viewing point
(Lift 109), and a ping-pong bar opening soon.
By innovating in-line with modern expectations, the space has been
created for visits on weekends, morning coffee breaks and social
gatherings alike. This is the future; balancing e-commerce with physical
experiences that draw people back to the malls.

32 RETAIL & LEISURE INTERNATIONAL SEPTEMBER 2023