The death of the mall has been much foretold. Now that people are shopping online and don’t need to leave the comfort of their homes, we’re told, consumers never need to venture out to a shop.
There are many things wrong with that assumption, but it’s true that peoples’ new techno-centric lifestyles have hurt traditional shops and malls. So they are fighting back, with help from an unlikely source: The technology that robbed them of business in the first place.
According to a slew of recent reports, shopping centers and brands are busy exploring ways that technology can improve their products and lure customers in an increasingly complex world of multichannel offerings.
“Today people seamlessly glide between their physical and virtual worlds. Customers are shopping and browsing and informing themselves on the go and they expect the same from retailers,” wrote the authors of “Retail’s Digital Future,” a comprehensive report published by the British Council for Shopping Centres and the law firm Addleshaw Goddard.
The report highlights emerging technology trends, such as the use of beacons that interact with shoppers’ phones and guide them through the center, augmented reality “magic mirrors” in changing rooms, e-wallets and 3-D printing, which retailers hope will rekindle consumers’ love of physical stores.
One major innovation that is expected to help retailers is the growth of interactive mapping.
“When combined with analytics and precise positioning, an indoor map can change the game for physical retailers,” said Joseph Leigh, head of Venue maps at the Nokia mapping company Here. Leigh pointed out that the ubiquity of smartphones and technology in cars has helped gather data to improve urban planning. “With everyone carrying a smartphone, the same revolution can happen in retail, though this time it will be shop planners and merchandise managers who can benefit,” he said.
Macy’s was an early innovator, installing indoor GPS navigation in its New York flagship two years ago. British-based John Lewis had its London flagship fully mapped by Google Street View last year.
Mobile apps using mapping technologies are now beginning to take hold in the U.S. retail market. This technology has the potential to integrate whole systems, including stock inventory, voucher schemes and personalized recommendations, as is now the case online.
This is key, since whatever way the technology is used, the basic premise of the brave new world of shopping is the merging of bricks and mortar and online — the so-called omnichannel approach, so customers can shop online and pick up in store or try on in store and have products home-delivered. These activities even have their own names — webrooming, for the former, and showrooming for the latter.
“We find that people shop more [online] when we have a store in their neighborhood,” said Macy’s chief financial officer Karen Hoguet, in a report by the International Council of Shopping Centers. “So, if we were to close this store, we not only lose the store sales, we also often lose [online sales] and we’re also finding customers like the convenience to come into the store, look at it, make returns. So, interestingly the Internet is actually making some stores stronger.”
Luxury-goods brands have much to gain through the use of technology — particularly as the easy ride boosted by the fast growth of emerging markets comes to an end — and Burberry is regularly cited as a major innovator. So committed is it to the idea that online and in-store sales aren’t broken out in its annual report.
Burberry was named a leader in luxury-goods e-tail in the Digital Competitive Map released by Exane BNP Paribas, for the reach and depth of its e-commerce.
“We continue to expect above-average top-line growth at companies like Burberry and — increasingly — Richemont, on the back of digital engagement forays,” the report said. It quotes an unnamed luxury chief executive officer comparing the view that e-commerce is not needed because customers can go to shops to the Seventies view that shops abroad were not needed because customers could travel to Paris. “How wise was that? Not very wise,” said Luca Solca, one of the authors of the report.
Other leading brands at the digital lead table include Balenciaga, Armani, Louis Vuitton, Coach and Ralph Lauren, while Gucci and Tiffany score high for e-customer experience but lower in terms of strategic reach. Lagging behind was Céline, whose creative director Phoebe Philo was once quoted as saying she would rather walk down the street naked than join Facebook.
Burberry’s approach is evident in its stores. Black-clad staff with earpieces and iPads stalk the departments. They help combine physical shopping with online, even making recommendations based on a customer’s online profile. In the changing rooms, shoppers can wave certain products at a magic mirror and see them go down the runway. In some stores, such as the Burberry Beauty Box, a consumer can place, say, nail varnish above a special screen, to see it painted on a hand, with the appropriate skin tone selected. The label live-streams its shows and allows viewers to order certain looks from the catwalk. These clothes reach the client in six weeks rather than the usual six months it takes for the runway collection to reach the stores. Runway makeup looks can be bought by the fashion twitterati without even leaving Twitter. Burberry also has a “What If Group” to ponder issues such as whether to put chips into accessories.
Interestingly, the ICSC report said that, contrary to the impression of a world turned increasingly virtual, 78 percent of shoppers in the U.S. preferred to shop in stores. People were more likely to shop when visiting an “offline” store and the chances for returns were lower. This idea was backed up by the increasing presence of online retailers in real stores rather than an abstract digital presence — names such as Athleta, Bonobos and Warby Parker.
What is important for the new generation, which has grown up with smartphones and thinks nothing of texting a person sitting opposite them, is that physical shopping offers the convenience of online. And online aficionados expect smooth navigation, no queues, the ability to customize and a bespoke service.
Navigation is helped by mapping services and other innovations such as Dubai Mall’s scheme to help shoppers find the cars they have lost in labyrinthine car parks. The development of pay schemes such as Apple Pay and Square, and the battle to own the e-wallet point to a future when people may shop without taking their phones out of their pockets. That could further cut queues, as could the use of augmented reality that allows shoppers to scan food court menus and then order while they shop.
Technology can also help improve the changing-room experience. Intel is developing a magic mirror that will allow a customer to virtually try on an outfit without the time and hassle of undressing. Maturing 3-D body-scanning technology — as developed by Bodymetrics and trialed by Selfridges — ensures customers can get an accurate impression of fit as well as the look of the worn garment. Similarly, Sephora and ModiFace developed a 3-D augmented-reality makeup and antiaging mirror that can simulate cosmetics on a user’s face.
While online shopping has become a practical, fast solution for people who know what they want and don’t want to spend any time acquiring it, the mall has become a showcase and an experience, a destination — offering things consumers can’t find online and to fill the time freed by a more streamlined shopping experience.
And it needs to. While the shopping mall is far from dead — the ICSC says that 94 percent of all purchases are still made in real stores — the numerous stories that come up on a simple Google search for “Death of the American Mall” suggest trouble, especially for centers outside major metropolitan areas.
Some of the ideas embraced by retailers and landlords are practical and offline, such as diversifying the makeup of the shopping mall to include fitness and entertainment centers as well as hairdressers and doctors. The idea of Hispanic malls has also taken off — offering a traditional family market environment in a mall setting. Zorlu Centre, a flashy new mall in Istanbul, has worked hard to make the space look like anything but a mall — with landscaped green spaces and a piazza style entrance.
While on the surface consumers are seen benefiting from an increasingly tailored experience, many of the technological innovations can have huge benefits for retailers and landlords. The amount of data collected — without even the need for loyalty cards — can help them design better malls and develop products attuned to the latest in consumers’ tastes, further bolstering the appeal of the brick-and-mortar store.