By Peter Tonstad
No one has a crystal ball and can predict all the ways in which the Covid-19 pandemic will impact the retail or shopping center industries, or how long it will be before we are looking at the crisis from the other side. As tenants and malls are shutting down in many parts of the world, it is clear there will be serious financial consequences. How long will the closures last? How deep will the losses be? What long term impact on shopping centers and consumer behavior might we see from COVID-19?If history is an indication of the future, consumers, having been in home isolation, will enthusiastically return to the mall to shop, dine, and be entertained. But what about their increased reliance on online shopping during isolation? Is it reasonable to assume shoppers will maintain their increased level of online spending after the crisis too?
We know there is a lot of unexplored potential that exists between physical malls and online shopping. Malls with large virtual communities, and rich digital relationships with their shoppers, have the potential to be powerful business partners to their tenants delivering footfall and sales. The larger the mall’s consumer database, the more potential to positively impact tenant sales, the more powerful a partner they become. What about the value of a center’s consumer database to pure play ecommerce retailers, merchants who don’t have any physical stores at all?
There is also a real opportunity for malls to become the preferred locations for pick up and returns from online purchases. Envision a very attractive pick up lounge where you get your delivery handed over from a bundle of stores and brands. Or put straight into your car boot while you are dining or doing other shopping. With nice changing facilities consumers can immediately decide on items they will return or keep. All online vendors suffer from increasing volumes of returns, being as high as 50 % for some retailers, and no retailer is gaining profits from last mile deliveries. After years of maintaining an “us” or “them” position between brick & mortar and online retail, are we ready to further embrace the combination like shoppers have?
Post the current crisis every business will now need to have plans good to go if the current virus, or other, return in a year or later. What have we learned that will help us to better position ourselves to serve our communities in the event of a future similar crisis? For shopping malls, it is clear: actively cultivate digital relationships with consumers, and strive to grow the percentage of trade area shoppers in the database. The benefits of this endeavor are threefold: Firstly, it will enable direct communication through every digital channel available with the greatest number of consumers possible. Secondly, it will improve the efficient procurement and distribution of goods during a crisis. And thirdly, it will put shopping malls on a path of digital evolution, and the personalized experience the modern shopper wants.
