Marketplace2.0
Shopping Centres have always been marketplaces in the physical world, with the first mention of "Digital Malls" dating back to the early 2000’s. Despite the passing of 20 years since the concept was introduced, there are no true Digital Malls live anywhere in the world today, 2020 however has seen the long-term vision of shopping centres as fully integrated digital marketplaces finally begin to materialise.
This gap between vision to realization is in no way unique to the shopping centre industry. Many digital ideas created at the beginning of the millennium have still to be fully realized. The Shopping Centre industry has been testing and launching many pieces of the Digital Mall puzzle, but for those who understand the power of combining physical and digital retail to outperform either disconnected alternative, the next few years will be critical to truly becoming online Marketplaces.
We currently see those centres having already begun the evolution toward a full digitally integrated Marketplace, fall into one of the following categories:
1. Generic Product Search & Affiliate Links
The product content is provided to inspire purchases, and is typically based on scraping of retailer websites, Google shopping feeds or similar. Links from products lead to the retailer’s e-commerce pages where product may be purchased. If an affiliate agreement with the retailer is in place, when a consumer on the shopping centre’s website searches for and clicks through to a retailer website the shopping centre receives a"finders", or affiliate fee typically in the range of 3 to 10% of the purchase total.
2. Curated Products
A team at the shopping centre will select a certain number of products from their retail tenants to feature on the shopping centre website. Typically the product selection is between 100 to 1000 products. Upon the consumer placing an order of one or multiple products, from one or several retailers, the shopping centre team will facilitate the collection of the items from the stores, arrange for centralized pick up or home delivery, and facilitate settlement between consumer, mall and retailer.
3. Fully Integrated Digital Marketplace
There are three main challenges to shopping centres becoming fully integrated marketplaces:
1) Complete product information with store level inventory data by location
2) Fulfillment and settlement of a multi retail tenant basket including returns
3) Fulfillment (Pick-up & Delivery).
At Placewise we are working through these challenges together with our clients and their tenants, and by the end of Q1 this year we will launch what we believe is the world's first complete e-commerce integrated, shopping centre marketplace.
Our solution includes the following:
- Product feed integrations including store level inventory data from at least 50 % of all shopping centre tenants
- An end-to-end marketplace platform with multi-retailer basket and check out
- A selection of global and local payment options, with settlement between consumers and shopping centre, and secondly between shopping centre and tenants
- Mall fulfillment service for bundling orders for pick-up and delivery, and management of returns
The value proposition to the consumer is convenience, for the tenants it's incremental sales. The core of driving consumers to this offering is the malls current consumer database. This particular group of malls has a digital reach of more than 50% of their footfall in the physical mall. The database in combination with organic web traffic and paid traffic will create a very attractive shopper funnel for all tenants involved.
Our target for our respective clients is to deliver10% of all sales at the shopping centre through the digital marketplace within 3 years. When that is achieved the shopping centres are perfectly positioned for the long-term future by leveraging their local position and consumer and retailer relationships, to create an optimal combination of online and on location shopping experience. We can`t wait to see that happen.