By Peter Tonstad, Placewise CEO
More and more people in the retail real estate industry believe most shopping centers will be a combination of digital and physical marketplaces in the not too distant future. At Placewise, this strategic view is at the core of our innovation projects, all fully integrated with our CRM, mall marketing automation and customer engagement solutions made especially for the retail real estate industry.
Our vision and definition of a fully integrated digital marketplace for shopping centers is that all products within a shopping centre are available for online purchase in one unified marketplace, with local store inventory data, one cross retailer cart and payment, and the bundled purchase is available for in centre pick up or delivery.
This full scope was recently launched in a beta version at a shopping centre in Norway, and to our knowledge is the first of its kind globally. Overall the scope is very ambitious and not without challenges.
The following are what we regard to be the main hurdles to overcome when launching a fully integrated marketplace for a shopping center:
1. E-commerce platform
Our early assumption was that we could integrate our overall tech stack to an existing e-commerce or marketplace platform and be good to go. After evaluating the market, we quickly discovered there was no platform available in the market that could meet the unique needs of a shopping centre marketplace. When analyzing the entire customer journey we identified that using an existing cart and storefront still required us to develop a substantial mid layer to deliver features like; bundled centralized pickup vs in store, split order confirmation to respective retailers, partial order returns and fulfilment management between the shopping center and retailers.
2. Product and inventory data
Getting access to retailer product and inventory data has been the overall biggest challenge in any shopping centre e-commerce related effort. On a general basis the quality of the product and inventory data varies a lot from retailer to retailer. The source of data is very often an existing retailer specific e-commerce platform where the need for location-based inventory data is of less importance but is imperative when linked to a physical retail location.
As retailers in general are becoming more open to selling through third parties online, the commercial interest for a shopping centre online marketplace from tenants is high. It is the technical access to the product data that adds to the timeline. And as soon as access is in place the work begins with ingesting and unifying data on thousands of products. Typically, there are as many data format variances as there are retailers involved in the project.
3. In store fulfilment
Ideally the shopping center marketplace has two-way point of sales integration with all the retailers. For several reasons that is an unrealistic ambition, for some it is doable but for many it is not an option at all. That then means there is a need for a second screen solution for distributing orders from the marketplace to the retailers, and order confirmation from retailer to marketplace. This flow then has to be connected to the centralized shopping centre fulfilment service and theshoppers. This workflow is unique to shopping centers, so it had to be built for the industry.
4. Shopper engagement
A shopping centre online marketplace offers shoppers the convenience of combining online and in store shopping, cross retailer check-out and cross retailer pick up or delivery. It also offers attractive solutions for managing returns and exchanges. Having said that, a new shopping centre marketplace has to compete with all other existing online marketplaces. So, marketing assets and budgets are required to create the wanted funnel. If your shopping centre already has a consumer database from current digital offerings that would be your best starting point to also recruit online shoppers. In any case changing consumer behaviour is not done overnight, so long term strategies are needed, in combination with some realistic expectations.
The above are in short what we believe to be the four most important hurdles to overcome to create a fully-integrated shopping centre marketplace, and there are several others that could be added to the list. Being first at anything is never easy, but the potential of marketplaces to transform the retail real estate industry is tremendous.
For digital marketplaces to be an industry wide success high level of engagement from all involved parties is needed. The more shopping centers that embark on this venture early the more everyone will gain over time. It is not a case of being able to wait and see what others are doing, because it is the collective industry effort that will give your shopping centre access to the needed retailer product data.
We are placing our bets on the future of shopping centers as digital marketplaces and we hope you will as well.