Originally featured on GlobeSt.com
By Natalie Dolce
The global retail real estate industry is in transition to become a combination of physical and digital marketplaces. Yet, there is a very important player that is entirely missing from this transition: the shopping center. “On average shopping centers have close to zero revenue from e-commerce today, all of it is on the tenant side,” Placewise CEO Peter Tonstad tells GlobeSt.com.
This is a significant shortfall when you consider that in 2021 13% of total retail sales in the US was e-commerce, he says. “As e-commerce grows physical retail declines, so shopping centers need to become a part of the e-commerce economy to ensure growth in the future.”
Another factor to consider is that consumers expect omni channel shopping experiences from their preferred center, Tonstad says.
One subtrend that should help facilitate the inclusion of shopping centers into e-commerce is retail’s digitalization of operations. “This is partially driven by a new generation of employees within retail expecting digital solutions, and partially by the retailers in general who have already digitized their own operations and expect the same from their shopping centers,” he says.
Retailers have become very adept with technology in other ways as well, such as customer communications, Sandy Sigal, CEO and president of NewMark Merrill Cos., tells GlobeSt.com.
“Between social networking, wifi, digital readerboards, websites, and e-mail outreach on any given week we are touching between 50,000- 100,000 potential customers a week with relevant, timely and personalized information reflective of what interests our shoppers.”
At the same time, the information retailers now know about their customers, while maintaining their individual privacy, has continued to grow, Sigal continues. And by extension the shopping center benefits.
”Where are customers come from, where they go when they are at our centers, how long they stay and who they visit, where they go when they leave the center, and how we compare to our competitors help us define who we lease to, and how we ensure our customers have a good experience when they are on site,” Sigal says. “By reviewing (electronically) thousands of individual customer reviews across over 20 review platforms (think Facebook, Yelp, Trip Advisors, etc) we can identify trends both good and bad and make sure we adjust our own customer facing personnel, as well as share that with our merchants. Technology has enabled us to better humanize the experience of our centers.”