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Shopping malls going digital in e-commerce era

The rise of e-commerce has led the segment to carve out a sizable share of the global retail market. The increasing penetration of smartphones and access to data services across emerging markets has helped sustain e-commerce growth, introducing an ever-growing consumer base to online retail.

Traditional brick-and-mortar retailers, which have witnessed a slide in revenue, are now experimenting with different sales channels — including dipping into e-commerce for improving their customer reach. 

The “Amazon Effect” has revamped traditional logistics workflows, putting end customers at the center of supply chains and forcing stakeholders to expedite operations to guarantee same-day or next-day delivery. With last-mile delivery becoming the new avenue to differentiate services, online retailers look at various means to deliver products, including drones and automated delivery robots. 

The advantage retail storefronts have in fulfilling deliveries in the last-mile segment cannot be overlooked. For instance, a local supermarket with an online presence can promise delivery to any customer in the neighborhood within an hour. Amazon, with its logistical prowess, might still struggle with delivering in such short notice as it needs to get the products to its customers from a warehouse, possibly located in the city outskirts. 

With the COVID-19 pandemic impacting storefront foot traffic considerably, shopping malls are now moving online to sandwich themselves in the space of same-day last-mile delivery and click-and-collect delivery models. 

Citycon, a real estate firm that operates shopping malls across the Nordic countries and Estonia, has built a click-and-collect service that allows consumers to buy products listed across all the shops within a specific mall. To make this happen, Citycon aggregated all shops under a single digital platform, giving the site product variety and volume. 

Citycon CEO Scott Ball said the model gives the company a real opportunity to become a “last-mile delivery answer” by leveraging strategically placed real estate to fulfill orders in quick time. But Citycon still has had problems bringing all the retailers operating within its shopping malls into the virtual system, which Ball anticipated would take around a year. 

Shopping malls with vacant spaces can repurpose them and rent them out as fulfillment centers for companies like Amazon, giving them steady revenue. Parking spaces within malls can be rented out to park autonomous robots and last-mile electric vehicles, with possibilities of them acting as overnight docking stations.

Retail storefronts within malls can be used to create buying experiences that fuse physical spaces with digital shopping. Amazon introduced a chain of physical stores called Amazon Go, where buyers can get into the store, pick up a few products and walk out of the store without waiting on checkout queues. Amazon uses computer vision to recognize the products picked by consumers and directly charges them on the cards registered with their Amazon accounts. 

Ultimately, the retail market is evolving and e-commerce is here to stay. For shopping malls to survive, it is inevitable that they climb the digitalization ladder for new sales and distribution channels. Fusing physical and digital elements of the buying experience will not just help large retailers but also low-margin businesses that struggle with visibility or consumer retention.


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