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The bet is that a digital marketplace will lure shoppers back to the mall
People pass by a large Christmas tree while shopping at a mall in Ottawa on Christmas Eve in 2020. Photo by Justin Tang/The Canadian Press files
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The internet hasn’t killed the mall like many would have expected during the pandemic, but owners of some of Canada’s largest retail spaces are taking no chances.
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Oxford Properties Group Inc. and Primaris Real Estate Investment Trust have both created their own online shopping platforms that reflect some of their physical properties. The bet is that a digital marketplace akin to Amazon will lure shoppers back to the mall, particularly those jaded by the crowded galleries and long checkout lines.
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Part of the thinking is that online shopping is now the norm, not a throwback, said Lucia Connor, vice president of marketing at Oxford Properties, the real estate arm of the Ontario Municipal Employees’ Retirement System pension fund. The government’s stay-at-home orders during the pandemic have meant retail tenants and landlords have had to adjust, for example by offering curbside pickup at malls, to keep revenue flowing.
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As a result, most retailers have embraced e-commerce, and that’s forcing the commercial real estate companies that host their brick-and-mortar stores to keep up.
“We rent space. We don’t normally sell products – our retailers do,” Connor said. “But we can influence where people shop so we can improve the experience.”
In late November, Oxford launched StyList, a digital service the company is piloting at its two largest malls, Yorkdale Shopping Center in Toronto and Square One Shopping Center in Mississauga, Ontario. The properties are considered two of Canada’s largest shopping centers and feature luxury retailers such as Holt Renfrew and Burberry, as well as mid-range retailers such as H&M.
StyList links to the search facility on Yorkdale’s and Square One’s respective websites, allowing shoppers to search for products from the mall’s retail tenants. Shoppers can then add a variety of products from different stores into a single virtual shopping cart and pay for everything at a single checkout on the mall’s website.
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We can influence where people shop so we can improve the experience
Lucy Connor
There is one caveat though: there is no option for delivery on StyList, only curbside or mall pickup.
Shoppers can use StyList to search inventory for the items they want and plan their trip accordingly, or they can buy what they want online and pick it up at the guest services desk or parking lot. Oxford is betting customers will be tempted to head inside and use the time saved by checking off their shopping lists to shop around.
“By saving all that time where (customers) would be wandering around, they could actually reinvest some of their time that they would spend at the mall and maybe go to a restaurant or go to the movies or have the other experiences that it.” are in the mall,” said Connor.
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“This was a unique opportunity for our centers to fit into the customer journey where we would not normally be able to.”
The advent of e-commerce has been a real challenge for retailers
Alex Avery
StyList and similar platforms came out of a turbulent time for retailers, which were already uneasy about the influence of Amazon.com Inc. and Shopify Inc. before the pandemic forced most commerce online. Between 2012 and 2021, e-commerce sales nearly quadrupled, and from 2019 to last year, online sales grew about 30 percent, according to Statistics Canada.
“The advent of e-commerce has been a real challenge for retailers,” said Alex Avery, CEO of Primaris REIT.
Shoppers at the Eaton Center mall in downtown Toronto in 2020. Photo by Chris Helgren/Reuters/File Photo
“The first few days of this experience were quite disappointing. If you don’t know what you’re doing, you often make mistakes. It’s not a criticism, it was that it was new skills and a new environment and things were developing and changing quickly.”
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Just having a well-designed website doesn’t guarantee a company’s success in the Internet race, Avery said. Before COVID-19, companies venturing online were just beginning to smooth out the kinks of the virtual shopping experience, such as: B. Refining logistics from factories to doorstep to offer same-day delivery.
But now retail store lessors are in the process of recouping losses from the past two years and are nearing pre-pandemic levels on some metrics. RioCan REIT, one of the largest owners of residential and retail real estate, said in its latest quarterly results that committed occupancy improved for the sixth straight quarter, returning to 97.2 percent of pre-pandemic levels.
The first days of this experience were quite disappointing
Alex Avery
Those committed to brick-and-mortar retail need to put a special focus on bridging the digital divide to remain profitable, said Tony Hernandez, director at Toronto Metropolitan University’s Center for the Study of Commercial Activity.
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Real estate companies testing different versions of virtual malls is one of the ways landlords try to find the optimal balance between online and offline shopping.
“It’s not about online versus offline per se, but how online can support brick-and-mortar retail and how brick-and-mortar retail serves online presence,” Hernandez said via email.
Primaris launched its online platform in November 2021. Primarché is a digital marketplace and website that offers products from retailers in Primaris’ 12 shopping centers across Canada, including Dufferin Mall in Toronto, Sunridge Mall in Calgary and the Kildonan Place in Winnipeg.
Primarché offers pickup options and free delivery. For example, an online shopper in Calgary can order items from a seller in Dufferin Mall that they cannot find in Sunridge Mall, for example.
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It’s a way of “liberating” inventory as malls transform into “perfect distribution centers,” said Karin Cabili, managing director of DropIt Shopping Ltd., the British software company that helped Primaris build its e-commerce marketplace. “It’s not just available to anyone who comes into the mall.”
However, the best way malls can survive this difficult environment is through a “strong” tenant mix, Hernandez said. “For large malls, this means ensuring your tenant mix includes trendy fashion retailers from around the world through to best-in-class food concepts.”
And with the looming recession, it’s even more important that landlords curate a shopping experience that resonates with customers and strikes the right balance between offline and online.
“Incorporating more experiential elements and programs such as pop-up stores, art, media, cultural exhibits and other community-focused events will enhance the mall as a destination,” said Hernandez.
• Email: [email protected] | Twitter: biancabharti
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