Today’s Mall Adjusts to the Rise of eCommerce
For many, setting up shop online has become a way to ‘future-proof’ the malling business.
As people increasingly shop from the safety and comfort of their own home, brick-and-mortar malls realize it is crucial to have an e-commerce platform that allows them to sell the inventory in their stores. This reality is only amplified in instances of quarantines and shutdowns.
In the US alone, 25% of malls are projected to close within the next five years. In 2020, shopping center traffic was estimated to be down by 42% year over year, with even in-store foot traffic on Black Friday going down substantially. In contrast, merchants from e-commerce company Shopify saw total sales grow by 76% in the same year.
Even in the Philippines, malls have suffered. Retail vacancy is expected to hit 17% in 2022, the highest level ever since 2002. Even with vaccination levels rising in the country, mall foot traffic is unlikely to hit pre-pandemic levels.
The popularity of e-commerce means even luxury shopping centers are going online. For example, Miami-based Bal Harbour Shops (often cited as the fanciest mall in America) now has its own e-commerce site that lets online shoppers buy products directly from stores at the mall, either for in-person pickup, or for delivery. Even popular Filipino malls have begun offering a way to order items from physical stores and have them swiftly delivered.
In order to remain relevant, many physical malls have decided to open up online marketplaces of their own. E-commerce enablers play a big part in the transition.
Competition in the marketplace.
Yet going online is not a silver bullet solution for malls. Jumping into e-commerce has made many acutely aware of the competition it faces from dedicated e-commerce marketplaces, independent brands selling online, and social media marketplaces.
The onus is on to mall owners to come up with a way to not only offer the exact same convenience and services offered by popular online marketplaces but for there also be a way for malls to stand out to online shoppers.
The mall, reimagined.
Some mall developers have turned to e-commerce enablers to help their digital transformation. Ayala Malls, for example, partnered up with Etaily to bring its malls online.
Etaily helped Ayala Malls by offering its assistance in both fulfillment and inventory checking. With Etaily, Ayala Malls was able to guarantee that the advantage of having stock in a physical, nearby store (as opposed to a remote warehouse) is fully enjoyed by its customers. The swift fulfillment also helps Ayala Malls stand out from e-commerce marketplaces where delivery takes a few days at best.