Can the digital revolution rescue in-store shopping?

by Mackenzie Kearnan | Mar 31, 2015

When the Rolling Acres Mall opened in August 1975, it was the talk of Akron, Ohio. On Saturday mornings, residents  citywide would flock to the popular social hub. But after years of financial struggle, the mall began shutting in October 2008, with just two department stores left in business. The last store, J. C. Penney, closed five years later. Once a symbol of the American dream, the building complex now stands deserted.

Its fate is all too typical. For the past decade, news media in North America have chronicled the slow deaths of bricks-and-mortar shopping centres, versus the rising tide of online retail and portable technology.

Due mainly to e-commerce, the future of shopping malls is uncertain, says Ian Lee, assistant professor at Carleton University’s Sprott School of Business. He speculates that they will vanish completely in 50 to 100 years: “People will look at them with the same sense of wonder as we look at the cathedrals. ‘Once upon a time, everyone went there on a Saturday morning, wow.’”

Yet the International Council of Shopping Centers (ICSC) says that media forecasts of the shopping mall’s extinction are distorted. The news doesn’t always paint a complete picture, explains Jesse Tron, spokesperson and communications director for ICSC: “It’s extremely overblown, and it is a bit sensationalized.” Tron says that shopping malls tend to fail because of demographic and economic issues in the neighbourhood, not lack of interest in in-store shopping.  He says e-commerce can never replace the full in-store advantages.

In fact, some experts argue that digital technology, while obviously competing with bricks-and-mortar stores, could also be harnessed to keep those same stores in business—mainly by attracting customers into the physical store. Features such as phone apps could actually be the saviour of malls and other retailers. The reason: Corporate vendors now have the ability to gather and sort vast amounts of customer information, making it easier to target consumers, and also the ability to send information easily and instantly to customers, offering them incentives and helping them to navigate the in-store inventory.

And that’s exactly what malls and retailers are trying to do. By offering information and deals to specific customers, they can improve the in-store shopping experience, says professor Lee.

A hybrid shopping experience

Today’s malls hope to increase foot traffic by creating a two-faceted experience, one that allows shoppers to interact with products in store while still giving the perks of online shopping. Effort is being made to get people out of the house and into the mall, explains Chris Carder, co-founder of Kinetic Café, a Toronto-based innovation firm that helps companies, including shopping centres, overcome obstacles in product services and customer experiences. “All the shopping centres are in real times of transformation,” he says.

Consumers today expect online and bricks-and-mortar shopping to complement one another, says professor Lee. They want to be able to buy a product online and have it delivered to the store, where they can later return it if necessary. This is all part of the omni-channel strategy, which brings together different shopping methods to create one experience. People want to research online through different retailer websites and then go to the store and make their purchase, says Tron. Thus storeowners have to make sure the platforms are integrated and are speaking to each other, to accommodate the omni-channel consumer.

It’s all about getting people into to the mall and keeping them there. Technology may help.

The shopping experience doesn’t start when the shopper arrives at the mall, but rather at home, explains Carder: “It doesn’t even start in the moment when the person says, ‘Hey, I need a new wallet.’ It starts from knowing when they bought their last one.”

Malls are using technologies to convince customers to make the trip. One example is “beacon technology”. With permission, this low-cost piece of hardware sends shoppers notifications as they walk past stores. Beacons use low-energy Bluetooth connections to send store promotions, product information and flash sales directly to the shopper’s smartphone. The technology also gathers information on shoppers. According to the Beacon Technologies website, retailers will be able to tell how much time a customer spends in each part of the store, and even how they navigate the store. The sales staff could also find out the customer’s name and spending habits.

But that’s not all. Cadillac Fairview, which owns the Rideau Centre, is looking at a technology that anonymously monitors signals from mobile devices to track how people move in the mall, explains Cindy VanBuskirk, general manager of the Rideau Centre. It would help the mall decide which stores to put close together.

While technology has its benefits, VanBuskirk says shopping centre owners have to be careful when implementing digital features. Digital screens and flashing lights can be distracting for shoppers, she says: “We have to think about the shopping experience.” Which is also why the Rideau Centre is in the midst of a $360 million redevelopment. The food court was transformed into a more upscale dining hall, to keeps people around longer, says VanBuskirk.

And that’s what it’s all about. Getting people into the mall and keeping them there, says VanBuskirk. Technology may help to do that.

Survival of the fittest

“Technology is a way to evolve quickly,” says Tron. It may be the saviour that retailers have been waiting for.

Experts suggest that evolution is the key to any successful business. As in any industry, retailers and shopping centres have to take chances and make changes. Technology is a great platform for growth in the industry, says Tron. It allows every mall to create a unique experience for shoppers, one that provides the best of both worlds.

“Leveraging technology is an absolute imperative for all traditional retailers and malls right now,” says Carder. “People who put their head in the sand and ignore technology and strategic transformation are going to be dead as a doornail.”

[Front page photo courtesy of Tim Reckmann]