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Will online shopping be the death of the mall?

The competitive digital mall experience needs to ‘go beyond this world’ in the way you see, you smell, you hear, you touch and taste, explains branding expert Andy Stalman.

NOMPU SIZIBA:  We now take a look at traditional shopping malls and whether technology can be a better enabler of the mall experience, or whether technology like online shopping can be the death of it.

Joining me in the studio is Andy Stalman. He is an expert on global retail trends and the future of retail in the digital era. Thanks very much for joining us, Andy. You are an academic and you’ve travelled to many countries around the world. In your research just tell us what sort of retail trends you’ve been seeing, specifically in developed markets – before we can talk about developing markets – where there is general access to Wi-Fi and data prices are reasonable. Are people more online-shopping-oriented or do they still prefer to visit the mall?

ANDY STALMAN:  First of all, thank you for inviting me. I am pleased to be here. The trend that is currently happening is divided into two big groups. One is into technology, and the other one is into people. It’s amazing, because many people are focusing efforts on just including technology in the physical space, by including bigger ones or new Wi-Fi towers to track what people are doing, algorithms, artificial intelligence, screens all around the place and more screens and more screens and more screens.

People-orientated retailers are really rethinking the space, and they are trying to re-orientate these architecture-centric spaces into human-centric spaces. They know that the only way to compete against the online-tails, or the online retailers, is by offering a unique and unforgettable experience. The experience needs to go beyond this world, it needs to be the way you see, the way you smell, the way you hear, the way you touch, the way you taste – everything. Everything is connected and making the visit as unforgettable as possible.

The players that are really winning the game right now, what they are doing is merging those things. The best of technology and the best of human in the same place, and understanding that the online and the digital is only expanding the physical, it’s not replacing the physical. So that’s pretty much what’s going on.

NOMPU SIZIBA:  This enhancement of the shopping experience that you are talking about – in what geographies are you seeing this happening?

ANDY STALMAN:  Pretty much everywhere. It’s where we are going. This is what’s happening, and this is where we are going. One thing that is important to note is that for a couple of years everyone was reiterating that the physical space was going to disappear. Everyone said it’s the death of the shopping centres, it’s the death of the physical store. I don’t see that. I see just the contrary. I see more malls, more stores, more attractive spaces, more interactive spaces, more smart spaces and I think the online is not only not killing the offline, but it’s making it better.

NOMPU SIZIBA:  Without dropping names, you did indicate today that you were hanging out with a property company. Based on what you say, does this mean that you are not advising them to invest more in things like warehousing, because most people do believe that online shopping has yet to grow even more?

ANDY STALMAN:  It will grow, undoubtedly. But today in emerging countries online sales comprise no more than 3% of total sales. So it’s only the beginning of what’s going to happen. People, especially in our country, want to socialise, they want to go out, they want to meet, they want to gather, they want to celebrate that we are alright and that we are okay. Where do we go? What are the new meeting places, the new sportswear stores? We want to meet the new hubs are the shopping centres. This is the same in Spain as in South Africa, as in Argentina, as in Colombia. Understanding that we are not only going to shop is important. It’s more than shopping. It’s everything that I’ve just said.

NOMPU SIZIBA:  It’s an experience.

ANDY STALMAN:  Yes, it is.

NOMPU SIZIBA:  Apart from online shopping, how else does technology play a role in the retail experience? I think you have spoken to it, but it’s a question that I pose.

ANDY STALMAN:  Well, the reality is that once we are sharing data all the time, retailers can do a lot of things with that data. One of the big challenges for the retailer is to transform that data into value – not only for the company, but especially for the client. And that’s one of the things that is not happening properly and it needs to happen.

The second thing is technology can be really interesting to personalise and to make each client feel special by personalising your shopping experience or my shopping experience or our audience’s shopping experience, because everyone has different needs, different habits and different conduct. So the more the technology knows about me, the more it can help me save time, make it smarter, make it cheaper and make it more interesting. So that’s where things are going to go and they have just started to go there.

NOMPU SIZIBA:  From my personal experience as a consumer, there are certain retailers that know what sort of things I like to buy. So I’ll get an email saying look, we’ve got this for you and you can get it at a discount – or whatever it may be. So it’s already in play, actually.

ANDY STALMAN:  It’s already in play. I think it’s only starting to bring value to clients, and the more value they will bring, the better we will embrace it.

Still, companies are adopting technology without understanding pretty well that technology is just a bridge between the brand and the client. It’s not the goal to have technology. The goal is to connect with people. And if technology helps connect with people and attract people and seduce people, then we can do lots of things. But it’s not clear yet in the minds of our retailers how they can use it to bring a benefit to both sides.

NOMPU SIZIBA:  When we talk about retailers specifically, rather than necessarily malls, do you think it is a good idea for them to have the bricks-and-mortar buildings where people are going shopping, but also have the online facility as well – because people are living very busy lives and can’t necessarily get to the shops.

ANDY STALMAN:  Absolutely. I can’t agree more. My vision of the future of branding is the total integration of offline and online because, depending on the day of the week, depending on the necessity, depending on the weather, depending on so many things, I want to buy online or I want to buy offline. But this is a real challenge for brands because technology is transforming our reality into an ubiquity where we can connect at any time with any brand from anywhere.

The question is, are brands prepared to answer to all our demands from anywhere at any time for any brand or for any question – I’m not sure about that. But the reality is that brands that are not online and offline are going to be out. That’s for sure.

NOMPU SIZIBA:  In the South African context, we have a little bit of a problem in that we have too many malls.

ANDY STALMAN:  I know.

ANDY STALMAN:  So, in the South African context, what do you think is going to happen? Obviously technology is going to play a role but do you foresee that some of these malls are going to become defunct?

ANDY STALMAN:  Experience is telling us that in other countries, like Spain or the US or France or some other countries, the mall growth has been impressive, as you have just said. In some countries there are more malls than people. The reality is that the malls that are closing right now are those that are ugly or dirty or boring or not thinking of the client. Those that will stay and will shine are those that are really using technology to connect, that are really offering a good tenant mix, that are really understanding that it’s not only shopping, but leisure, entertainment and much more.

And of course there is going to be an adjustment. In every single market the good ones prevail and the bad ones stay on the side of the road. But this is a great challenge for everyone that wants to stay – put the people in the centre of your strategy, make fantastic shopping malls – not only from the architecture or not only from the brands, but mainly from the global experience that you are offering.

NOMPU SIZIBA:  Not just with South Africa, but for malls around the world in general, does size matter?

ANDY STALMAN:  The size that matters is the size of the attitudes, the size of the surveys, the size of the engagement, the size of the relationship, the size of the love you can give your client. Sometimes big is fantastic, sometimes small is beautiful. It’s not about the size, it’s about the content and the personality and the DNA and the culture of that brand.

NOMPU SIZIBA:  Well, it’s been a pleasure talking to you, Andy. It’s been great to have you on the show. Thank you.

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By 2020, 25% of America’s malls will not exist. Amazon is already building a warehouse where America’s biggest mall once stood. If an online store purchasing a mall is not proof enough then I do not know. Invest in REIT’s that specialise in industrial/logistical/warehousing.

In the USA nearly 50% of retail sales are done online , which poses a serious threat to property investors . In SA however only 3 % of sales are done online . It will take decades for our public to change our way of buying house hold goods , to resemble the American way of life. Our poor public transport , poor roads , theft from vehicles , lack of access to internet , expensive data etc will for many years prevent rapid and large scale growth of online shopping in SA .

Several people in Europe told me that they use the malls and retail shops to decide what they want to buy and then order the items online. They do this mainly for technical products because clothing sizes are too unreliable. I know, this is unfair because the retail shops have much higher overheads, but I see no legal way to prevent this.

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