What once made malls a favorite shopping destination is holding them back in the age of buy-online-pickup-in-store
For people who love to browse the racks of their favorite retailers, there’s no place more exciting than a mall. Social time with family and friends, and easy access to physical stores with actual merchandise you can see, touch, or smell — these are the experiences that make the heart of a true shopper beat a little faster.
Sadly, malls were off-limits for most of last year due to Coronavirus. Many reopened in time for the holiday shopping season, but by then the damage was done. By some accounts, on Black Friday 2020, mall store foot traffic was down by almost 50% compared with the prior year.
Consumers Are Quick to Adopt BOPIS and BOPAC
Just because customers weren’t willing to shop in malls last year didn’t mean they weren’t ready to spend. They just switched their buying from in-store to online.
Consumers spent $861 billion online in the U.S. in 2020, up 44% year over year. Overall, online spending jumped from 15.8% of total retail sales in 2019 to more than 21% in 2020.
The sudden surge in demand for e-commerce caused national and local merchants to think fast about new last-mile fulfillment strategies. Target, for example, sold more than 150 million items through its drive-up and order pick-up channels last year, 4x more than the previous year.
Today, with a year of BOPIS (buy-online-pickup-in-store) and its kissing cousin BOPAC (buy-online-pickup-at-curb) experience under their belts, retailers realize that what began as a last-ditch effort to keep selling without a store has turned out to have real long-term business benefits. These include:
- Lower costs: last-mile delivery accounts for more than 50% of total shipping costs. With BOPIS and BOPAC, consumers assume both the costs and the risks of home delivery because in-person pick-up eliminates the threat of porch piracy, especially in densely populated urban markets.
- Higher revenue: retailers who deployed BOPIS last year increased revenue by 49% year-over-year, on average, compared to a less impressive 29% for those who didn’t.
- Increased profitability: more revenue and less cost improves profitability (do the math).
- More satisfied customers: many consumers have realized that a same-day BOPIS option is more convenient than waiting for deliveries at home, especially with today’s slow and unpredictable ground shipping options.
- Better demand planning: BOPIS and BOPAC bring customers to the store location (even if they’re not always going inside), and move in-store inventory that might otherwise languish on the shelves.
The Mall of the Future
BOPIS and BOPAC were lifelines for many retailers last year, but not for most mall stores. For one thing, mall tenants don’t have room to hold both store inventory and orders ready for pick-up. For another, with the exception of anchor stores, most don’t have exterior doors, and it’s just not practical for employees to run outside to deliver items to individual drivers in a vast parking lot full of cars.
The real problem, however, according to a recent report from Deloitte, has been the social implications of limiting access to physical stores. Throngs of people, crowded food-courts, and dozens of brands in one location are the hallmarks of America’s shopping malls. In the future, says Deloitte, “New malls will need to carefully balance consumers’ desire for social interaction with their need for a safe, easy shopping experience.”
"Retailers and landlords need to address customers' concerns by finding innovative ways to adjust how they organize their stores, interact with customers, collect payment, and deliver products." - Deloitte, The Future of The Mall
Mall operators and retailers will have to work together to reinvent multi-store properties. They’ll need to collaborate on last-mile logistics and decide who will invest in technology to enable seamless, branded, multi-platform shopping experiences.
Mall owners need to think beyond commerce to create “a multi-purpose destination that offers leisure activities as well as other functions, like office, residential, and cultural amenities.”
They’ll also have to think about security. The fact that 70% of Americans used a click-and-collect channel last year hasn’t escaped the attention of criminals. They see an easy opportunity to use stolen credentials to purchase and pick up at the curb without fear of traditional ID checks at the register.
In short, says Deloitte, malls have to completely reimagine their role in order to give consumers new reasons to come back and to feel productive and secure when they do.
About Cura Resource Group
Successfully blending the benefits of online shopping and real-world social interactions requires a well-planned combination of reliable software, well-trained staff, and convenient locations.
Cura Resource Group is in the business of helping merchants fulfill customer orders. Our high-volume Sales Centers serve as safe and welcoming local distribution centers for customers in underserved urban delivery areas, or anywhere, for that matter — even malls.
We’re experts in staffing, operating, and promoting innovative fulfillment facilities that meet the needs of global brands and their customers. We also offer proprietary, custom software for buy online, pick-up in store, or pick-up at curbside solutions.
Contact us today to discuss a local fulfillment strategy that will get you closer to your customers and make product access a positive experience.
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