Malls are undergoing an evolution from analog to digital experiences to better monetize their real estate with newer, technology-focused solutions like livestreaming and loyalty programs.
Minnesota-based Mall of America which piloted its first livestreaming initiative with Popshop Live in late 2020, has expanded its offerings to include a new e-commerce website called Shop MOA. Next year, Mall of America will also be launching a new loyalty program to reward its online shoppers. Separately, the shopping and entertainment destination center will introduce a new and upgraded livestream initiative next year centered around first-party data integrated with Shop MOA.
Other mall owners like Macerich have upgraded their in-store shopping experience with features like rotating displays, digital displays and small kiosks to create a more impactful experience. Beyond this, there have been some innovative plays such as Brookfield selling virtual air space rights in its mall, which allows advertisers to enable augmented reality that consumers can access via their smartphones. Simon Properties had partnered with ShopShops, a Chinese startup which has had success in Asian markets – to push livestreaming.
Most people think of malls as large pieces of retail real estate. Traditionally, renting out spaces was how most mall developers made money. During the pandemic, however, fewer customers were visiting branded retailers, which served as the mall’s anchor tenants and its primary sources of foot traffic. Due to this dip, some malls have been trying to become less reliant on traditional business models. One strategy includes finding new ways to monetize and revamp their advertising spaces. As the global economy reopens there are a good number of A-class malls which are thriving and are attracting a lot of footfalls. But, even so, developers say malls today can’t ignore online shoppers. Some are developing internal digital capabilities through their own websites or collaborating with third-party experts to provide customers with online shopping benefits like pre-shopping before a mall visit, among other things.
“I think it’s really important that malls are in the e-commerce space interrupting consumer journeys where they are looking to purchase online,” Grant Buntje, vice president of marketing for Mall of America told Modern Retail. “There are more ways to buy products than ever before. That is why we’re going livestream on Shop MOA and [will introduce] a loyalty program as we get focused on highlighting product more than just highlighting the brands themselves.”
Mall of America launched its online shopping website roughly a year ago around Christmas, offering shoppers items from over 70 retailers including fast-fashion brands like Zara and H&M. Mall of America, which has historically focused on getting foot traffic to its stores, is now more intent on emphasizing the products that its retailers have to offer. Consumers, said Buntje, are chasing items more than brands. “They’re less brand loyal. We can’t rely just on a brand name to make that connection with consumers. We need to be active and proactive in those e-commerce spaces to be able to do that,” explained Buntje.
And that’s why Shop MOA opens up a world of new advertising possibilities for Mall of America from a revenue standpoint. “We have the ability to sell placement on that site if we want to do that. We can also do more traditional advertising on that from our retailers if we choose to go down that route,” said Buntje.
While there is no livestreaming platform at Mall of America this year, Buntje added that he firmly believes in using livestreaming to shop and connect consumers in original ways to draw attention to its property. “We did a partnership with Popshop Live that went well. But we are currently looking at a new way to do livestream shopping that relies more on our digital tools versus a third-party app. We are planning on launching a version of that in 2023,” he said.
Buntje said while the Popshop Live pilot was a great way to expose a nationwide audience to Mall of America and its products, the company realized it was too dependent on the Popshop Live audience that was built into the app. “So we were marketing to people that were on the livestream app versus the audience of Mall of America. So what we’re looking to do is find a livestream partner that allows us more flexibility with those livestream shows that could live on our channels versus theirs,” he added.
Mall of America’s new livestream program will get integrated into this e-commerce engine that highlights the Mall of America tenants and products. “Our vision for livestream shopping is that we will highlight the products that we have on Shop MOA in the stores, through our own inventory and our own checkout versus having to rely on a third-party to do that,” said Buntje.
The majority of mall advertising is still concentrated on physical signs, which, despite being rather outdated, is still one of the most efficient ways to reach consumers, said Neil Saunders, managing director, retail at consulting firm GlobalData.
Last year, Brookfield teamed up with The Aria Network, known for providing immersive AR experiences at events like the Super Bowl through the Pepsi Halftime AR, to offer endemic and non-endemic advertising using augmented reality technology. The deal offered Aria access to millions of square feet of unused advertising space, including virtual air rights in leading malls across the country. “Brookfield Properties is always seeking new, innovative experiences for our guests, and we know our shopping center communities will embrace this new offering,” Brookfield Properties’ Senior Director of Strategic Partnerships, Patrick Pechous said in a press statement last summer.
Saunders added that livestreaming initiatives are still niche and far from being in the mainstream of mall advertising. “My view is that most mall owners were much more experimental with advertising models during the peak of the pandemic because they needed alternative revenue streams. However, as in-person shopping has roared back they have shifted back to more traditional advertising,” said Saunders.
Andrew Lipsman, principal analyst for retail and e-commerce at Insider Intelligence in an emailed response to Modern Retail said digital-out-of-home advertising represents a big opportunity for malls to better monetize their real estate through high-margin digital ad revenues. “Digitization of those experiences enables more advertising impressions and better measurement capabilities, which can encourage more investment from brands and retailers,” he said.
Source: Modern Retail