While many lamented the “death of the mall” well before the Covid-19 pandemic forced shopping centers to close for months on end, there’s been recent cause for optimism as more consumers return to brick and mortar.
Operating as a “mall performance cloud” for more than 1,050 shopping centers across the U.S., Europe and the Asia-Pacific region, Placewise provides technology to shopping centers so that all products in a given location, across its slate of retail stores, will be available for purchase in a central, integrated online marketplace that includes multi-retailer payment, in-store pick up and returns.
These marketplaces would be hosted on the shopping center’s website and integrated in its mobile app.
CEO Peter Tonstad says Placewise’s three-year goal is to drive 10 percent of shopping centers’ sales in the digital marketplace. Tonstad estimates that half of that 10 percent will be incremental sales, while the other half will be transactions that otherwise would have occurred in the physical mall, so the total sales lift is anticipated to be at “the 5 percent level.”
Placewise is launching the marketplace platform with two pilot shopping centers, Wisconsin’s Corners of Brookfield and Norway’s Kuben Senter Hønefoss.
Tonstad believes commerce centers like the two pilot locations offer built-in advantages over standard online shopping.
Not only do they understand the local area, but they have an established shopper relationship with these consumers, Tonstad told Sourcing Journal. “Working with Placewise, they will typically have, on average, 30 to 50 percent of the physical shoppers” in the area in their database, “a perfect point to start promoting a digital marketplace on behalf of their tenants.”
They also have the final-mile benefits both from a sustainability and an ROI perspective, since “nobody’s making money on last-mile delivery,” he said. With shopping centers offering dining and entertainment options, shoppers have additional incentives to pick up an item they ordered online. Nevertheless, consumers at these locations can choose whether they want to pick up the items at the shopping center in a centralized location, or have them delivered to their address.
The end-to-end platform’s main features include full product and inventory integrations allowing shoppers to access the full suite of merchandise in each retailer’s store. Within the platform, consumers can buy products from different retailers in a single checkout.
And in turn, a shopping center can accurately portray its inventory levels in each store before a consumer enters that location.
Shoppers returning a product do so through the shopping center or directly to the individual retail store.
“We feel that that physical shopping center location is a supporting component to reduce returns in the first place, because if you do pick up at the location, or you get the delivery from your local regional neighborhood, you will have other reasons to go to the physical location throughout the week,” Tonstad said. “In that case, you will combine the return with other beneficial activities. You’re closer to the return point than you would be on average, buying on Amazon or wherever you buy. By expectation, that will reduce the number of back-and-forth returns.”
Tonstad feels Placewise’s offering fits well in the current retail environment, particularly since many solutions can you the inventory but offer limited stock data, or none at all. And anything related to the actual purchase and delivery processes is largely still done through the existing e-commerce channels of individual retailers.
The openness of today’s retail ecosystem also lends itself well to the growth of Placewise, especially as more retailers become platform-agnostic, whether by putting their brand on Amazon or promoting products via Google Shopping, he said. Retailers have warmed to the idea of collaborating under one shopping center’s roof.
“They’re relating to vertical marketplaces like fashion-specific marketplaces,” said Tonstad. “The whole perception of saying, ‘My retail is within my own domain or my own consumer channels’ is definitely moving more toward ‘I am a retailer. I’m also a platform. I need to have my APIs in order to give other sellers access to my products and an inventory.”
Placewise wants the existing trust in the relationship between the shopping center and the tenant retailers to be the foundation the digital marketplace is built on.
“It always has to be to the benefit of the tenants,” Tonstad said. “There can’t be any perspective of the shopping center becoming, let’s say a competing digital marketplace through the launch channels of their tenants. This is purely to serve their existing tenants.”
Placewise’s Mall Performance Cloud technology powers the marketplace offering at each mall, and includes a customer data platform (CDP) designed to collect consumer data across all digital touch points into a single database.
Through the Placewise mobile app, tenant store managers and owners can communicate with shopping center operators, participate in center events, upload promotional information and product data, connect with shoppers or communicate directly with center management.
The company has operated a RetailHub in the cloud, which is an integrated marketing platform that enables retail partners to create both local and national content and promotions that publish to the websites of Placewise’s partner shopping centers.
“For the last year and a half, I haven’t spoken to any shopping center owner or operator who now says they don’t think it’s relevant for them to become a digital marketplace,” Tonstad said. “On the contrary, they see it as a necessity rather than that nice-to-be kind of thing, so everything is pushing in that direction.”
Tonstad understands that “seeing is believing” for many parts of the retail real estate industry, but he is confident that Placewise’s current effort targeting 20 to 30 installations across multiple geographies by the end of 2021 will give the platform strong validation for future implementations with current shopping center partners and new ones alike.