Lessons On The Future Of Retail From The ‘Last Mall Built In America’
By Stefan Tauber, Experience Strategist, & Warwick Heathwood, New York
Have you ever been to The Mall at University Town Center (UTC) in Sarasota, Florida?
If not, you might be missing out on a piece of history, because, by most accounts, it just might have been the last new-build enclosed mall constructed in America. In fact, after a series of stops and starts, its opening in 2014 was the first of its kind in more than five years.
Like many malls before it, the UTC venue was born from complicated and costly commercial agreements, property development and town planning considerations, delaying its completion for more than a decade. When it finally opened, it was already old news. Technological progress had left it behind.
By 2014, the rapid development of online shopping and smartphones had damaged the central business proposition of malls — the convenience of all of your favorite stores in one place. The digital and mobile paradigm shift led to traffic drops and shuttering of mall operations before they even opened, which eventually forced developers to rethink their investment.
Despite this, within the trials of the UTC and other malls are important insights about changes in consumer behavior and what the future holds for physical retail. Yes, physical retail does have a future, despite the constant ringing of death knells for shopping malls. The advent of technology has revived a buzzword in retail, one which doesn’t neglect but validates the physical space by embracing the human element: omnichannel.
The Omnichannel Effect
While malls like UTC are a dying breed, omnichannel speaks to a desire to adapt the offerings of malls to changing consumer behavior. Traditionally, omnichannel has always referred to a single-revenue system to enable cross shopping and returning behaviors. But from a human perspective, omnichannel also means that there is a choice: the consumer can now choose to transact with a brand across any number of touch points, some human, some technology-based. Making human experiences more available and more convenient for the consumer dramatically increases the effectiveness of every marketing effort.
It also embraces the disruption at the heart of retail’s shift that led to UTC’s struggles. How could a group of property speculators, developers, builders and architects predict such tectonic changes to human behavior over the course of 10 years? How could they possibly adjust or change plans?
During their prime, shopping malls housed well-known department stores that provided an incentive for consumers to frequently shop, which smaller, boutique stores within heavily depended on. However, with the erosion of these big-name players, mall owners had to find new ways to drive traffic while accounting for the unpredictability of digital. This is where omnichannel provides a solution for retail, as a traffic driver from social media to in-store for special product drops, fulfillment and hands-on experiences.
However, make no mistake. While the omnichannel model integrates multiple methods of shopping, it’s still a physical retail strategy at heart. Any model that does not include a physical channel is a digital or a direct model, not omnichannel. That specific detail is the difference between retail success and obsolescence. If physical retail channels of the future thrive, it will be because they create a seamless experience from their digital presence, aligning the use of devices for browsing and online transactions with fulfilment in the store environment.
Take A Cue From The Top
Some of the world’s most familiar brands are already succeeding with omnichannel strategies. Sephora, for example, has remained a mainstay of most local malls. While many malls are fading away, how has this particular brand been able to stay afloat and, more so, firmly remain the number one specialty beauty retailer in the world? Realizing early on that today’s makeup life is overloaded with products and brands, resulting in little brand loyalty especially amongst younger makeup consumers, Sephora invested heavily into a playful “try more, buy more” ethos to minimize customer confusion.
While other retailers continue to heavily rely on in-store sales, Sephora invests in digital offerings that drive more traffic to store and e-Commerce. Virtual Artist, which is the brand’s AR and AI-fueled makeup tool, is one of those breakthrough developments. Co-developed with Modiface, the Virtual Artist was first developed for mobile to make shoppers more comfortable with navigating the complex landscape of makeup. Then, to amplify the experience, Sephora implemented Virtual Artist in its in-store displays. With its ability to track facial features accurately, the physical version of the tool enabled shoppers to immediately scan any product on an endcap and “try on” to find their perfect makeup blush, foundation or lipsticks.
Though commonly considered a traditional retail player, Sephora has been able to leverage digital tools like Virtual Artist to make the path to makeup point-of-purchase less complex and more exciting in-store and online. In turn, Sephora has been able to remain true to its brick-and-mortar roots by boosting traffic from digital to store.
On the other hand, Glossier, as a digital-native beauty brand, uses its own unique omnichannel approach to break through the makeup category clutter. On the digital side, the brand has centered its content around the consumer, in turn creating an armada of advocates. Along with word of mouth serving as a primary driver across digital channels including editorial blogs, social media and owned web, Glossier presents personalized experiences through FaceTime tutorials and Facebook Live videos. Based on the theme of “Get Ready With Me,” Glossier’s video productions star its own employees, who walk viewers through their morning routine and break down the challenges of choosing the right morning makeup.
The highly relatable digital experience aligns with the service offerings of Glossier’s physical NYC showroom, a pink-infused space where consumers can sample the entire makeup suite, connect with “showroom editors” and partake in Instagramable moments within a comfortable atmosphere. In the process, Glossier has easily created a balance between making consumers feel heard and selling loads of merchandise online and offline.
By melding digital, physical and retail in seamless fashion, the aforementioned brands have shown the true potential of an omnichannel experience.
Where We Go From Here
While omnichannel isn’t necessarily a cure-all for long-suffering malls, it can play a crucial role in spurring retail success. That’s because retail is always changing and as the omnichannel experience evolves to match it, there will always be unsuccessful channels and tactics to phase out while new ones are introduced. Even now, retail is facing the death of mobile apps, the rise of mobile sites and the introduction of virtual influencers.
There's a huge opportunity for brands, marketers and agencies to become thought leaders in creating and curating new ownable channels, while still maintaining brick-and-mortar as a primary touch point. After all, with financial pundits now claiming “the mall is not dead yet” and the UTC mall still housing 100+ stores, it’s clear that there will still be a place for the physical space so long as the industry takes the right approach
The original version of this article has been published on Retail Touch Points on September 5, 2018.