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Katharina von Schacky, Global Head of Shopping at Commerz Real and Member of the ACROSS Advisory Board. Image: Commerz Real

Which e-commerce? How malls can morph into tech businesses, too

Opinions tend to be very much divided when it comes to the big e-commerce players.

By Katharina von Schacky

For some, they are the bogeymen, killing off the livelihoods of retailers and causing the slow deaths of inner cities. For others, they are role models for the highest-possible focus on consumers, ever increasing the trend towards customer convenience, individually tailored products, and faster delivery thanks to the digitalization of all aspects of the customer journey. What is preventing stationary retailers from doing the same?

Let us start with an example: When online pure players first emerged, they allowed their customers to publish their own product reviews. This was a veritable revolution in the retail trade – as banal and natural as this service may seem to us today. The consumer, this “mute” being whose personal opinions had not previously been of any interest to others except when voting with his or her wallet, was suddenly given a voice. Today, any shopping experience – good or bad – can be shared with the world with just a mouse click. The enthusiasm that this opportunity fosters among customers is just as great now as it was then, and brands such as Amazon have been associated with two things above all others ever since: a) the relentless focus on the needs and the comfort of customers, and b) the promise that the innovation processes necessary for ever-improving service will never come to a standstill. Brick-and-mortar stores are not excluded from customer reviews, however. Those that do not offer a review platform themselves are rated on third-party sites. All businesses with direct customer contact have to deal with reviews and reactions – and they should not see this as a threat, but as an opportunity to improve their services as well.

Let us take another example that we are all familiar with: checking on product availability. Customers who compare and order products on the internet can, as a rule, see the availability of their desired goods directly on the product page. If the goods are “in stock”, an order can be placed and fulfilled immediately; if they are not, it is possible to place an advance order – all very much the norm.

Why shouldn’t a shopping center be able to do this as well? Why shouldn’t customers of brick-and-mortar stores also be shown where and how quickly they can collect their goods at the mall? The necessary technology has long been available. Nevertheless, landlords and retailers alike are slow to introduce new digital services, as this process is associated with a change in their self-image – away from thinking purely in terms of “sales per floor space” and seeing themselves as salespeople first and last, to becoming technology companies that regard data as their “raw material” for the “manufacture” of a consumer experience.

The fact that it is, indeed, worthwhile to shape customers’ digital experiences is demonstrated by an example from the world of fashion and cosmetics. In a branch office of trendy London brand Charlotte Tilbury, customers can sit down in front of a screen that projects all kinds of make-up options onto their faces, showing them click by click what widely different looks can do for them. All of this is possible thanks to augmented reality – reality that has been enhanced with the aid of a computer. If customers like one of the options they see, not only can they have the computer-generated image immediately sent to them by e-mail, they are also provided with a complete shopping list of the products required to replicate the desired look.

If digital innovations are applied to stationary stores in the same way as on the internet, and the “digital wall” between the online and offline worlds is demolished, how will retailers and their landlords be impacted? Over time, the “e” in e-commerce will lose its meaning. Big online retailers will find it hard to offer added value for their customers when compared to traditional businesses. The future challenge will be to get our commercial real estate ready for this new form of shopping. The days when center managers were able to conclude 10-year lease agreements, then sit back and twiddle their thumbs are over. Instead, they themselves will, in a sense, develop into technology enterprises that help to generate sales with data – not just with outlet space.