When Shopping Malls Go Interactive

By: Steve Outing Recent headlines about fast growth in online shopping have many local retailers scared. They should be. In the case of my own family, we've done about one-third of our shopping for this Christmas online, ordering from national Web retailers instead of enduring the crowds at the mall (and saving money in the process). Having dealt with crowded roads and crowded malls on a holiday shopping trip the other night, I've cherished the times I can order what I want online.

Does this mean doom for local retailers? Of course not, although it will mean an erosion in revenues as e-commerce grows. The important thing is for local retailers to figure out how to compete with what to them is a disturbing and significant trend. They have to figure out how to compete in the online environment with national retailers that are taking away sales. (And yes, this does tie into the online news business, as I'll get to later.)

So, how can the mom-and-pop or regional chain store at the local mall compete against Amazon.com or LandsEnd.com, for example? One important competitive element is for the mall to have a strong, useful Web site that lets consumers do some of their shopping preparation online before making a physical visit to the mall. A good mall Web site will allow a shopper to "visit" numerous stores; check out the availability of items they are looking for ("Which stores in the mall carry Armani women's purses?"); look over store "specials" and sale items; and create a digital "shopping list" and personalized mall map to take with them to the mall. Online-aided shoppers also can load up on digital discount coupons to take with them to the stores.

Contrarian view

The concept behind shopping mall Web sites is potentially powerful, according to Brian Hayashi, president of Denver-based PCmenu LLC, a firm that develops shopping mall Web site technology and currently operates sites for about 25 malls around the U.S.

Hayashi says the common wisdom and media focus has been on the idea that national online retailers are about to destroy local retailing. But his 1-1/2-year-old company "took the contrarian view, of saying that the Web should empower local retailers." The local connection between retailers and their local consumers is a strong one, and in-person shopping will remain superior to online shopping in important ways. (You can't feel the fabric of a shirt when shopping at LandsEnd.com, for example.) But local stores must show up at the (online) game. "How can you win or place if you don't even show?" Hayashi asks.

What local retailers need to do, he says, is figure out how to utilize the online environment to create more direct interactions between shoppers and retailers. "That's where the sweet spot is," he says. For example, the cigar store needs to build up an online list of cigar aficionados, and let them know when it gets in a small shipment of a particularly rare brand of cigars, then let them know about it via e-mail. The mall site can drive interested customers to the store's Web pages, where the store ideally employs such techniques as e-mail or setting up a cigar discussion forum to create a local cigar-smoking "community."

Of course, a mom-and-pop store owner isn't likely to understand or have the time to deal with how to make the best use of the Internet to sell more cigars. And that's why mall sites are so important in helping mall retailers survive competitive forces from cyber-retailers. Malls need to provide easy-to-set-up Web site templates, collect sale information from stores, and support a mall Web site search engine ? allowing non-Internet-savvy retailers to take part in the online shopping juggernaut.

The mall Web sites that are operating now are early generation. Typically, not every item available in stores is listed; most often each store lists featured or sale items on their Web pages, which can be placed on the consumer's "digital shopping list." Nor can online shoppers purchase online. Most mall sites suggest that shoppers can make their selections online in advance of a trip to the mall, where they arrive with a plan of which stores to visit and a map of where each retailer is in the mall. The idea is to make the trip to the mall faster and easier ? an important concept in a time when many consumers are stressed out from life's demands.

At some of PCmenu's mall sites, online shoppers are told that they can order some things that they see online by telephone, and that stores will hold the items until they can be picked up at the store. The ideal mall Web site would allow ordering directly online with a credit card, allowing the consumer to stop by the store to pick up the merchandise, or pay extra to have the store deliver it. It's unrealistic for many stores to ever put their entire, often-changing inventory online for mall Web customers to peruse, but they can make featured items available for direct online purchase. And stores can (and should) list all the brand name and product categories they carry, so that when a consumer uses the mall site's search feature to look for "Farberware cookware," those stores that carry that brand will turn up in the results.

More futuristic mall Web sites also might allow online consumers to comparison shop. ("Which store at the mall sells the new Lyle Lovett CD at the best price?") Already, national Web sites are starting to offer comparison shopping so that consumers can find the best price on an item between the national Web retailers; local stores need to have something similar in order to be competitive.

News site tie-in

What has this got to do with the online news business? A lot. Foremost, consider that advertising from local retailers is a mainstay of most newspapers. News sites should do what they can to promote the continued health of brick-and-mortar local retailers in the face of cyber competition, lest the news companies themselves suffer from local retail's decline. News site relationships with shopping malls are a win-win.

Mall sites need promotion, and Hayashi believes that local news sites are the best venue to make the online mall services known to the right audience. He advocates a relationship between the malls and newspapers, in particular, and at several of PCmenu's mall sites there are partnerships with local newspapers.

Hayashi wants to make it easier for retail tenants to purchase advertising in online newspapers. "Having an online presence is just the first step (for the retailer); the next is having a strategy to drive traffic," he says. Small mall retailers are unlikely to deal directly with an online news site to place an ad, so the mall ? and its relationship with the newspaper ? becomes the intermediary. Obviously, the news site benefits from increased online advertising from small retailers that it otherwise would be uneconomical to target as potential advertisers.

Another interesting mall-news site relationship involves inserting contextual editorial content into the mall sites. Hayashi suggests, as an example, that a Chicago shopping mall with a relationship with the Chicago Tribune might include recent newspaper fashion stories when the Web shopper searches for "women's dresses." If an online shopper does a search on mall music stores for a particular CD, the latest review of the album from the news Web site's archive could be displayed alongside the retail data.

Also, Hayashi says there are opportunities around a mall's promotions for holidays like Mother's Day or graduation day, where the mall's Web shopping service is promoted via ads placed in the print newspaper.

Wondering what to do about local retailers' bleak-looking future? If not doing it already, local news sites should be working with local mall management. Those malls that don't already have a Web strategy in place could benefit from a partnership with a local news site. In some cases, publishers can sell their expertise in building mall sites, or they can work with the new crop of shopping mall Web technology developers, who are eager to establish relationships with news sites.

Contact: Brian Hayashi, hayashi.brian@pcmenu.com

E-mail delivery delay

To those readers of Stop The Presses! who receive this column regularly as HTML e-mail messages, please accept my apologies for my Monday column not going out on time. (It got delivered on Tuesday.) This was human error on my part ? I forgot to approve the column to be automatically sent until Tuesday ? and should not reflect on the quality of the e-mail service I use for this feature.

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This column is written by Steve Outing for Editor & Publisher Interactive. Tips, letters and feedback can be sent to Steve at steve@planetarynews.com