Expert Says E-commerce Loyalty Programs Give It An Edge
It’s no surprise that dying malls are flailing to stay current as big-box retailers struggle amidst burgeoning e-commerce competitors. With that in mind, Bisnow sat down with e-commerce and digital marketing guru Peter Gold, CMO of Market America/ SHOP.COM, to discuss how e-commerce is winning in the industry and what retailers can do to stay afloat.
Bisnow: How has the surge of e-commerce affected malls today?
Peter: I think several decades ago the culture was one of shopping and going to the stores and malls on the weekends with your family. Now we’re seeing a shift, and there’s a whole generation right now of digital natives and people growing up who only know of the digital world, only know of e-commerce, only know about apps. That’s the norm for them.
To get to the heart of the whole thing, even though e-commerce has been around for the better part of 20 years, there were some doubts early on. People wondered if they could trust these people online, or whether their information would be safe. Now that we’ve gotten over those hurdles, what we’ve got is a very easy online experience. It’s convenient. It’s more secure than in the past. The items are delivered right to your door. There’s a better selection and variety of products. I’m not saying that gloom and doom and that retail is dead and every store is going to go out of business...but retailers have to make an adjustment.
Bisnow: What have you seen —how are developers catering to this new generation to drive traffic and bring shoppers back into malls?
Peter: I think a part of the dynamic in any market or any cycle is an adjustment. Ultimately it goes back to the brands. Some of them are slow to understand this internet thing, or this social media thing, and didn’t understand the effect that it was going to have or take into consideration that maybe a website would account for more sales than your traditional sell channels. Nobody necessarily expected that. So what you’re seeing is an adjustment. I think one of the clearest examples of how the retail industry is finally reacting, because most of them weren’t proactive, are things like order online and pick up in store. I think that was the first step of trying to build a bridge and connect the traditional retail market with the digital e-commerce world.
Bisnow: Are there any other adjustments mall developers and retail brands are making to stay afloat in this changing industry?
Peter: One reactive or proactive adjustment that developers and retailers have had to make is trying to create a lifestyle destination or a reason for shoppers to have to or want to go to the mall, as opposed to the past concept of an anchor, which was literally if you build it they would come. As a kid I would go to the store not necessarily because it attracted me, but because there was something there I wanted to get. Developers have to think about what it is about e-commerce that makes it so compelling and how they can tap into that.
Bisnow: Are there any incentives that retailers are offering customers to frequent brick-and-mortar locations?
Peter: There should be. Part of the experience is developing some type of gamification or the concept of a reward or loyalty program. When I think about what we do as an e-commerce business, we take all of these factors into account—convenience, 24/7 and 365-day access, secure spending, great shopping experience, deliver my door, no sales tax, free shipping—all of that.
You know, in a mall if you go and you’re a great customer and you go to the anchor tenant and spend $5k, then you go to the best restaurant and you spend $500 on dinner and a bottle of wine, does the mall reward you for that? I’ve never been rewarded for that, have you? So I think there is a disconnect there. There are a lot of points and loyalty and rewards in the e-commerce world that is valuable, and that has not been fully integrated on the brick-and-mortar side.