The shopping mall of the future

Cape Town - The shopping mall of the future will have to be innovative and find creative ways of making the shopping experience more convenient, according to Louis Van der Watt, CEO of Atterbury Property, which is the developer behind the Mall of Africa.

He says an example of this would be the ability to allow consumers to buy an item online and collect it from a store near them. He says the nature of shopping malls has already begun to change in the sense that people are increasingly looking towards these spaces to be entertained.

“Our experience has been that as people become more dependent on technology and spend more time online, they also have a greater need to get out. Shopping malls need to adapt to this need and ensure that they also provide enough entertainment,” said Van der Walt.

“Some products, like household appliances, will definitely be bought online more frequently because it is easy to do research and compare prices online. But people still want to see, touch and try on more personal items.”

READ: Tens of thousands of consumers descend on Mall of Africa

Stefan Salzer, partner and managing director at Boston Consulting Group (BCG), added that consumers constantly switch between shopping online and in physical stores. This means retailers also need to use technology to make this transition a seamless and convenient experience.

“Consumers want to get products when and how they want. This means retailers have to integrate their marketing, special offers, loyalty programmes and content so they function in union between stores and mobile and online portals,” explained Salzer.

"The dramatic shift in the consumer profile from baby boomers to millennials has forced retailers to realise the importance of strong digital brand equity. In future, physical stores may no longer be the only or most efficient points of sale for retailers, but they can still play a powerful role in brand building."

The question for retailers, therefore, becomes how a physical space can be used to generate additional sales.

"Retailers have always known that the look and atmosphere of their stores can influence sales. The mall of the future will have to take this even further,” said Salzer.  

He cautions that the experiences retailers offer in physical stores cannot merely mimic or extend what they offer online. They need to provide consumers with more than a showroom. In his view, one of the most effective ways to do this is through personalisation of the shopping experience.

READ: Why Pretoria has become home to Africa’s biggest mall

Brent Curry, chief information officer of The Foschini Group (TFG), said online sales are expected to make close to 2% of TFG’s total retail sales in SA for 2016 and he anticipates their contribution to the business will continue to grow.

“Like all retail, online is tough right now for certain retail categories, but this is balanced out by the growing market for online shopping, as more and more customers seek the convenience and flexibility it offers. We hope online sales will reach 5% of revenue within the next few years and forecast this to grow to over 10% in South Africa by 2025,” explained Curry.

TFG has focused its investments on its online shopping portal, specifically on making it as convenient as possible. This includes creating 24-hour pick-up points conveniently located across the country for customers to collect their purchases.

“We are also trialling an innovative ‘Deliver2Me’ geolocation delivery option that works a bit like Uber does to find you and deliver your parcel. The trials will begin in Cape Town during the festive period,” said Curry.

TFG has already invested heavily in its online offering, but Curry does not expect physical stores to ever disappear completely. Greater access to data about its brands, products and customers has been one of the great benefits of increased online trade for TFG.

“We use this information to personalise the customer journey through our sites. This is what enriches our interactions with our customers. Google always says that the mobile device is now the ‘door to your store’," said Curry.

"We learned that we need to always be mobile-first across our entire business. If we can provide a great welcome on the mobile device, then our customers will stick around and shop with us.”

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