With e-commerce becoming increasingly popular, what will the impact be on shopping malls? And, of course, on mall media?
While South Africa might not be experiencing a plethora of ‘dead’ malls, left lost and abandoned as a digitally connected and savvy population takes their shopping online, our shopping centres are certainly changing.
A McKinsey study, The Future of the Shopping Mall, posits that a “storm of global trends” coming together at the same time has resulted in malls changing the role they play in people’s lives.
“No longer are they primarily about shopping. Now, when consumers visit malls, they are looking for experiences that go well beyond traditional shopping. A trend helping to drive this evolution is changing demographics, such as an aging population and increased urbanisation, which means more people living in smaller spaces and a greater need for public spaces in which to socialise and congregate,” the report says.
The actual design of shopping centres will also have to change, as their functions evolve. Jean-Pierre Heim, CEO, founder and architect for HEIM Design, who recently addressed the South African Council of Shopping Centres congress, believes the mall of the future will revolve around the “spirit”.
“The most important aspect is to show people that shopping centres of the future are designed for them, for their children, according to their local climate, geography and social culture. That said, to add a sense of ‘spirit’ to a building is far from an easy task. In China this is called Feng Shui, in the Western world it is called integration. That fine line between function, form and harmony with tenants and shoppers is the key to adding a sense of ‘spirit’ in terms of new shopping centre design,” he says.
Michael Smollan, chief growth and innovation officer at Smollan, says his sense is that “we will evolve to a space where physical retail is no longer just retail, rather it may become more experiential, where the purpose of a store is to experience and feel the brand and then purchasing and delivery is fulfilled elsewhere”. He says brands that connect with consumers and make it easy for them to experience the brand will win.
“So I think while the pendulum is swinging fast towards online retail and digital for transactions, it will swing back where the consumer wants to have an experience with the brand both physically or digitally. They want to connect. Then they will choose the path in which to purchase,” he explains.
Pivotal role of mall media
Despite, or perhaps because of, the changing shopping culture, mall media has a pivotal role to play, linking the physical environment to brands and consumers across a number of different channels.
Online shopping, while on an upward trajectory, won’t replace shopping malls just yet, says John Faia, general manager of Mall Ads, a division of the Provantage Media Group.
“South Africa’s shopping mall culture is still too strong and e-commerce or e-shopping still has a journey to follow in order to gain serious traction versus how people shop today,” says Faia. “If anything, the evolution from bricks to clicks will be driven by major brands and anchor tenants that already have presence in malls. There is also a move for online shops to have a bricks and mortar presence in malls, look at Amazon,” he says.
The global e-commerce giant opened its first physical, albeit cashless, store in January 2018 and according to Business Insider, plans to launch 3 000 Amazon Go retailers in three years. On the South African front, online kitchenware company, Yuppie Chef, has opened physical stores, and punts itself as an “omni-channel retailer”.
Scott Matthews, new business development manager at Moving Tactics Retail Analytics, says South Africa can expect to see “an increase in omni-channel shopping and bringing digital innovations to brick and mortar retailers”. Customers, he says, are already using their mobile devices to cross-check prices from other online retailers, delivering an opportunity to use this behaviour “to close the loop”.
All of which points to the increasing importance of multi-channel mall media. And not just in the tech sense. Malls, as Faia says, provide multiple touchpoints and ensure a balanced mix of static digital and experiential mediums and offerings.
“In order for a campaign to have impact, a brand needs to consider a variety of touchpoints – branding, promoters, billboards and other mediums that create awareness and impact,” he says. “Brands would be missing a trick if they didn’t include malls in their multi-channel strategy, especially if the campaign is national. Malls are where consumers are at; it is the last point of influence before they make a purchasing decision.”
Yet it is still an “undervalued” medium, and not an immediate option for brand managers planning campaigns, says Faia. “The opportunity for mall media among most major brands is seen as a tactical opportunity or a bolt-on to major campaigns that have a national footprint with a strong above the line presence.”
The opportunities for strategic innovation are there, but, says Faia, South African “retailers and landlords are lagging behind in terms of innovative solutions that create experiences for shoppers”.
Mall Ads recently launched Mall TV (which gives retailers within malls, as well as national and international brands, the opportunity to effectively drive price, place and product via screens placed in high footfall areas) and Mall Radio (currently in 10 malls, and designed to “influence consumers with brand messaging and calls to action when they are in a purchasing frame of mind and have a predisposition to making impulse purchases”). These solutions “do create and enhance a shopper’s experiences overall,” says Faia.
Matthews says internationally, self-help kiosks make for low cost and efficient shopping. “Locally, we have seen online stores with collection points in malls and in store Wi-Fi and apps that promote conversion rates through an omni-channel strategy,” he says.
Activations, of course, are core to that strategy. As Faia points out, eventing creates “shoppertainment opportunities with which landlords can engage and entertain shoppers”. Shopper entertainment, he says, is a BIG focus for most South African landlords.
Andy Higginbotham, creative director at Moving Tactics Digital Impact, says while there will always be an opportunity for consumer engagement through events and activations within the mall media landscape, the “trick to getting this right is to provide new, innovative activities that intrigue mall-goers that are both relevant to the brand and offer the consumer something interesting.
“The beauty of the digital space is that digital technology is advancing so quickly it gives us, as digital solutions providers, a lot of scope to research these elements and provide appropriate solutions that offer our clients a competitive advantage,” he says.
The future is coming
That technology is impacting on how and where people shop is an understatement. One of the most interesting recent developments is in the realm of ‘how’. Nielsen recently launched its Smartstore tool, with South Africa the sixth country in the world to have it, ahead of the US and the UK. As The Media Online reported at the launch, it is an immersive virtual reality (VR) retail experience. The technology is able to fully recreate the layout, look and feel of a bricks and mortar store (either already in existence or planned for the future). This allows for the shopper’s journey through the store to be tested, mapped and evaluated.
Erin Feeney-McKinney, from the business process improvement division at Nielsen, says the brand brought together “smart integration of store planning, merchandising and shopper research techniques to not only get richer insights into shopper behaviour, but to also convert them into something actionable for clients”.
Smartstore builds a live environment, creating multiple scenarios that aid in comprehensive analytics of shoppers’ experiences (tracking shopper’s head, eye and feet movements, 3D heat maps, etc).
“The beauty of this technology is that it allows us to custom build different scenarios, according to client specifications and their research needs. We can then observe shoppers as they shop in the ‘store’ and ask questions without any delay. We’re also able to create scenarios for modern, convenience and traditional trade store formats, which make this solution highly relevant for the South African market,” says Nielsen South Africa Consumer Insights director, Kim Reddy.
Global shopper trend analysts report a rise of chatbots and artificial intelligence in mall media. What of South Africa? Faia reckons we’re lagging the rest of the world, but at the same time says these solutions can only be looked at and considered if there is take up in the market. “Currently there isn’t a need for a mall to be a leader in innovation because it’s not their core business,” he says. “When it comes to AI, the cost to get it into the country and manage it is extremely expensive. Our market has not sufficiently matured to incorporate AI into mainstream media.”
Matthews believes there are two issues facing the application of this sort of technology. “Firstly, customers rarely trust technology to be able to provide meaningful assistance as a replacement for an actual person, and secondly, we have a huge unemployment issue in the country and therefore it is a contentious issue when we start replacing humans with AI,” he says. A better application of this sort of thinking would be remote assist kiosks where staff working from an office can assist customers inside malls via a kiosk that makes use of camera, bio-metric and touch screen technology.”
It’s clear that mall media is constantly changing. But as Faia points out, there is one thing that remains the same: “Malls are very prescriptive on what campaigns can happen in the environment and where media can be placed. The mall has to approve every element of media, so we are restricted in this space. As media owners we need to abide by a set of rules. Malls won’t support campaigns that will negatively affect tenants.”
To read the digital version of The Media November 2018, click on the cover.