Are online marketplaces the shopping malls of the future?
The impact that technology has had on shopping has undoubtedly changed the way consumers make purchases—but is it fair to say that online marketplaces will replace traditional malls in the future?
“Technology has created a shift in the retail industry across the board, including many malls, but it’s a mistake to assume that technology can replace this,” explains Wendy Bairos, director of communications for Hubba, an online community that connects retailers, wholesalers and industry influencers.
She continues, “Historically, malls were not just about shopping. They were a place to hang out with friends, be social, discover new things and attend events. Essentially, retailers paid ‘rent’ as a way to be in front of an engaged audience and convert them to customers.”
Expanding on this, Independent Retailer Magazine’s managing editor, Meaghan Brophy, believes that “while being able to find everything you need in one place is unquestionably appealing—such as online marketplaces deliver—so is being able to touch, feel and test products, as well as experience a brand environment. Because of this, e-commerce will never completely replace in-store shopping.”
Additionally, Brophy explains that she believes retailers are “in a transition period where in-store and online shopping are still figuring out how best to work together to complement each other.”
Blending online and offline consumer experiences present a way to complement one another versus solely compete. You can see this happening from big-box marketplaces such as Amazon, which has a variety of physical retail environments including kiosks showcasing its branded products in malls across the country, as well as 13 bookstores.a
Mimicking this trend, we have also seen Etsy host seasonal pop-up shops and even sell its inventory in brick-and-mortar stores including Macy’s.
Collectively, these examples prove that merging online and offline to build brand visibility and sales can benefit marketplaces and consumers alike. In fact, retail expert and author Bryan Eisenberg believes that this shift can benefit local retailers in particular.
“I believe online marketplaces will continue to grow as all e-commerce grows. However, retail is still local. As we see local stores becoming more digitized I believe the lines of the two will blur,” he says. “So your local store, for example, may eventually become integrated with online marketplaces that will help drive additional traffic and sales for their business.”
Leveraging the value online marketplaces can offer physical stores has yet to be optimized, with many brick-and-mortar retailers shying away from this strategy. Yet reaching a worldwide audience online is hard to ignore. Using your storefront as a warehouse, as Eisenberg points out, allows physical retailers to optimize marketplaces to work in their favor.
“The reality is, customers have choices. So why not be in as many places as possible that they are potentially shopping,” offers Jasmine Glasheen, a retail researcher for Retail Minded.
Merging online and offline consumer experiences
With the one-stop-shop appeal that many marketplaces are known to have, it’s impossible to entertain the idea of marketplaces replacing malls without considering how people truly consume the experience.
Bob Phibbs, a retail thought leader, author and consultant, states that “a shopping mall is an immersive experience where you not only browse but eat and are entertained.”
When you consider it from this perspective, how can an online experience replace this?
“Although online marketplaces are favorites of some shoppers and convenience ports for others, we don’t think they will ever fully replace the brick-and-mortar retail experience,” shares Georganne Bender, one half of speaking duo and consumer anthropologists Kizer & Bender.
“Younger generations actually lean heavily toward brick-and-mortar stores, with SmarterHQ reporting that 50 percent of Millennials prefer in-store as their primary means of shopping,” she continues. “Shopping will always be about the experience, which includes hanging with friends, enjoying a meal, sharing adventures on social media and instant gratification. Brick-and-mortar retailers are upping the ante and the customer will be the clear winner in this game.”
Upping their antes and rewarding customers along the way sounds like the right combination for physical and online retailers alike to compete in a competitive marketplace. And that, folks, is the reality of commerce nowadays.
“Whether you sell online or offline, keeping your target customers in mind should always be among your top priorities. This is particularly important if you sell both online and offline. Understanding the ‘why of the buy’ that drives your customers to purchase digitally versus in-store can help you better support your customers from all channels you sell on,” shares Camille Candella, vice president of sales and marketing for ASD Market Week, a trade show held biannually in Las Vegas.
Expanding on this, Candella explains, “Consumers are influenced in a variety of ways that ultimately put them in a position to want to make a purchase. Whether they choose to buy something from their preferred online marketplace or walk into their favorite local retailer, the reality is there is a reason they make that choice. Whether it’s based on convenience, price or even specific inventory options, ultimately it is based on the collective experience.”
The one thing malls and marketplaces have in common
As it turns out, the experience is what malls and marketplaces have in common. Their differences, however, remain vast.
“Instant gratification simply can’t happen online the same way it can in a storefront,” Bender shares.
Challenging this, however, is Candella’s belief that buying online can often give a sense of accomplishment. “Whether it’s because you’ve checked something off your to-do-list or purchased something you have been lusting after,” she says.
Both perspectives make sense.
As you explore how malls may fit into the shopping future, consider, too, how brick-and-mortar experiences are already showing us change.
The mass mall, for example, has opened up and is not enclosed as an indoor-only experience anymore. Outdoor concept mall designs are favored by many consumers, while marketplaces are weaving their ways into traditional brick-and-mortar environments.
The question to ask yourself isn’t whether or not marketplaces will replace malls but, rather, how can you keep up with ever-changing consumer demands? Striving to meet their needs is how your e-commerce business will remain competitive.
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