September 3, 2013
Will Same-Day Delivery Save The Mall?
General Growth Properties (GGP), the second-largest mall operator in the country, is introducing same-day delivery of both online and in-store purchases. The service is designed to meet the "evolving consumer demands through omni-channel retailing" while also offering additional ease and convenience in how its customers receive goods.
Same-day delivery will initially be offered at four properties:
- Stonestown Galleria in San Francisco;
- Eastridge in San Jose;
- Glendale Galleria in Los Angeles;
- and Oakbrook Center in Chicago.
Shoppers will be able to purchase online from participating retailers and have those purchases delivered the same day. For brick & mortar stores, adding the offering is expected to provide a tool to offset the same-day delivery services being rolled out by Amazon, Google and eBay.
Shoppers at the mall will also gain the ability to have their purchases inside the mall delivered directly to their homes or preferred locations on the same day. Mall-shopper delivery is expected to particularly appeal to those who use public transportation or those shopping with friends who don’t want to be tied down with bags. Purchases across various stores can be aggregated before delivery.
The price of same-day delivery in both cases will be the same or less than standard shipping.
The service is being added through a partnership with Deliv, which uses crowdsourcing to find drivers to make deliveries. Like Lyft, SideCar and Instacart, such crowdsourced delivery services avoid the costs of warehouses, vans and drivers. Up-for-grabs crowdsourced delivery jobs also potentially improve speed versus those built on an in-house delivery infrastructure.
"Enabling retailers to use our stores to fulfill online orders the same day is fundamental in creating an omni-channel experience," said Scott Morey, senior vice president, GGP. "Our intent is to partner with retailers to create new consumer services such as same-day local delivery and pickup. Our malls will continue to be a point of distribution for unique retailers to serve our shoppers."
The move comes as Target recently announced intentions to roll out Buy Online, Pick Up in Store (BOPS) by the holidays, joining Walmart and Best Buy.
- Deliv Partners with GGP to Bring Same-Day Delivery to Mall Shoppers – General Growth Properties
- Deliv Partners With Mall Operator GGP To Enable Same-Day Deliveries From Its Stores – TechCrunch
- Target hopes to offer in-store pickup service by the holidays – Minneapolis Star Tribune (tiered sub.)
- San Jose’s Eastridge mall rolls out same-day delivery – Silicon Valley Business Journal
- BrainTrust Query: Will a Crowdsourced Grocery Shopping Service Succeed? – RetailWire
BrainTrust
Recent Discussions
Discussion Questions
Is there a market need for same-day delivery of purchases made at mall stores and websites? What do you think of General Growth Properties’ decision to used a crowdsourced delivery service?
Poll
I think the consumer desire for this does not match the hype.
This will satisfy a need we didn’t know we had. I think enough shoppers will want to take advantage of this service if the cost is reasonable. There are many people who still come to malls with the intention of only shopping and not purchasing (teenagers, etc.). This may be an incentive for those “window shoppers” to make a purchase if they don’t have to carry the bags.
The desire for “instant gratification” is one of the few roadblocks to e-commerce supplanting brick-and-mortar retail. Same-day delivery is a valuable tool for overcoming that roadblock, and it certainly gives a more concrete meaning to “omnichannel.” (Not to mention that same-day is the “next battlefield” after free delivery.) I applaud GGP for piloting a program that will have its logistical challenges, to be sure, but will especially drive business for specialty tenants of its malls.
Same day delivery in malls will be best used/pushed during the holidays. Simple logic – all shopping takes place in one location from the webstore to the real store. The key will be how the malls promote this service and keep it within the reach of all shoppers (no major costs to the shopper).
Crowdsourcing is a very exciting opportunity for both consumers and retailers. Using everyday people to complete tasks including delivery makes a lot of sense. The key to success will be a strong vetting process to find trustworthy individuals to make the deliveries.
Malls need to try new approaches to stay competitive and same-day delivery is certainly worth testing. Other options to help drive traffic could include the addition of services within the mall. A senior center or DMV location (driver license renewals) are two examples. Both would help drive traffic to the mall.
This is a “disruptive” innovation. Does the customer need or want this service? We’ll find out soon enough. Bottom line is this does two things:
- First, it goes head to head with same-day-service offerings from companies like Amazon.
- Second, it can be seen as an excellent value-added customer service experience.
The size of the same-day market is unknown (would love to see numbers). But Amazon is investing significantly in it and clearly believes some aspects of it are an element of retail fundamentals for the future. Given the size, impact and reach of Amazon, it becomes almost table stakes to enable competitive responses, if for no other reason than to avoid the requirement of participating in Amazon-owned services.
Is there a market? Yes. Do we know how big it is? Nope!
With so much unknown about the same day deliver market, I applaud GGC for crowdsourcing. This is a great way to serve the customer while sizing up the market, without a huge investment.
Because Amazon, Google, and eBay have made this service available, more and more retailers will need to offer a similar service in order to remain competitive. For that reason, I really like that malls are stepping and serving as aggregators. Makes sense to me!
If all the kinks are worked out and the concept takes off, it does a few things:
- One, it gives a sigh of relief to those retailers who don’t necessarily wish to keep building multiple online-delivery propositions.
- Two, this might give the retailers a meaningful model to work with. It’s almost like brick’s in house and click (or at least the fulfillment part of click) is outsourced.
- Three, malls can actually generate another meaningful revenue stream. Think of a subscription-based delivery service for your family and value-ads like buy at any one of the GGP malls (or partner malls) in the country, name your date and the merchandise will be delivered to your home. The partnerships might emerge longer term.
For near term though, if I’m GAP, I’m thinking…hmm, I have my store level inventory, now do I sign up with the GGP delivery offering or do I, for example, keep working at building and sorting out my reserve-and-pick-up-at-store proposition. The choices for consumers and retailers are certainly going to increase.
Will same-day delivery (or pickup) save the mall? No. Creating an improved shopping experience that attracts the shopper to a safe, entertaining, varied, and enjoyable setting is what mall operators should focus on. Same-day delivery and pickup executed by the mall retail participants in a crowdsourcing model is sure to come in a distant second to the service provided by the behemoths that are focusing on buy-online/expedient delivery.
Is Deliv.co the third coming of Kosmo?
Well maybe delivering mall store merchandise such as jewelry or apparel to the suburbs has different economics compared with one-hour urban delivery of VHS tapes and pints of Haagen Dazs.
Also the mobile technology that enables the crowd-sourced Deliv system did not exist in 1998.
A sound operational formula, however, is only part of the business equation. There needs to be a compelling shopper benefit too. Here things seem murkier to me. Quick and cheap delivery is good, but only to shoppers who want to order mall items online.
From GCP’s perspective, why not offer a third-party delivery option for those shoppers who ask for it? I just think the number of askers might be fewer than they imagine.
We just did a study and found out two things on this topic: A) consumers want what they buy at retail NOW, or they wouldn’t be there, and B) they didn’t really think that same—day delivery was that important—they expect to get it now at retail and a little later online.
So, doesn’t sound like it’ll work. But I like the ‘try’—it’s a good test for us to observe. Just don’t be disappointed if it fails.
Fields did it in the ’40s ’50s. My mother loved it. Once they left a new hat with a pheasant tail on the back porch with the English Setter. They promptly brought over a new hat in their distinctive delivery truck.
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I think the consumer desire for this does not match the hype.
This will satisfy a need we didn’t know we had. I think enough shoppers will want to take advantage of this service if the cost is reasonable. There are many people who still come to malls with the intention of only shopping and not purchasing (teenagers, etc.). This may be an incentive for those “window shoppers” to make a purchase if they don’t have to carry the bags.
The desire for “instant gratification” is one of the few roadblocks to e-commerce supplanting brick-and-mortar retail. Same-day delivery is a valuable tool for overcoming that roadblock, and it certainly gives a more concrete meaning to “omnichannel.” (Not to mention that same-day is the “next battlefield” after free delivery.) I applaud GGP for piloting a program that will have its logistical challenges, to be sure, but will especially drive business for specialty tenants of its malls.
Same day delivery in malls will be best used/pushed during the holidays. Simple logic – all shopping takes place in one location from the webstore to the real store. The key will be how the malls promote this service and keep it within the reach of all shoppers (no major costs to the shopper).
Crowdsourcing is a very exciting opportunity for both consumers and retailers. Using everyday people to complete tasks including delivery makes a lot of sense. The key to success will be a strong vetting process to find trustworthy individuals to make the deliveries.
Malls need to try new approaches to stay competitive and same-day delivery is certainly worth testing. Other options to help drive traffic could include the addition of services within the mall. A senior center or DMV location (driver license renewals) are two examples. Both would help drive traffic to the mall.
This is a “disruptive” innovation. Does the customer need or want this service? We’ll find out soon enough. Bottom line is this does two things:
The size of the same-day market is unknown (would love to see numbers). But Amazon is investing significantly in it and clearly believes some aspects of it are an element of retail fundamentals for the future. Given the size, impact and reach of Amazon, it becomes almost table stakes to enable competitive responses, if for no other reason than to avoid the requirement of participating in Amazon-owned services.
Is there a market? Yes. Do we know how big it is? Nope!
With so much unknown about the same day deliver market, I applaud GGC for crowdsourcing. This is a great way to serve the customer while sizing up the market, without a huge investment.
Because Amazon, Google, and eBay have made this service available, more and more retailers will need to offer a similar service in order to remain competitive. For that reason, I really like that malls are stepping and serving as aggregators. Makes sense to me!
If all the kinks are worked out and the concept takes off, it does a few things:
For near term though, if I’m GAP, I’m thinking…hmm, I have my store level inventory, now do I sign up with the GGP delivery offering or do I, for example, keep working at building and sorting out my reserve-and-pick-up-at-store proposition. The choices for consumers and retailers are certainly going to increase.
Will same-day delivery (or pickup) save the mall? No. Creating an improved shopping experience that attracts the shopper to a safe, entertaining, varied, and enjoyable setting is what mall operators should focus on. Same-day delivery and pickup executed by the mall retail participants in a crowdsourcing model is sure to come in a distant second to the service provided by the behemoths that are focusing on buy-online/expedient delivery.
Is Deliv.co the third coming of Kosmo?
Well maybe delivering mall store merchandise such as jewelry or apparel to the suburbs has different economics compared with one-hour urban delivery of VHS tapes and pints of Haagen Dazs.
Also the mobile technology that enables the crowd-sourced Deliv system did not exist in 1998.
A sound operational formula, however, is only part of the business equation. There needs to be a compelling shopper benefit too. Here things seem murkier to me. Quick and cheap delivery is good, but only to shoppers who want to order mall items online.
From GCP’s perspective, why not offer a third-party delivery option for those shoppers who ask for it? I just think the number of askers might be fewer than they imagine.
We just did a study and found out two things on this topic: A) consumers want what they buy at retail NOW, or they wouldn’t be there, and B) they didn’t really think that same—day delivery was that important—they expect to get it now at retail and a little later online.
So, doesn’t sound like it’ll work. But I like the ‘try’—it’s a good test for us to observe. Just don’t be disappointed if it fails.
Fields did it in the ’40s ’50s. My mother loved it. Once they left a new hat with a pheasant tail on the back porch with the English Setter. They promptly brought over a new hat in their distinctive delivery truck.