Author: Daphne Howland
Source: Retail Dive
Simon on Tuesday announced the beta launch of an online shopping platform for the property developer's premium retail outlets unit, according to a company press release.
Dubbed SPO, the platform is in early beta-testing with the company's VIP Shopper Club. Simon CEO, President and Chairman of the Board David Simon said the company has received "significant interest from the brands and retailers" in its physical premium outlet malls. The site is set to open to the general public later this spring, he also said.
Simon in 2017 previously tied up with some pure-play e-commerce companies, bringing their wares to physical spaces through "The Edit" at its Roosevelt Field mall in Long Island.
While David Simon has downplayed e-commerce as a viable retail model in the past, he is also calling the new site the company's "fifth platform," along with its traditional malls, regional mixed-use shopping centers it calls its "Mills" portfolio, outlets and international mall operations.
It's "low hanging proprietary fruit that was identified and capitalized on," according to Shlomo Chopp, who consults with and invests in shopping centers. "Generally I think it's a smart move by a smart innovation team at Simon. It actually plays to so much being advocated as the new way of retailing."
It was likely prompted by slowing traffic to Simon malls, he also said in an email to Retail Dive, adding that it remains to be seen how much of an impact it has on sales. Simon himself, speaking to analysts in February when he teased the new effort, called it "not a big deal."
"[T]he earnings impact to it will be, I think, completely on the margin. I hope the market appreciates that," he said, according to a Seeking Alpha transcript of the company's fourth quarter earnings call. "We will say, oh, boy, that's worth a shot. It's not a big deal. It's a couple of cents here and there. And it's an unbelievable investment in our future, and we'll see where it goes," he later added.
Probably not too far, according to retail analyst Nick Egelanian, president at real estate consultancy SiteWorks. "We should never scoff at any brick and mortar landlord or tenant innovating in any way, including increasing access to internet buying opportunities," he told Retail Dive in an email. "With internet sales growth slowing and not likely to top 15-17% of US retail sales, and Simon being owner of a large brick and mortar outlet and mall portfolio, its future is not going to be determined by having or not having an 'internet strategy.'"
"Most regional malls have been undermined by more convenient and better priced Commodity Retail options, and those Specialty Retail centers that survive, many of which Simon will own, will only maintain or expand market share by offering more meaningful shopping experiences," Egelanian said. "Investments in better locations, market dominant retailers, creative merchandising and more meaningful places will be what wins the day in the end."