June 25, 2024

Tricia Oak

Business & Finance Excellency

With little fanfare, Mall of America jumps into e-commerce

Since opening in 1992, the Mall of America stood as the nation’s largest example of the power of brick-and-mortar retailing — millions of square feet of shops drawing millions of visitors a year even amid the explosive rise of online shopping.

Then, very quietly last summer, the mall itself entered the e-commerce business.

To provide an alternative to the in-person mall trip, the Mall of America launched Shop MOA, a tool on its website that allows customers to search the inventories of multiple stores in the mall for goods. A purchase can be delivered or picked up at the mall.

“We are such an enormous shopping center that we always struggle with a guest not knowing everything that we do and all of the products and all of the retailers that we have,” said Grant Buntje, the Mall of America’s vice president of marketing. “So this allows them to search that inventory and discovery pre-trip and even without coming to the mall.”

The platform started with a pilot of about a dozen stores in early August in preparation for the back-to-school season. Now, it has more than 70, and there are plans to add more. The online tool has been heralded as a new way to modernize American shopping malls.

Sales volume is still relatively small. Mall of America executives said that Shop MOA had more than 100 transactions during the holidays.

On the Shop MOA site, consumers can search by store, category as well as by typing in a particular product, such as “long black skirt.” A customer can add the item to their cart or wish list and continue to search and shop for other selections from other stores.

After proceeding to checkout, a guest can choose if they want to pick up their order at the mall or have it delivered. A team of paid shoppers at the Mall of America collects the items at the stores and prepares them for pick-up or delivery. The mall contracts with a third-party company to have the items delivered within a 15-mile radius of the mall.

With more than 500 stores, the Mall of America can be a daunting place to find a specific item.

“Having to run through five million square feet of space, let’s be real, that’s a terrible experience when you are on a seek-and-destroy mission,” said Anne Mezzenga, co-founder of retail insight blog and podcast Omni Talk and local retail lab Third Haus.

In recent years, executives at the Mall of America have focused on making the mall more manageable to navigate. In 2017, the mall debuted nearly 100 digital store directories in which guests could type in a store or category and get step-by-step directions to the store from that location in the mall.

The mall reported the project, developed by local digital solutions company Express Image, to be “the first of its size and scope.” Only a month after the installation of the directory kiosks began, Mall of America saw the average “dwell time” from the directories drop from more than three minutes to 30 to 40 seconds.

Prior to the pandemic, the mall began discussions about how to allow for online shopping of several stores through one service. The mall eventually contracted with Canadian artificial intelligence company Adeptmind, which has developed the inventory-search capabilities for retailers like Ulta Beauty, to develop the platform.

For the last two years, Adeptmind has worked on different ways for shopping centers and retailers to allow customers to search their inventory and plan their trips. As of last year, it had about 50 shopping centers on some version of their product discovery platforms.

Last March, Adeptmind introduced an even more crucial step, the ability to close a purchase with products from multiple stores in one basket.

Individual retailers have focused on merging their physical and digital interactions with consumers for the last five years or so. But shopping centers have lagged significantly behind, relying on people to travel to their physical locations to shop.

During the pandemic, malls began to offer curbside pick-up options. However, shoppers still had to purchase the products online through several different stores.

“Taking this approach to really blend their physical center with the digital offering of being able to search every store and find local inventory from different stores, plan your trip to the center and purchase all in one basket, pick up products curbside or have it delivered, that’s a unique piece … for them trying to stay innovative and be at the forefront of that change,” Jesse Michael, managing director of Adeptmind, said in an interview.

A handful of shopping centers including the Mall of America have the e-commerce capabilities that Adeptmind developed. The Mall of America has the most vendors on its platform out of all the other centers. By July, Adeptmind plans to launch another 10 commerce platforms at other shopping malls across the country.

Data from the Mall of America and other shopping centers has already shown a promising start, Michael said. Roughly about 10% of customers are getting to the point that they are adding something to their shopping wish list. For the sites that allow people to make purchases, about 2.5% of all traffic are doing so.

The Mall of America has plans to add more vendors to the Shop MOA platform this year including merchandise from some of its vendors only found at the mall like Nickelodeon Universe. It also is considering growing the delivery radius to include more of the Twin Cities.

Down the road, mall executives would like everything that is sold at the mall, including food, to be offered on the site. But there are logistical challenges to be overcome, said Buntje, of the mall’s marketing team.

Retailers at the Mall of America don’t pay to be on the platform. But as sales volumes grow, the mall is looking at different revenue models to be able to sustain the service, Buntje said.

Guy Booth, store manager at the L.L.Bean store in the mall, said that while his store already has its own curbside pick-up service, Shop MOA provides another convenient solution.

“It’s zero workload for us as a tenant other than helping a customer like we always would,” Booth said.

This new digital tool will only help to improve the mall’s sales numbers and enhance the visibility of brands within the mall, including small businesses that are not as well known, said Mezzenga, who also co-runs online shopping portal Urban Rooster, which features local small businesses.

Not only will malls benefit from this technology but so would shopping districts like 50th and France, said Mezzenga, who tested the Shop MOA service by having clothes delivered to her office.

“This doesn’t mean the decline of the physical mall,” she said. “It’s just the mall finally catching up.”