The news of an online outlet marketplace venture between Simon Property Group and Rue Gilt Groupe is great proof that the pace of convergence in retail is accelerating in order to keep up with evolving consumer needs.
Simon Property Group, the global leader of the outlet business with 90 outlet malls worldwide, whose properties generate $25 billion in gross merchandise volume in terms of sales, is partnering with a digitally native retailer that has been a material part of the innovation and disruption in e-commerce, especially in the off-price merchandise business. Their venture is now poised to disrupt the $200 billion off-price online apparel market.
This type of partnership of retail property owners catering to traditional retailers with a technology-based digital disruptor is something we can expect to see more of. It provides a unique opportunity to create tremendous value for brands and shoppers by leveraging digital technologies.
Consumers today are looking for convenience and engaging shopping experiences. That means retailers must provide a truly integrated omnichannel shopping experience. As a result, we are seeing seismic changes in the marketplace as online and offline retail shopping worlds are converging.
While more and more online e-commerce merchants are experimenting in the physical space with innovative, low cost-of-entry models like pop-up stores, traditional physical retailers are making strides in the online world by leveraging technologies such as augmented reality (AR) technology -- to allow shoppers to "try on" clothing without having to step foot in a fitting room -- or virtual reality (VR) -- to allow customers to "test" products such as sporting-goods equipment virtually.
Retail property owners such as mall operators are uniquely positioned to accelerate this convergence by leveraging their existing relationship with retail brands and designers, physical presence in communities across the country and vast customer base and access to consumer data.
By providing a digital version of their physical marketplaces, retail property owners will be able to connect their shoppers to the brands and designers, providing the unique blend of convenience and experiential shopping. This is a win-win proposition for all parties involved. Consumers are able to shop from multiple brands at a single place when they are unable to visit the mall, while brands get a new channel to reach existing and prospective customers. In turn, the retail property owners are able to add tremendous value to their physical tenants as well as the consumers by providing a true omnichannel experience.
Simon Property Group is an active client of Publicis Sapient. Sudip Mazumder is Publicis Sapient’s senior vice president of product.