Malls reopen with launch of ‘retail-to-go’ in Texas
SALES: Pandemic requiring stores to have online, mobile presence
Nine major Houston-area malls on Friday began facilitating curbside pickup for retail tenants restarting sales under Gov. Greg Abbott’s recent executive order allowing “retail-to-go” operations.
Shoppers at Baybrook,
Deerbrook, First Colony, The Galleria, Houston Premium Outlets, Katy Mills, Memorial City, Willowbrook and The Woodlands malls can now purchase products from participating retailers via phone or online, drive to a designated pickup location at the mall and have a store employee drop it off in the back seat or trunk of their vehicle. At Memorial City Mall, customers can also pick up their purchases from an automated package locker.
Many retailers, forced to close indefinitely under stay-at-home orders, are offering steep discounts to draw customers and bolster lagging sales.
Yesenia Gonzalez, 22, said she ordered some charms and earrings from Pandora on Friday morning, and drove to Memorial City Mall to pick them up from a package locker operated by a Houston startup called Uno. An assistant manager at Panera Bread, she said she wanted to buy a birthday gift for her friend who is planning a small get-together after the stay-at-home order ends later this month.
“It’s just weird,” Gonzalez said of the experience of picking up her order from the mall. “I usually spend two hours here before I would go home.”
The so-called “retail-togo” business model has already been embraced by most major grocers and big-box retailers. Walmart has installed automated pickup towers, Target has designated online-pickup kiosks and Home Depot and Whole Foods have automated package lockers inside their stores. H-E-B and Kroger in recent years have expanded curbside pickup and home delivery, including investing in selfdriving grocery delivery vehicles.
But malls, long focused on captivating leisure shoppers and tourists looking for a fun outing, have been slow to adopt the “buy online, pick up in store” model, which can be difficult to execute in a large sprawling mall with many retailers. Instead, malls have invested heavily in amenities such as outdoor green spaces, indoor playgrounds and ice-skating rinks, and repurposing defunct department stores into high-end and fast-casual restaurants, bars, movie theaters and fitness clubs to create the sort of engaging experiences that will lure back consumers increasingly shopping online.
“The whole premise of the mall is, you come here and experience things,” said Venky Shankar, research director at Texas A&M University’s Center for Retailing Studies. “But the business model of malls will have to change. The coronavirus has increased the need to have an online and mobile presence. It’s the new normal.”
Slow start
Shankar said it will take time for shoppers to return to malls, as consumers are still reeling from the virus and its economic fallout, which has caused a spike in unemployment. Since March, 1.3 million Texans have filed applications for unemployment benefits, nearly double all the claims submitted statewide during all of 2019, according to the U.S. Labor Department.
Indeed, only a handful of customers showed up at local malls to pick up merchandise on Friday, underscoring the daunting task facing malls as they look to reopen to the public after the pandemic passes.
Before Simon Property Trust temporarily closed its malls, which include The Galleria, Houston Premium Outlets and Katy Mill, foot traffic across their Texas properties plunged by 71.1 percent in early March from the month before as shoppers wary of public gathering places opted to stay indoors, according to commercial real estate firm JLL.
Retail sales nationally plunged 8.7 percent in March, the biggest onemonth drop on record, according to the latest report from the U.S. Commerce Department. Apparel and accessories sales were down 50.5 percent, department store sales fell 19.7 percent and electronics sales dove 15.1 percent month over month.
Consumers who ventured out to malls to pick up their online purchases Friday said they needed to buy gifts for birthdays and the upcoming Mother’s Day. One 20-something man said he was picking up an engagement ring to surprise his girlfriend.
Jump on competition
Uno, which installs automated package lockers at malls and strip centers and delivers online orders to customer homes, saw the need for malls to adopt e-commerce well before the coronavirus began spreading across the nation. The company in December installed 60 package lockers at Memorial City Mall. Shoppers can order online from a participating mall retailer, have their purchases placed in a secure locker and access their goods via an emailed code.
Tyson Shields, an Uno co-founder, said the company handled 10 to 20 orders a day before it was forced to temporarily halt operations in March under local stay-at-home orders. After relaunching on Friday, Shields said he anticipated a surge in business from mall retailers looking to sell products online and from consumers looking for a contactless way to pick up products.
Uno has partnered with four Memorial City Mall retailers: GameStop, Hallmark, Pandora and Sun & Ski, and is in talks with more than 20 retailers interested in partnering with the company. By midday Friday, it had placed 25 online purchases from Pandora inside its mall lockers, Shields said.
Uno charges mall retailers $1 per order to place inside its lockers, and between $8 and $10 to deliver orders to customers’ homes. The company’s package lockers are cleaned every time an employee places products inside, and a hand sanitizing station is located next to the lockers.
“It’s taken a while for brick-and-mortar to grasp e-commerce,” Shields said. “After coronavirus, they’re starting to realize it’s important.”