Check it Out: Same-Day Delivery the Key to Saving Malls?

Retail industry analysts have forecast the death of the shopping mall for a couple of years now. The model no longer makes economic sense, they argue, driven in large part by the decline of traffic-driving anchors such as Sears and J.C. Penney (both companies recently announced more store closures). Factor in the growth of e-commerce and it appears the days of sprawling, multistory malls are numbered. Or are they ...

Deliv, a provider of same-day delivery service via crowdsourced drivers, announced this past December that it's partnered with four of the country's largest mall operators to provide same-day delivery service to its shoppers. Here's an example of how it works: you have a holiday shopping list that includes clothes, luggage, sports equipment and something for the family pet. You purchase items from several Deliv-enabled retailers, including Chico's, Naartjie Kids, Tumi, Sport Chalet and Pet Food Express. Rather than carry all those bags from store to store and to your car, you leave your purchases with the store associates to be delivered to your home two hours later. Not only that, you're able to view delivery on a map in real time from pickup to your front door.

It's ironic that a tenet of online shopping — home delivery — may be the answer to the struggles of brick-and-mortar stores. The four mall operators — Simon Property Group, General Growth Properties, Macerich, Westfield Group — are building the infrastructure needed for Deliv's solution, including providing runners, concierge services, storage space, shipping consolidation locations and dedicated parking for crowdsourced delivery vehicles. With multiple tenants working together in a single delivery system, mall retailers are able to provide the on-demand services today's consumers are looking for.

"Retailers are mobilizing to deliver customers the best merchandise in whatever way they prefer," said Daphne Carmeli, CEO of Deliv, in a company press release. "Deliv is powering the evolution of malls and retail outlets into distribution centers, creating a massive strategic and logistical advantage over pure-play online retailers. The top 100 retailers have more than 100,000 retail stores in the U.S. alone — all of them potential distribution centers. When you consider Amazon.com has approximately 40 [distribution centers], you see the strategic opportunity."

Omnichannel Strategy
Providing in-store shoppers a better overall experience through the use of technology is the impetus for these partnerships. Brick-and-mortar retailers have come to realize that competing in today's on-demand environment means diversifying their businesses. These four mall operators — which manage over 660 malls, featuring thousands of retailers across the country — are taking the first steps to doing that.

"Our partnership with Deliv is another example of our holistic approach to multichannel retailing and our commitment to support our mall-based retailers’ business strategies through technology while continuing to improve the overall shopping experience," said Ken Volk, chief marketing officer of Macerich, in the Deliv press release. "Same-day delivery is in high demand no matter how a purchase is made, and our malls can be the hub of distribution for in-store and online purchasing, facilitating convenience and immediate shopper gratification."

I'm skeptical that same-day delivery is the answer to years of decline for shopping malls. Can it help, especially during high-volume shopping trips typical during the holidays? Sure, but those events are, for the most part, few and far between. I just don't see much use in having a pair of jeans shipped to my house if I'm already in the store to try them on. I don't have any data to support this theory, but I'd argue the vast majority of consumers shopping in malls walk out with one or two items. It's not the grocery store where you're picking up a week's worth of food.

That said, what these mall operators are doing is admirable. They're not standing by and watching their businesses fade away into irrelevancy; they're taking steps to compete in today's on-demand, omnichannel environment. Whether it's too little too late is a whole other argument.