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Your Local Mall, Re-digitized

This article is more than 9 years old.

As part of the never-ending battle for the consumer dollar, General Growth Properties , which owns some 120 high-end malls through the U.S., has recruited RetailMeNot to its side.

Under a new agreement the two announced on Tuesday, the digital coupon provider will roll out various wireless and marketing technologies in GGP's malls to target shoppers with a coupon or news about a sale or some other relevant content.

It also plans to start testing beacon technology that will turn those targeted offers into "hyper-targeted offers".

As far as retail technology goes, this is fairly cutting-edge. Briefly, iBeacon is an indoor positioning system based on Bluetooth Low Energy technology that Apple has developed that can send relevant information--including, most enticingly, targeted ads--to a mobile device. It was part of iOS7, but has been overlooked by marketers and retailers until recently.

But as far as the big picture goes, GGP's and RetailMeNot's arrangement is actually pretty tame stuff, at least compared to current thinking in the brick-and-mortar retail industry on how to stay competitive with the e-commerce juggernaut. Because that, at bottom, is what this is all about.

To be fair, GGP has been, like its competitors, hard at work trying to crack the stubborn nut that online commerce has become and RetailMeNot is a very worthy provider of this technology.

But it is now generally understood that the way to keep shoppers in malls is not merely to appeal to their inner coupon clipper.

Rather, retail centers must be "destinations" for shoppers, where they can enjoy multiple "experiences" ranging from entertainment to fine dining to even a quickie medical appointment. (Urgent care and walk-in clinics are becoming popular tenants in many shopping centers). They must be light and airy and modern-looking, offer Wi-Fi and possibly even concierge service.

With such lofty ambitions retail centers hope to rise above the fray of such unfortunate developments as showrooming and the absence of federal legislation giving states the ability to collect online sales tax from e-tailers.

And you know what? There are signs it is working. To be sure, e-commerce sales are still on a faster growth trajectory than traditional retail sales, but the competition has lit a fire under storeowners such as GGP and Simon Property Trust and Macerich , another REIT that owns retail centers.

Some examples of what is brewing in this space:

If You Can't Find It, Have Someone Build It

Last month, Simon Property Group, a competitor REIT to GGP, announced it would launch a new business called Simon Venture Group, to invest in what it described as retail innovation "focusing on technology opportunities that enhance the shopping

experience."

The company didn’t provide examples of what it has in mind, but it is clearly hoping to push some envelopes in this space.

"We believe we have only scratched the surface on applying technology to the retail environment in innovative, interesting ways," said Mikael Thygesen, chief marketing officer of Simon Property Group, when the deal was announced.

Simon has recruited venture fund executive J. Skyler Fernandes to make the investments.

Same Day Delivery and Other Distribution Strategies

Retail centers are eying such services as same day delivery for orders placed online (!) and similar mash-ups. A start up called Deliv, which uses crowdsourced couriers, has been tapped by Simon, GGP, Macerich and Westfield to offer customers this service.

It’s a clever exploitation of online commerce's main weakness (the shopper wants her stuff right now) and the mall's best advantage (it is a 20 minute car ride away). Other retailers have toyed with similar concepts for the same reasons.

At a recent conference organized by the International Council of Shopping Centers, panelists raised an interesting point, though, illustrating that many of these solutions are still a work in progress.  What cut if any, it was asked, does a mall owner get from an order placed online? Stayed tuned, the experts said.

All Omnichannel, All the Time

In industry speak this strategy is referred to as an omni-channel approach.

When GGP's CEO Sandeep Mathrani told shareholders that the REIT had signed on with Deliv, he said that "initial results look promising" and then went on to discuss what the omni-channel means for a brick-and-mortar retailer. To paraphrase Mathrani, it involves pairing a store's physical locations and its network with a robust online operation, all to create an uber distribution operation that services the customer no matter if he wants to go online or shop in person.

The industry is seeing signs of this everywhere it seems, with the latest example courtesy of Gap Inc. The retailer just announced that later this year some store shoppers will be able to place orders for its expanded online offerings.

It will also expand its reserve-in-store service to all Gap stores in the U.S. by the end of the second quarter. This service lets online and mobile customers reserve items in Gap and Banana Republic stores, so they can try them on and, hopefully, buy them and take them home. That, after all, is all the retailer cares about—getting the product into the shopper's closet one way or another.