Westfield to Build Virtual Mall

Australian mall giant Westfield has got something interesting up its sleeve. It's making a pretty aggressive push into online retailing, at least in Australia. One has to wonder if it has plans to bring the concept stateside should it find success.

The plan? Westfield is creating a virtual shopping mall and talking with tenants to take space on the site.

The concept of virtual shopping centers has been tried repeatedly and never really caught on. How do you browse a virtual mall? Would you really want to? I think one of the things we've learned with the rise of online shopping is that consumers have different kinds of behaviors when shopping online than when coming to malls. Online, people tend to buy things that they don't need to touch and feel. They do more comparison shopping. And they usually know what they want before starting and search just for that item. There isn't as much impulse buying going on.

In contrast, in person people browse and window shop and make more impulse purchases. They have to pass by other stores to find what they are looking for and can be enticed to make other acquisitions. And in many cases consumers aren't looking for anything in particular but searching for bargains or "hidden treasures." It's about the experience as much as it is the purchases. And shopping at malls is a social experience as opposed to shopping online, which is generally solitary.

The story notes that even Westfield itself explored the concept of a virtual shopping mall about a decade ago and eventually scrapped the idea. Apparently it thinks it is time to give the concept another go.

However, the details of what Westfield is doing exactly are all a bit hazy. It sounds like what they're developing isn't exactly a virtual shopping center. Ultimately what Westfield is envisioning may be about driving traffic to its centers as much as it is about generating online sales. It also sounds like it potentially be about developing new tenants--finding online concepts that it can promote and then groom to the point where they may want to build physical stores. Or maybe it's about developing relationships with tenants that solely operate online and using Westfield's brand as a way to give those tenants additional exposure.

In that last regard Westfield is far ahead of most U.S.-based mall companies where consumers are only vaguely aware of the companies that operate the centers. Westfield has been diligant about plastering its name on all of its properties. That means it has some brand credibility that can carry over online. It's a much easier leap for a consumer to go to Westfield's site, since they've seen the name before, than it is for them to go to Simon's or General Growth's.

Still, I'm skeptical. I think the future for mall owners online is to find ways to drive traffic to centers through social media, email, texting and applications and to enhance the in-person shopping experience with services and additional apps that customers can access while physically at a property. It's not about replicating malls. We laid out our vision of what that might be like in our Jan.-Feb. issue.

Here is the firm's thinking on the matter:

It is understood the online mall will be led by fashion, which the company sees as its strongest attraction, and split into categories including electronics and books.

The website will be revamped to allow customers to make payments. It already allows users to shortlist items of interest but, to buy goods, shoppers still must go to a mall.

Shops that already have an established online presence may want to integrate their shopping trolley with that of the retailing giant. The majority will be virtual tenants, simply collecting and processing orders from the additional online point of sale.

It is not yet certain if retailers will pay rent on the site or if their inclusion will be covered by a sales commission. It is understood Westfield will not fulfill orders, leaving that to retailers.

Westfield declined to elaborate on the plans.

''It's true to say there's activity happening,'' said a spokesman, Mark Ryan. ''The fact is that we continue to develop our internet technologies and our relationships with retailers.''


Westfield ran a successful promotion via Facebook before Christmas to prove it could generate strong visitation to its website.

Alan Long, the research director of the online metrics company Experian Hitwise, said the challenge now would be to maintain a high level of visitors.

''Like a physical store, it's all about generating traffic to justify rents,'' Mr Long said. ''The difference is that the social nature of shopping in a physical world is not easily replicable online.

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