Two Internet service companies cashing in on web-based solutions are coming at the blazing hot market from different directions.
Denver-based Mallfinder Network creates and updates malls' basic details on their websites, promotes sales for client malls and provides an online gift search service.
A company called i-gift.com provides a website gift certificate service, which transacts purchases at mall client stores and arranges deliveries (see sidebar on page 94). Both companies have sprung up within the past three years, and both say they are expanding rapidly.
"We make it easier for traditional shopping center portfolio owners to divine and deliver their e-commerce strategies and solutions by making sure the website information is current and accurate," says Brian Hayashi, founder and CEO of Mallfinder. "There is nothing worse than seeing a Christmas sale sign in January."
Mallfinder's call center works mainly with property managers who provide signage, security, marketing and other services to tenants, Hayashi says. "We're simply applying that same principle online, offering a way for retailers to access these services rather than build them themselves, which reaffirms a lot of the core value of the mall to retailers," he adds.
With e-mail becoming as "ubiquitous as a telephone number," he says, retailers will need an online presence. "So our philosophy is really molded around how to develop brand equities and capabilities associated with individual pieces of real estate, to get consumers to know the properties in their neighborhoods - rather than being a generic shopping center guide."
Mallfinder handles the day-to-day nuts and bolts of maintaining an Internet site, Hayashi says. "We make life easier for marketing managers because we're more conversant with the Internet," he says. "We understand how to do HTML code, for example. They have better things to do."
Hayashi emphasizes the value of branding by online marketing: "It's a really important resource that can help shopping center managers understand how their website works, help retailers maintain their long-term relationships with centers, and register what a shopping center brand means to consumers, all in an online context."
Branding is so integral to Mallfinder's services that the company recently hired Erika Rocher, whose former job at The Coca-Cola Co. was to help large chains sell more of its beverages. The challenge is the same for shopping center clients - helping retailers sell more efficiently to consumers.
Major players logging on Considering the Internet's potential, one might assume that large shopping center owners and managers would have creative in-house website capabilities, that Mallfinder clients would tend to be medium-sized and smaller.
Not so. They are typically the property management divisions of major shopping center portfolios, including The Rouse Co. and Urban Retail Properties.
Rouse, for example, retained Mallfinder Network last September to help develop its Premier Shoppers' Club, launched in November, and a uniform website program that would straddle Rouse's quite different urban and suburban properties.
The program included testing consumers' reactions and responding to their suggestions about how to elevate the shopping experiences in Rouse centers. "Internet technology allows us to determine why people would want to visit a center, then create more opportunities for where consumers want to be," Hayashi says.
"Shopping center managers, over the long haul, have to make sure people feel great about going there, that the tenant assortment is of a type and consistency that strikes a chord with the local population," he adds.
Consumers have to know intuitively what a local shopping center is all about, not by remembering the entire store roster, but by knowing several of the stores they like to shop. It is in the best interest of all parties, Hayashi says, to make sure the customer has a good experience at the center.
Starting up in cyberspace Hayashi had an interest of his own when he started Mallfinder in mid-1997. By November that year he had a pilot program ready for Brandon Town Center in Tampa. By early this year Mallfinder was working with 72 properties across the United States. Hayashi expects to sign up another 30 properties by May 1.
The day of shopping online at malls is not far off. And when that happens, Mallfinder, which as Hayashi puts it, has been "down in the trenches," will move up to the front lines.
Nobody will ever be able to accuse i-gift.com of fumbling the ball. After all, the company is owned by basketball superstar Isiah Thomas, former NBA Detroit Pistons player and part owner and manager of the NBA Toronto Raptors.
I-gift.com offers shopping centers an online, round-the-clock gift certificate service, backed up by a $2 million, custom-designed Linux database, printing and fulfillment computer system. The service was launched just in time for the 1998 Christmas season, and it didn't have to wait too long for results. Richard Steinnon, president of the Birmingham, Mich.-based operation, says its gift certificate sales tripled over the past two holiday seasons.
Given the proliferation of Internet applications, the timing was perfect. "It's for major shopping centers and downtown districts that want to use the Internet to drive customers into their brick-and-mortar centers," explains Steinnon, who left PriceWaterhouseCoopers to head up i-gift. "It was our vision of a first step in facilitating many different instruments over the Internet."
Here's how i-gift.com works:
1. A consumer wants to use the Internet to buy a gift certificate, which the recipient can redeem at a favorite mall. Or a corporation wants to reward a deserving or retiring employee.
2. The consumer logs on to the website of one of the malls in the i-gift.com circuit.
3. The customer then clicks on "purchase gift. The i-gift.com" back-end engine," which can spit out 3,000 gift certificates a day, kicks in. The shopper fills in the billing address and credit card details, and either indicates a specific store, restaurant or cinema, or makes it open-ended for that mall.
4. After the purchase is authorized, i-gift.com prints a customized gift certificate on gold or purple paper with either the store'sor mall's logo, or Christmas trees and other seasonal motifs. For another $4.95 it can be dressed up in gold and purple wrapping and popped into a box along with a chocolate.
5. The gift certificate is then couriered, sent by certified mail overnight or within two days to the recipient, who has a year to spend it. If the recipient spends less than the amount of the certificate, change is paid in cash.
Recipients obviously benefit. So do shopping centers in that Internet loop that can count on more traffic and possibly some impulse-buying - and at no cost. "It's a branding and marketing tool that brings people to their malls," Steinnon says.
Moreover, i-gift.com designs and maintains the center's website, tracks and fulfills orders, and promotes the service, also at no cost to center owners.
Isiah Thomas and friends encourage corporations to set up an account with i-gift.com and use its gift-finder service. The service offers gift solutions based on gift-givers' relationships to recipients as well as factors such as gender, age, hobbies and interests, the occasion and price range.
Tracking current and past orders is a given, but i-gift also offers consumers a personal address book and personal calendar, with an automatic e-mail reminding clients that a gift is due.
So, what does i-gift.com get out of it? "We're in the same business as American Express travelers' checks," Steinnon says. "There is a lag, about 55 days on average, between the time a gift is purchased and when the certificate is redeemed. We invest those funds in short-term, secure instruments and earn interest."