Digital Mall: The future of retail

From increasing sales in online trade, to changing consumer behavior, right through to growing customer requirements – digitalization poses major challenges for the retail sector. In order to remain competitive, stationary retailers need to adapt their concepts and processes to current trends. Shopping centers also have to recognize this transformation and rethink tried-and-tested business models. Alexander Otto has accepted this challenge. He heads the real estate firm ECE (Einkaufs-Center Entwicklung, shopping center development), which was founded in 1965 by his father, the mail-order pioneer Werner Otto.

Since then, the family business based in Hamburg has been developing, implementing, and managing inner-city shopping centers and realizing other real estate assets such as hotels, logistics centers, office and residential buildings. Today ECE is Europe’s market leader in the shopping center sector with 195 shopping centers under management and activities in twelve countries. Alexander Otto is certain: “The key challenge is the customer behavior. More than half of all purchase decisions are already being prepared at home.” The research automatically takes most customers to the large e-commerce providers, but not to the local shopping center – which is why online sales are growing and stationary sales figures are under pressure.

By means of the “Click & Collect” principle, the Digital Mall combines the flexibility and convenience of online ordering with the benefits offered by stationary retailers. Aside from picking up the products in a timely manner, the service offers the possibility of obtaining one-on-one advice in the store and trying products before buying. Thus the internet becomes a directory that leads customers to local retailers, as Otto explains: “As soon as the customer researches, the decision is made to order online or to go to a store. Now when you find the availabilities of your product at home in your local store, it will help to make a positive purchase decision in favor of your stationary retail store.”

Every second shopping center in Germany already has implemented the Digital Mall. The platform is to be installed at all German sites by 2021. In order for shopping centers to succeed on the market going forward, the company – aside from the online product search – is investing in innovative services for a more efficient, convenient, and entertaining shopping experience. “There are a lot of things that consumers want and they are interested in: they need to know exactly where the stores are in the mall, so digital wayfinding is a key service that we’re offering. They also want to park efficiently and also have some fun things like digital playgrounds.”

Thanks to “Easy to Park” for example, waiting at pay machines is a thing of the past. RFID, a technology for localization and automatic identification using radio waves, is used to open the parking garage barriers automatically – with fully electronic billing. And the customers of tomorrow are also considered: Digital playgrounds use LED floors and augmented reality cameras to playfully teach children about digitalization.