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Shopping Centers Today -> April 2001
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MERCHANTWIRED FORGES NEW LINKS
By Dave Bodamer
MerchantWired, the high-speed broadband venture backed by seven regional mall operators, continues to plow ahead with its wiring efforts. The company said it has reached agreements with five national retailers and has unveiled several new alliances and services.
As of early March, MerchantWired (SCT, October 2000) had fully wired 300 regional malls as well as every store and the national headquarters of American Eagle Outfitters, New York City, and athletic shoe store Finish Line, Indianapolis. Fifty other regional malls are in the process of being wired. According to company officials, three other retailers have signed on but have not yet been announced, while seven more retailers are close to signing on.
American Eagle operates 538 stores in 46 states and Finish Line has 435 stores in 42 states.
The company’s goal is to have 20 stores per wired mall take advantage of some aspect of what MerchantWired provides by the end of this year. The basic benefits that retailers receive include quicker credit card transactions, fast Internet access and the capability to conduct long-distance phone calls over the Internet.
“Retailers are now running on a credit card backbone that gets two- to five-second authorizations,” said MerchantWired President James Giuliano. “It accelerates checkouts and cuts down on dial-up costs.”
Other plans for the year include rolling out applications for retailers that would be available on a subscription basis. Such applications could include tools for tracking sales and managing inventory. The company is attempting to position itself as a top provider of Internet hardware and applications specific to the retail real estate industry. It even has the capability to host a retailer’s networks on servers at its Indianapolis headquarters. Moreover, the venture expects to wire up to 400 more shopping centers during 2001.
The company is majority-backed by Simon Property Group, Indianapolis, with funding from Taubman Centers, Bloomfield Hills, Mich; The Rouse Co., Columbia, Md.; Rodamco North America, Chicago; Westfield America, Los Angeles; Westcor Partners, Phoenix; and The Macerich Co., Santa Monica, Calif. The combined group is putting $140 million into the venture. Giuliano said that the company is in contact with about 12 other mall owners interested in joining the venture and that announcements were expected later this year.
MerchantWired officials have been busy in recent months forging partnerships with other companies in the hope that they will result in the venture’s long-term success. In late January, the company signed a multiyear, $100 million contract with AT&T to use the telecommunication company’s high-speed wiring backbone in all of MerchantWired’s malls. The deal also enables MerchantWired to adapt and remarket some of AT&T’s services — including Internet access, digital subscriber lines and virtual private networks — to retailers using MerchantWired’s service. MerchantWired also signed on with Found Inc., San Francisco, to use that company’s Integrated Clicks and Mortar service aimed at helping retailers integrate online and offline businesses.
Lastly, the company has teamed with ACI Worldwide, Omaha, Neb., a company specializing in electronic payment technologies, so that MerchantWired can bring that capability to its subscribers. The technology will enable retailers to process transactions more quickly and allow them to monitor buying trends and track merchandise at the same time. The system will be available on a subscription basis and will not require further hardware installations.
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