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General Growth linking all 136 malls to web

By Edmund Mander

General Growth Properties is putting its 136 malls on the Internet this summer, providing shoppers electronic access to its 15,000 individual tenants — and vice versa.

Not only will it enable shoppers to buy merchandise electronically from their local mall, but tenants will be able to use the Web site to gain access to shoppers for targeted marketing and a range of other activities.

"This is a revolutionary way of doing retailing,'' said Charlie Graves, senior vice president for General Growth's eBusiness. In an era when many have weighed the threat of Web commerce to stores, the developer and mall operator has looked the Internet in the eye and found a way to merge it with traditional retailing, he said.

"It's all about trying to unite the physical properties with the virtual ones,'' he said, adding that mall tenants will have considerable flexibility on how they use the Mallibu — pronounced "mall-ee-boo'' — Web site. Some might want to use it to advertise and promote themselves, while others will harness it to sell merchandise.

So how will it work? Customers wishing to visit any of General Growth's mall sites will first go to the company's Mallibu.com "portal'' — sort of an electronic gateway — which lists the developer's centers across the United States. Each mall site will contain a list of retailers who, in turn, will have their own sites.

People will be able to go from store to store accumulating merchandise, which then can be paid for and mailed all at once. Accumulated merchandise from different retailers will be shipped by Mallibu.com staff, although retailers will have the option of processing the orders for individual sales themselves.

Customers wishing to pick up items themselves can do that too — merchandise can either be put aside by retailers, or stored for collection at a central location in the mall.

Another advantage of the sites is that customers will have access to any General Growth mall they wish, and they will be able to buy items that might only be available in a particular region — say "Aloha'' T-shirts from a mall in Hawaii, or a cowboy hat from Texas. Moreover, they could get on their computers to buy gift certificates that a relative or friend on the opposite side of the country could use at her local mall.

For their part, retailers can use the Web site to let people know what is available at their local mall, and lure them in. But more than that, using what Graves calls "precision marketing,'' they can learn more about the tastes of individual customers, and contact them about new products and special offers.

"Now for the first time we'll know a lot more about the customer,'' Graves said, explaining that customers will have the option of joining a Mallibu.com shoppers club, where they can qualify for promotional offers and choose to be informed of future promotions on selected products. "Now we'll be able to market to their intentions.''

But won't the Web site divert customers, encouraging people to stay home rather than come browse the mall? No, insists Graves: It will free them up to browse more when they do come to the mall.

"People will use the Web for what they have to buy,'' he said. But Web shopping is no substitute for a visit to a mall, where merchandise can be seen, touched and tried on, he explained. "When I go to the mall, I'll be able to do what I want to do.''

Neither does Graves see Mallibu.com conflicting with tenants' existing Web sites. On the contrary, it will lead people to their stores. For all the hype surrounding the Web, retailers are, and will continue to be, primarily operators of brick-and-mortar stores, he said.

"Gap has probably 400 stores they're going to open this year; online is just a fraction of their business,'' he said.

General Growth, which Graves said is the first developer to integrate its malls with the Web, plans to launch the site in June. At press time, the Chicago-based developer was planning to invite its tenants to a presentation of the program, and was not releasing the names of retailers who already have signed on. The company also declined to reveal the cost of the project.

General Growth is partnering with San Francisco-based Web site developer Organic Inc., and Pandesic of Santa Clara, Calif., an Internet business services firm.

The mall Web site concept is a good one, but making it work will be a challenge, according to Seema Williams, a senior analyst for online retail at Forrester Research, an independent Internet and technology research firm based in Cambridge, Mass. Convincing significant numbers of people to use Mallibu.com, and using it to influence their buying decisions, will be difficult, even if the Web site is heavily promoted in General Growth's malls, she said. People inclined to buy over the Internet will more likely be diverted to retailers' existing Web sites, and away from Mallibu.com.

Moreover, many retailers will not be ready this summer to handle the considerable impact that Internet shopping imposes on inventory control, Williams added.

"They're definitely headed in the right direction,'' she said. "But it's going to cost them a fortune to pull it off.''

But with 35 million people, 1.2 billion visits to General Growth malls each year, and with each mall spending millions of dollars a year on marketing, the company is in a good position to leverage the program, Graves said.

"That's a lot of people," he said, although he acknowledged that it will be a challenge to get those people to start using Mallibu.com.

While General Growth might be the first developer/operator to develop an in-house system for getting its properties onto the Web, Woburn, Mass.-based Eversave.com launched a site in November that it claims eventually will link consumers to malls and stores across the country. (See story, page 242.) This year the company signed a contract with Vista, Calif.-based REIT Pan Pacific Retail Properties to list the company's 58 shopping centers and 1,400 tenants.

"We're all about driving consumers back into the centers,'' said Jere Doyle, president and founder of Eversave.com, shortly after the contr act was signed.

"Our long term goal is to build a network of retailers, media and landlord relationships nationwide; by this time next year we'll be in every neighborhood in America.''

Stores that have so far signed up with Eversave.com include Best Buy, CVS, Circuit City, Linens-N-Things, Pearle Vision, Radio Shack, Sears, Staples and Toys 'R' Us.

Like Mallibu.com, Eversave.com enables retailers to tailor their marketing for individual customers, and gives them the option of using promotions to lure people to the mall. Unlike Mallibu.com, however, customers wishing to use Eversave.com must register to use it.

General Growth will be demonstrating Mallibu.com at May's annual ICSC Spring Convention in Las Vegas, Graves said.