Lessons Learned©: Westfield Corporation (Adapt from other industries)
It was reported yesterday that Westfield Corporation, which operates 32 large U.S. malls is looking to startups to spur innovation. They are concerned with the perception that online retailers are capturing the eyes (and pocketbooks) of consumers, thereby eroding their market dominance and ultimately profits.
However, the vast majority of retail purchases continue to take place in brick-and-mortar stores.
Regardless there is still a lot of opportunity for innovation. The company’s Labs division engaged 10 young companies to a program that it hopes results in pilot tests between them and retailers in a startup accelerator model.
While this strategy, I believe, is a good start for such stodgie industry players as Westfield, I believe they haven't thought this through enough. Let me propose a better idea (and thereby a lesson learned): Adapt from another industry. In this case, live sports broadcasters.
In a world where almost every type of broadcast is being eroded, time-shifted, streamed in alternative media, other, live sports broadcasts are enjoying a dramatic increase in revenue due to their unique product that they control dissemination over. So, the idea:
Provide space in (certain to be) vacant stores for "startup" retailers. Rent is free. The mall operator takes a piece of revenue and/or equity in the retailer. Here's the catch - the startup retailer can ONLY sell their product at that mall.
Why and how does this make sense?
- Creates uniqueness - this is the only place to find this new or unique product
- Creates a destination - by creating a unique buying opportunity, by default, consumers must go to that mall to purchase that product
- Creates a very high barrier to entry (competition) - no longer can online retailers offer the same thing, for less, without (many times) collecting/paying sales tax . If a consumer wants this product, they cannot find it from others.
I am sure there are other reasons why this makes sense. If you think of some, email me: email@example.com