PALM BEACH, FL – It seems that one of the biggest mall owners in the U.S., Simon Property Group, is getting ready to take their physical shopping mall and real estate business online, likely before their physical malls completely empty out.
Simon, which owns 235 malls and premium outlet centers across the globe has been testing two ‘beta’ sites called “PremiumOutlets.com” (SIMON PROPERTY GROUP, L.P. ) and “ShopPremiumOutlets.com” (SHOP PO, LLC.) since about March; they teamed up with a technology company called the “Rue Gilt Groupe” in order to form a new entity which Simon will hold 50% interest in to get the job done.
Simon hopes to collect affiliate commissions from their online stores.
CNBC’s Squawk Box co-anchor, Rebecca Quick asked very good questions as we are at a time when most brands are trying to build their own digital footprints to reach their client base.
Why do the brands want to go through you guys, because I talk to a lot of the brands now and they would rather go direct to consumer, and cut out the middleman?”Squawk Box co-anchor, Rebecca Quick
Michael Rubin, CEO of Kynetic, the parent company of the e-commerce business which will be responsible for building out the sites and own the remaining interest, responded with something which seemed a little less believable:
Yea, and we look at this as direct to consumer, we look at us as hopefully the most important marketing channel to them long term. What brands really want to do is exactly what you said build their own direct to consumer business, and if they can list their excess merchandise in a marketplace and then pay us a commission on that, there is nothing better for them.”Michael Rubin, CEO of Kynetic, parent company of Rue La La – Gilt Groupe
Sounds like a bunch of nonsense to me to tell you the truth. This is about survival, not about making a better shopping experience for consumers. Rebecca Quick is a real straight shooter and did a good interview with these two bringing up the most obvious and valid questions.
Just this past Sunday evening fashion retailer, “Forever 21” headquartered in Los Angeles, announced it was filing for Chapter 11 bankruptcy protection and expecting to close nearly 200 locations in the U.S.
According to Simon’s latest quarterly report, Forever 21 was its seventh-largest tenant and currently owes the real estate company $8.1 million.
About The Author: John Colascione is Chief Executive Officer of Internet Marketing Services Inc. He specializes in Website Monetization, is a Google AdWords Certified Professional, authored a ‘how to’ book called ”Mastering Your Website‘, and is a key player in several Internet related businesses through his search engine strategy brand Searchen Networks®