Westfield Labs wants to merge physical and digital shopping

Bringing digital into malls boosts physical sales, rather than kills them

WIRED Retail
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Contrary to popular belief, the future of retail isn't online. Neither, according to global mall operator Westfield's Antony Ritch, is it in brick and mortar stores. Rather, he predicts the two sectors will merge into one indistinguishable whole.

Ritch heads up Westfield Labs, the digital development arm of the physical retail giant. The group's mission statement? To integrate the best in fashion, food, leisure, entertainment and digital technology, partnering with the world's leading retail brands to adapt to a rapidly evolving sector.

"One thing that I do know is that 100 years from now, we'll be looking back and think 'it was so obvious', the challenges that were coming at us," Ritch said on the WIRED Retail stage. "But it's exciting, a world of change."

Ritch is currently in the UK establishing a "cross-company task force", centred on transforming Westfield London as a global test centre for its digital/physical initiatives.

Westfield Labs was set up four years ago as a way to bridge the growing gap between physical and digital, and connect retailers and tech companies in its shopping centres. What Ritch and his team envisage is a time when changes in how we shop are fuelled by data.

"People are social beings, we enjoy connecting with family and friends, but also brands and experiences," Ritch says. "The rules of economics still apply – supply and demand, competitive advantages, these all play out and we need to start thinking about how new technology is going to enhance that."

The pitch is simple, and already within reach. Imagine getting to the mall and receiving personalised greetings, with notifications and targeted deals based on your shopping history for stores in the centre. You could shop online through your phone, then instantly pick up a purchase from a store mere metres away. Stores could even notify you when you're in the vicinity when something on your wish list is on offer.

"It's not about competing with digital or pushing back against it, it's thinking about how do you use it to enhance these experiences," Ritch says. "At Westfield, we've always been a host, a marketplace where retailers, brands and customers all come together. We're social environments where friends and family come out to enjoy a day of shopping, dining, and entertaining, and we see the digital world in the same manner."

"It's not about online versus offline. Shoppers don't actually differentiate themselves that way, they just call it shopping and go about it any which way."

"When a customer buys online and picks up in store, is that an online sale or an offline sale?", Ritch asks. "When a customer goes and tries on some shoes but wants them in a different size, then orders through an in-store kiosk, is that offline?"

Ritch's team increasingly believes the distinction doesn't matter. "We believe the way forward for our business is to embrace our role as a matchmaker, creating a platform that connects our retailers, brands, and customers across all of our properties."

It's almost clichéd to say, but brick and mortar retailers increasingly need to embrace shopping as an experience – something Ritch thinks the canniest are already doing.

"Apple is probably one of the most productive retailers on the planet today," he gives as example. "Every single one of their products, we know very well that we can buy in a complete experience online. But we don't – we go to the store, because they offer such a fantastic customer experience."

The reverse also holds true, with Amazon – perhaps the paradigm of ecommerce retailers – moving into physical space, opening brick and mortar bookstores. "Why? Because it's good business. It's what the customer wants," Ritch says.

Moving forwards, the two realms will become ever more closely linked, particularly as technologies such as virtual reality, augmented reality, and full-body scans of customers further blur physical and digital shopping.

"Technology is exponentially converging. I'm really, really excited," Ritch says. "We see that magic come to life every day in Westfield, whether it's in London, San Francisco, Milan, or the heart of Silicon Valley."

"Our customers are now, and as they should be, in control of that entire experience," he continues. "They have their phones, and 80 per cent of all physical sales are influenced by the internet. It's an online/offline pendulum that's just started swinging, but it's going to find its equilibrium. Watch that pendulum."