Mall's well as Westfield goes online retailing

THE MAJOR anchor retailers David Jones and Myer are notable absences in Westfield's newest shopping mall. Australia's largest shopping centre operator yesterday unveiled the country's first online mall, with more than 50 retailers, including non-Westfield tenants.

By InvestSMART · 18 Nov 2010

By InvestSMART ·
18 Nov 2010

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Westfield Group's managing director, Steven Lowy, said

106 retailers had signed with the site, which would allow Australian consumers to purchase from multiple stores with one credit card transaction. The balance would come online gradually.

Westfield is looking to the new venture for additional income

from rent and sales commission

but its primary aim is "connecting customers with exciting ways

to shop".

Mr Lowy said the move was both "defensive and offensive" in a retail market that was increasingly going online. "We don't really believe we are in the mall business. We're in the business of serving customers," he said.

He declined to reveal the fee charged on the site but said it was the opposite of the bricks-and-mortar model, in which the landlord receives more than 90 per cent of the income from fixed rental and less than 10 per cent from sales commission.

The electronics retailer JB Hi-Fi, the fashion brand Leona Edmiston and the online store SurfStich.com are among those represented. Mr Lowy said he was not disappointed by the absence of the majors.

"Of course we will have discussions with David Jones and Myer but they are looking at their own operations, their own approach

to their e-tailing strategy ... as we are looking at our e-tailing strategy," he said.

He declined to reveal how much the group had invested in the online mall, having shelved plans for a similar concept eight years ago.

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Frequently Asked Questions about this Article…

What is Westfield's new online mall and why does it matter to investors?

Westfield has launched what it calls Australia’s first online mall, an e‑commerce site representing multiple retailers (initially more than 50, with 106 retailers signed overall). For everyday investors, it signals the group's move into digital retailing to capture online sales and diversify income beyond physical shopping centres.

Which retailers are participating in the Westfield online mall?

Westfield’s online mall includes a mix of tenants and non‑Westfield retailers. The article names electronics retailer JB Hi‑Fi, fashion brand Leona Edmiston and online store SurfStich.com among those on the site, with plans to bring more retailers online gradually.

Why are major department stores like David Jones and Myer absent from Westfield’s online mall?

David Jones and Myer were notable absences from the launch. Westfield managing director Steven Lowy said he wasn’t disappointed, noting those majors are pursuing their own e‑tailing strategies and that Westfield will have discussions with them in future.

How does the online mall handle customer payments across multiple stores?

Westfield’s online mall allows Australian consumers to purchase from multiple stores with a single credit card transaction, simplifying checkout across participating retailers.

How does Westfield expect to make money from the online mall?

Westfield is looking for additional income from a mix of rent and sales commissions on the online mall. The company said the fee structure is the opposite of the bricks‑and‑mortar model (where landlords receive more than 90% of income from fixed rent and less than 10% from sales commission), but it did not disclose exact fees.

Did Westfield reveal how much it invested in building the online mall?

No. Westfield declined to reveal how much it had invested in the new online mall. The article also notes the group had previously shelved a similar concept about eight years earlier.

Did Westfield describe the strategic purpose of launching an online mall?

Yes. Steven Lowy described the launch as both a defensive and offensive move in an increasingly online retail market. He emphasised Westfield’s aim is to serve customers and connect them with new ways to shop, not just to operate malls.

Will all retailers move online immediately and what is the rollout plan?

No. Westfield said the balance of retailers would come online gradually. While 106 retailers had signed with the site, not all stores were part of the initial launch and the platform will expand over time.