E-commerce ban for shops as mall fears trade loss
Friday 26 November 1999
Has the next recession hit? No. What they are fretting about in St Louis is the Internet and the notion - exaggerated or otherwise - that the time will come soon when e-commerce will rule. When nobody will bother tramping around shops but will instead buy almost everything online.
Such is their anxiety that the Galleria owners have taken an unprecedented step: they have barred all their tenants from promoting their websites or anything to do with the Internet on the premises. Anything that might direct customers to the web is to go. No www addresses on shopping bags, no stickers on windows, no posters or signs guiding shoppers to cyberspace. Industry experts are now watching to see whether other malls in the United States will follow suit.
It is unclear, however, whether the Galleria can make the ban stick. At least one of the shops, The Right Start, which specialises in educational toys, has said it will sue to overturn it. The Gap, which has five shops in the Galleria, said it might also take legal action. "We think the Internet is a positive advertising tool that actually drives traffic to the stores," a Gap spokeswoman said.
Retailers can assume they will get the income either way, whether it comes via the Internet or over the counter. For mall businesses, however, the issue is more urgent. "It is important that we protect our interest while initiating important dialogue," a spokesman for the Galleria said.
While Internet shopping in the US still represents only a fraction of overall retail sales, it is growing rapidly. Jupiter Communications, an Internet consultant, predicted this week that, this month and next, Americans will spend $6bn online, compared with $3.1bn last year. Moreover, it is often the wealthiest shoppers that turn to online shopping, leaving the less prosperous in the malls.
Another study, by the NPD group, offers mall owners some consoling news; Americans are loathe to buy clothes via the web. Nearly half of all Internet users told NPD that they would never buy clothing online.
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