A Philadelphia-based mall owner is taking a proactive approach to the digital shift and back-to-school shopping. PREIT (Philadelphia Real Estate Investment Trust) is curating its first eCommerce offering in what it says is a unique avenue to engage consumers from a multi-retail perspective.
Called sMALL Surprises, the curated box of goods from several of PREIT’s mall properties is a nod to subscription-based boxes, as well as one of the first examples of a REIT acting as an online vendor. It’s also a way to jump-start what has been by all accounts a very slow start to the back-to-school shopping season, and an invitation to parents who have been staying away from physical mall shopping due to the pandemic.
“The inclusion of products from various mall tenants in the program will create a new stream of sales and customers for stores, as well as drive awareness and brand recognition,” said PREIT in a statement. “For shoppers, the pack creates an element of surprise during a stressful season with hand-selected products at a discount, and mall offerings they may not have otherwise sought out. In addition, the initiative offers shoppers the benefit of a mall’s collection of brands from the comfort of their home, particularly for time-strapped families.”
Each sMALL Surprises pack includes a selection of sensory toys/games, trendy accessories, sanitizing samples, activity cards, stickers and school supplies. Consumers can visit SmallSurprises.Shop, access a questionnaire and then select a customized pack to be delivered anywhere in the United States. In that way, the initiative puts PREIT in a position to sell outside of its Northeastern territory.
“PREIT is proud to be the first in the mall industry to launch this type of initiative, and we’re excited about the unique advantages this inaugural eCommerce endeavor will bring to our shoppers, tenants and investors,” said Joseph F. Coradino, CEO of PREIT. “PREIT has long been evolving the experience we bring to our communities, remaining laser-focused on innovating at rapid speed through times of change. This cutting-edge initiative provides surprise and delight to our shopper community during these uncertain times and helps ease the return to a vastly different school year, while also driving sales and awareness to our retailers, highlighting the unique products they offer.”
Similar to most mall-based REITs, like Simon Properties and Brookfield Properties, PREIT has had a brutal year so far, as the pandemic mandated store closings through June and caused a decrease in foot traffic. PREIT recently reported that its Q2 revenue decreased by 36.6 percent compared to 2019. The quarter saw a decrease in revenue of $20.1 million “resulting from bankruptcies and related store closings, [and] an increase in credit losses for challenged tenants.” Its total occupancy rate was 92.4 percent, with non-anchor occupancy declining by 40 basis points.
While the back-to-school promotion is the first for PREIT, it has supported its merchants in other ways during the pandemic. When it first became evident that the pandemic would affect its businesses for the long haul, it launched a “Shop Local” initiative in late April that enabled eCommerce capability for its tenants on all of the company’s pages. Twenty-eight percent of PREIT’s portfolio consists of local and regional tenants.
“Smaller businesses often don’t have robust digital marketing budgets, and therefore aren’t able to let consumers know they are continuing digital operations,” noted Heather Crowell, executive vice president of strategy and communications at PREIT. In a trade publication. “We are able to assist by sharing these small businesses with our audience of over one million people through our digital channels, in hopes of assisting in sustaining their business through online sales until our properties are able to reopen. Local and regional businesses help shape the shopping experience at each of our properties and lend value to our portfolio.”