No ETA for the Mall of the Future: Westfield Rebrands Digital Labs Unit

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A digital storefront from Westfield Labs
A digital storefront from Westfield Labs

When it debuted five years ago, Westfield Labs, the digital innovation arm of mall owner Westfield Corp, was hailed as a disruptor, expected to help create the much-hyped mall of the future and named as one of Fast Company's most innovative companies of 2015. That future, it seems, still has a long time before arrival.

Westfield is rebranding the San Francisco-based unit into Westfield Retail Solutions and reorganizing its operations. Though the division will still strive to create a seamless experience between Westfield's 35 physical shopping centers and its digital platform, the real estate company is also consolidating its data and analytics, business development and information technology under the same department. The department previously functioned as a type of nimble startup, testing various tech experiments like digital storefronts, beacons, free Wi-Fi and electronic parking assistance.

Don Kingsborough, who formerly worked at Paypal and has been a Westfield board member since 2014, now serves as president of the Retail Solutions unit, a newly created position that began last summer. Kevin McKenzie, who had led Westfield Labs, left the company in October, according to a Westfield spokeswoman. She noted that over time, the evolution of Westfield Labs into Westfield Retail Solutions will take place; the website has yet to be rebranded.

"Westfield is committed to helping physical retailers understand who their customer is before they walk into a store, what they are interested in buying, where they generally shop and where they have their packages sent, creating customer insights for the physical world previously only available in the digital world," Mr. Kingsborough said in a statement at the time of his appointment last year.

The decision by $27.7 billion Westfield to reorganize its innovations unit into less of a testing lab and more of a structured enterprise hearkens back to the dilemma plaguing it and all of its ilk—how to reconcile today's digital shopper needs with millions of square feet of physical store space. With the loss brought on by key anchor tenants like Macy's and Sears closing hundreds of locations and foot traffic in decline, mall operators are continually trying to reinvent themselves by finding alternative revenue streams.

"Every mall is working hard to see what the future looks like," said Erin Armendinger, a retail real estate consultant who has previously worked at mall owner General Growth Properties. "Everybody knows they can't just stay in place. They know the consumer's changing and they're trying to figure out where they're moving and how to get there. It's really difficult."

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