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Retail Law Advisor

Lift Off for Commercial Drone Regulations

Posted in Retail, Technology

DronesDrones are everywhere. Technological innovations have created countless commercial opportunities for drones, also known as unmanned aerial vehicles (UAVs). Until recently, however, the Federal Aviation Administration’s (FAA) prohibitions on drone commercialization have contrasted starkly with the soaring growth of drone-based businesses in Europe, Asia, and other parts of North America.

Now, depending on whom you ask, the FAA either has taken a significant step toward allowing commercial drones in the national airspace, or has proposed restrictive regulations that will stifle innovation and impede the deployment of drone-based services in the United States.

On February 15, 2015, after years of delay and the disclosure of leaked documents, the FAA released proposed regulations for commercial drone use. Following a 60-day public comment period and public meetings, the FAA expects to release final regulations that will become effective in 2017. Key points in the FAA’s proposed regulations include:

  •  Only daytime flights are permitted.
  • An operator can operate only one drone at a time.
  • Only line-of-sight flights are permitted; a drone operator must be able to see the drone unaided.
  • Drones must operate in a “sterile environment,” which means they cannot operate over any person not involved in their operation.
  • Drones must weigh no more than 55 lbs. and cannot carry external payloads.
  • Drones are limited to a maximum airspeed of 100 mph and a maximum altitude of 500 feet.
  • Drone operators are not required to obtain a private-pilot license, but must pass a written examination.
  • Commercial drones must display an FAA identification number, but airworthiness certification requirements are not required.

Although these proposed regulations are less onerous than many had feared, they still impose significant limitations on permitted commercial drone applications. For example, by forbidding external payloads and requiring line-of-sight flights, the proposed regulations would thwart the drone package-delivery services touted by Google and Amazon. Nonetheless, these regulations permit the commercial use of drones for agricultural crop inspections; research and development; educational/academic uses; power-line, pipeline, and antenna inspections; aiding search-and-rescue operations; bridge, other infrastructure and building inspections; aerial photography; and wildlife area evaluations. (Note that these proposed regulations do not affect recreational drones and model aircraft hobbyists, who remain subject to the longstanding provisions of Section 336 of Public Law 112-95.)

As the U.S. drone industry attempts to catch up with the rest of the world, the FAA’s proposed rules arguably represent an initial movement in the right direction. As FAA Administrator Michael Huerta has acknowledged, regulations governing drones must strike the appropriate balance between encouraging the emerging drone industry while maintaining aviation safety.

Concurrent with the FAA’s release of proposed drone regulations, the White House issued a memorandum discussing policies to address concerns about privacy, civil rights, and civil liberties in connection with the use of drones by federal agencies. The White House’s memorandum requires the development of a framework to address privacy, accountability, and transparency issues raised by commercial and private drone use.

Clearly, those interested in using drones for commercial applications should continue to monitor the regulatory process and stay abreast of the latest developments.

Recent Guidance on Geographically Descriptive Trademarks May Help Brand Owners

Posted in Intellectual Property, Retail

imagesBrand owners frequently adopt geographic terms to describe the origin or a characteristic of goods, such as NANTUCKET NECTARS for beverages from Nantucket and HYDE PARK for high end apparel.  They may also adopt such terms to describe the origin of services, such as CALIFORNIA PIZZA KITCHEN for restaurant services originating in California and FASHION OUTLETS OF LAS VEGAS for shopping centers in Las Vegas.  But geographically descriptive marks are generally considered weaker marks along the spectrum of trademark protection and may be difficult to enforce if found to be merely descriptive rather than inherently distinctive.  While a geographically descriptive mark may acquire distinctiveness, and therefore be protected, once they are recognized by consumers as identifying the source of goods or services, establishing distinctiveness may be difficult.  Therefore, when considering the use of a geographically descriptive brand, serious consideration should be given to the challenges that may arise in the enforcement and registration of such a brand.  Fortunately, the U.S. Court of Appeals for the Federal Circuit (CAFC) recently provided some helpful guidance on this issue in the case of In re Newbridge Cutlery Company.

Although trademark rights arise primarily through use of the mark rather than registration, obtaining a trademark registration from the U.S. Patent and Trademark Office (USPTO) offers significant advantages, including nationwide priority and constructive notice to the public of the owner’s use and ownership of the mark.  Under U.S. trademark law, however, a trademark that is “primarily geographically descriptive” or otherwise merely descriptive of the goods or services cannot be enforced unless and until such mark has acquired distinctiveness.  While the USPTO may presume that a descriptive mark has acquired distinctiveness after five years of continuous use, an applicant may establish acquired distinctiveness sooner by demonstrating that the consuming public recognizes the mark as a source identifier.  Sometimes, however, it may take more than five years of use to demonstrate that the mark has become distinctive.  In any case, brand owners who choose geographically descriptive marks should be prepared to address the descriptiveness issue.

Determining whether a mark is “primarily geographically descriptive,” and therefore unenforceable, requires courts and the USPTO to consider whether:

  1. the mark sought is the name of a place known generally to the American public;
  2. the American public would believe that the goods originate in that place (known as the “goods/place association”); and
  3. the source of the goods is the geographic region named in the mark.

The USPTO often rejects trademark applications on geographically descriptive grounds.  After thirty years of silence on this topic, however, the CAFC recently reined-in the USPTO’s restrictive analysis and provided some helpful guidance to brand owners.  In the Newbridge case, the CAFC reversed the USPTO’s refusal to register the mark NEWBRIDGE HOME for silverware, jewelry, desk items and kitchenware made in Newbridge, Ireland.  In doing so, the court noted that the fact that Newbridge is the second largest town in county Kildare and the seventeenth largest in the Republic of Ireland “reveals nothing about what the relevant American purchaser might perceive the word ‘Newbridge’ to mean and is too insignificant to show that Newbridge is a place known generally to the American purchasing public.”  According to the CAFC, the fact that Newbridge was mentioned in the Columbia Gazetteer of the World and some Internet websites was not sufficient for the USPTO to conclude that Newbridge, Ireland “is a place known generally to the relevant American public” and did not demonstrate that the mark was primarily geographically descriptive.  Thus, the first prong of the test for geographic descriptiveness was not met.

In practice, marks containing geographic locations are viewed with greater scrutiny, but the Newbridge case can provide a helpful roadmap for brand owners who seek to use and register marks that contain geographic terms.  In light of the CAFC’s recent decision, careful consideration should be given to the public’s perception of a geographic term before incorporating it as part of a brand to ensure that it is not merely geographically descriptive or that it can acquire distinctiveness in the near term.

It’s Snowing (Again!) – What Responsibility Does a Landlord Have for Snow and Ice Removal?

Posted in Compliance, Landlords, Restaurants, Retail, Risk Management

ShovelAfter four major snowstorms have buried much of Massachusetts in more than six feet of snow, and with other areas of the country dealing with storms of their own, landlords nationwide are wondering how responsible they are for clearing and managing snow and ice that has accumulated in their parking lots and on their sidewalks. The answer is: very responsible.

On July 26, 2010 in Papadopoulos v. Target Corp., 457 Mass. 368, the Supreme Judicial Court (SJC) substantially revised 125 years of Massachusetts common law relating to land owner liability for snow removal. Prior to the Papadopoulos decision, Massachusetts law held that a property owner was not liable for injuries caused by “natural” accumulations of snow or ice on the owner’s property. In Papadopoulos, the SJC discarded the distinction between “natural” and “unnatural” accumulations of snow and ice and ruled that in snow and ice cases property owners are now held to the same duty of care to lawful visitors as they are in all slip and fall cases– to act as a “reasonable person under all the circumstances.”

The snow removal reasonably expected of a property owner will depend on several factors, most importantly: (1) the amount of foot traffic on the property, (2) the amount of the risk reasonably feared, and (3) the burden and expense of snow and ice removal. While all owners of property owe visitors a duty of reasonable care, what constitutes reasonable snow removal will vary, with retail stores, restaurants, and hotels owing a higher standard of care than residential owners.

The decision in 2010 does not create a new standard of care, rather it provides for a more uniform application of the “reasonable person” standard.  The SJC stated, “If a property owner knows or reasonably should know of a dangerous condition on its property, whether arising from an accumulation of snow or ice, or rust on a railing, or a discarded banana peel, the property owner owes a duty to lawful visitors to make reasonable efforts to protect against the danger.”  Plaintiffs in snow and ice cases will still need to prove that the land owner was negligent in its snow or ice removal, and owners will still have defenses such as comparative negligence.

Massachusetts is now in line with other New England states that have also rejected the natural accumulation rule. However some states, such as Missouri, Texas, Illinois and Ohio, still follow the natural accumulation rule in snow and ice cases. Additionally, individual town and city regulations will govern how long a property owner has to remove the snow and ice before violating local rules.

It is important to note that once the snow is cleared, property owners still have a duty to guard against ice that may have melted during the snow removal process and then refrozen during the night.  So keep shovels and ice melt products handy until all the snow and ice are truly gone!

What’s on the Menu? A Look at the New FDA Quick Serve Restaurant (QSR) Labeling Requirements

Posted in Restaurants, Retail

We recently reported in to our clients about a little-known element of the Affordable Care Act (“Obamacare”) that will require many QSRs (Quick Serve Restaurants) to provide specific calorie and nutrition information to their customers and on their menus. Mandated by the legislation, it was left to the Food & Drug Administration (FDA) to implement.

In December, the FDA has released final rules on the labeling as it applies to the QSRs meeting certain criteria (including as to the number of locations in the chain). Essentially, food that is consumed on the premises or available by take-out is covered by the regulations. Items excluded are condiments, daily specials, or purely “display” elements such as beverage bottles at bars or decorative displays.

Some QSRs have already been following this practice, at least in part. Panera Bread highlights new offerings because of their health and nutritional value. Now others will do the same, required to provide to customers information as to total calories; calories from fat; total fat; saturated fat; trans fat; cholesterol; sodium; total carbohydrate; dietary fiber; sugars; and protein. It’s quite like the FDA nutrition labeling that can be found on everything today from cereal boxes to cans of soup and bottles of juice.

Menu labeling is an extension of widespread concern over weight-related health risks in the US and the desire by many public health specialists to help consumers make more informed eating decisions. As in retail, consumers have more options available to them each year, and the delivery methods are getting easier. Along with new restaurants come mobile apps that can be used to purchase and receive food by delivery. Without wait lines, QSR has taken on a new meaning and consumers need not even leave their living room to order a burger and fries.

With the fast growing category of qQSRs providing healthier options and aggressively marketing those options, for this sector the FDA’s rulesmay be both a mandate and a marketing opportunity to help consumers make more informed choices.

There are the obvious first and tactical changes that customers will see under this regulatory structure. Signage and menu boards at QSRs subject to rules will need to change. Longer-term, if consumers respond to the new transparency and begin making choices based on content and not just taste or desire, there may be further health-oriented changes coming to retail food marketing. As consumers become accustomed to seeing nutritional information on their food choices, they may forego an unhealthy item.

Whether or not this development will help with the issues of overall obesity or not remains to be seen. Opinion on the topic varies widely; some believe this is a trend in the right direction; others believe that when someone wants a cheeseburger, they want one regardless – -or even fully aware – – of its nutritional attributes. The one thing we do know is that change is coming to the QSR world. Those ubiquitous, bright, backlit displays enticing consumers with mouth-watering shots of their food may have to compete with the sobering reality of the numbers behind it all.

Video Interview: Discussing Mobile Payments and Data Security with LXBN TV

Posted in Banking, Finance, Privacy, Retail, Retail sales, Technology

Following up on a recent post on mobile payments, I had the opportunity to discuss the growing adoption of Apple Pay, Google Wallet and mobile payments with Colin O’Keefe of LXBN.  In the interview, I explain why the adoption of these technologies may soon explode.  I also talk about why this is a good thing for data security.  Check out our discussion here:

 

When Fashion Met Style…Spin-Off Stores

Posted in Landlords, pop-up retail, Real Estate, Restaurants, Retail, Retail sales, Tenant

Over the past few years, there has been a discouraging rash of mall vacancies and closings, as traditional department stores and retail chains have had to close shop, lick their wounds, and get back to the drawing board in hopes of reviving their brand names and regaining a foothold within the retail market. What truly boggles the mind about these unexpected closings is the fact that these traditional retailers at one time held massive influence over their consumers as if they were the shepherds of fashion. To the shock of these fashion shepherds, the sheep have revolted at the thought of being relegated to the den of finite, standardized fashion, replete with homogenous items. Retailers’ aversion to broader merchandise mix – due to a fear of rocking the boat and missing projected revenues – has proven to be economically fatal causing consumers to look elsewhere in their quest to be stylish, and, not trendy.

Traditional department stores and retail stores are often afraid to go against the grain and take chances – an approach that is driven by risk-aversion and limited retail space. Rather than setting the trend, many retailers have decided to follow the mainstream – a strategy that has precipitated decreased sales and apathy among consumers. Today, the consumer can access the world of fashion in mere seconds given the power of e-commerce and social applications. These new search tools have exposed the consumer to different styles, fits and accessories that go way beyond the mainstream options of department stores and big-box retailers. With their backs up against the wall, traditional retailers have taken a page out of the e-retailers’ playbook and, finally, espoused the tenet that personalization is at the heart of style and retail.

Contrary to the adage that you can only make one first impression, traditional retailers have reinvented themselves through spin-off stores prompting consumers to give these traditional retailers another try. The spin-off store concept has gained quite a bit of traction among traditional retailers looking to expand their consumer base, revive their fledgling brand names, and kick the door open to once unrealizable markets. A spin-off store offers merchandise that goes above and beyond the merchandise mix at the flagship store since the mix of merchandise acutely takes into consideration the consumers’ tastes, interests, and environment (be it, a hipster haven in Williamsburg or a teeny-bop goldmine in Los Angeles). Traditional retailers have designed these spin-off stores with a keen eye on social demographics and certain trends, and have even gone so far as to bring in celebrity ambassadors or up and coming designers to further energize the brand name. However, the true beauty of spin-off stores is the combination of quality and choice under one roof that provides a unique and personal experience to consumers, which makes consumers not only feel closer to the brand but also part of a “fashion movement”.

Given the fact that retail growth largely depends on innovation and leveraging social data to create unique products based upon consumers’ broad tastes, a spin-off store could be a viable option for any traditional retailer looking to regain traction in the retail market. With a sales model that places consumers’ interests and tastes above all else, spin-off stores could certainly prove to be the next big thing in the retail industry. As the revered Oscar de la Renta once said, “fashion is about dressing according to what’s fashionable, style is more about yourself.” Spin-off stores embody the essence of Oscar de la Renta’s message by finally daring to be different and authentic.

Would You Like Fries with that Sweater? Retailer and Restaurant Pairings

Posted in Restaurants, Retail

As retailers continue to embrace the omni channel retail experience, our blogging team explores consumer behavior behind the new trends. One topic we have followed lately is the convergence of retail and restaurants. For years restaurants have put roots down in highly-trafficked areas like shopping malls, tempting weary consumers to relax in their comfortable chairs and refuel with appetizing menus. However, it’s not just the suburban shopping mall seeing an influx of restaurants snapping up square footage. In the last three to four years, stand-alone retail entities have begun to expand or reinvent their existing space to accommodate the addition of upscale eateries to their portfolio.

As reported in Forbes late last year, retailers are really beginning to woo shoppers with food. Particularly in densely populated urban areas, retailers like Macy’s are adding destination restaurants such as the one at their Herald Square flagship store. In addition to a full-service Italian restaurant they offer several Starbucks throughout the store.

Nordstrom has long been offering full-service restaurant options in addition to coffee bars at most of their locations. These establishments are not just afterthoughts: it is not unusual for some of them in more upscale locations to catch the attention of food critics who in turn give them glowing reviews. Last year the Wall Street Journal reported on the decidedly upscale wine offerings at Manhattan department store restaurants.

The idea of breaking from a day of shopping to relax and eat almost harkens back to the glory days of the department store in the early 20th Century, before suburban shopping malls became ubiquitous and when urban centers were still considered an occasion to dress up and plan a special outing.

The well-known travel industry thought leader Fodor’s has blogged about its top five retail restaurant destinations, proving that a department store menu is not synonymous with stodgy. With menus that sound as if they have been designed by celebrity chefs, Nordstrom, Bergdorf Goodman, Holt Renfrew and Macys are all well represented as places to recharge after a hard day of shopping.

Offering food is not just an opportunity to feed weary shoppers and send them on their way. An onsite restaurant is a way to further express the retail brand, as evidenced by Café Kristall at Swarovski which features Austrian dishes such as wiener schnitzel. Eating has become an experience, and retailers are embracing the trend and the opportunity to deepen the connection between themselves and the customer. It seems that consumers keep upping the ante on the retail industry. Particularly Millennials, who drive a lot of the innovation as we wrote in an earlier blog, want the same upscale attention to their food as the purchases they make in the stores. It is only natural that they would turn to a brand they already love.

For retailers this trend means paying precise and unrelenting attention to detail and making sure that staff are trained to handle the customers from the retail floor all the way through to the tabletop. It also means designing stores so that the shopping and dining experiences enhance rather than compete with each other.

The day when we visit a store first for the food and secondarily for the merchandise may not be too far away. It is conceivable that customers could enter a store and spend a few minutes looking at a jacket on the floor, then head to their reserved table, and complete the purchase via tableside tablets as they sip Chardonnay and wait for their salads.

The saying “everything old is new again” certainly applies to retail. Yesterday’s tea rooms at Wanamker’s and Marshall Fields are evolving into carefully curated, well-designed, highly-promoted restaurants and not a moment too soon, as Millennials are expected to spend $200 billion annually by 2017.

 

Apple Pay and Google Wallet: Mobile Payment Going Mainstream

Posted in Banking, Finance, Retail, Retail sales, Technology

When Apple announced on September 9, 2014 that the iPhone 6 would be equipped with a mobile payment system appropriately called Apple Pay, the entire mobile payment universe woke up. Although competitors had existed for years, none had gained considerable traction. In fact, within a month of releasing Apple Pay, Apple proclaimed to be bigger than all mobile payment competitors combined, including Google Wallet.

Adoption

Google Wallet was launched on May 26, 2011 to minimal fanfare, due partly to the fact that it initially worked only with a Citi MasterCard or a Google prepaid card. Although that changed on August 1, 2012, when Google Wallet began to interface with all major credit cards, the downloads of Google Wallet three years later still had not crossed the 20 million threshold, despite there being 89.4 million U.S. Android users as of July 2014. (Google apparently does not release the precise number of Google Wallet users.) Apple Pay, on the other hand, boasts that it registered a million credit cards within only 72 hours of launch, with numbers rapidly increasing as the iPhone faithful upgrade their devices.

Functionality

Although Apple Pay and Google Wallet are similar in use, Google has a few extra handy functions. With each system, the user uploads debit and/or credit card information to their phone ahead of time. Apple works with most banks, and Google Wallet works with any bank. At checkout with either system, the user will hold their phone next to a near-field communication (NFC) tap-to-pay device and either put their finger on the fingerprint ID button (on the iPhone 6) or type in their Google Wallet PIN (on Android devices running 4.4 KitKat or higher).

But Google Wallet has two features that Apple Pay does not currently offer: the ability to send money at no cost to friends (like PayPal) and the ability to upload and use loyalty cards and gift cards.

Security

When it comes to security, Apple Pay has a unique approach. Like your bank, Google Wallet stores credit card and personal information on encrypted servers. However, Google also records information about your purchases, the stores you visit, and even your geolocation. Also, unlike Apple Pay, retrieving information from Google’s cloud-based servers requires wifi or cell service.

As we discussed in a prior post, Apple Pay achieves security by using a “token” system and does not store or share credit card information or track purchase history, making it less valuable to hackers and retailers’ R&D departments alike. Also, the fingerprint scanner on the iPhone 6 (while it is already being duplicated for Android phones) is more difficult to bypass than the Google Wallet PIN.

Holiday Surge (or not)

Partly because the iPhone 6 was often wrapped in a gift box up until the holidays arrived, the little data available do not seem to reflect a great surge in mobile payment usage quite yet. What research from ITG (Investment Technology Group, Inc.) does show is that, in November 2014:

  • Apple Pay was responsible for over 1% of global digital payment dollars. In comparison, Google Wallet accounted for only 4% of digital payment dollars despite a few years’ head start. The industry leader, PayPal, accounted for 78% and its most direct competitor for accepting (as opposed to making) mobile payments, Square, accounted for the other 18%.
  • In a good sign for Apple Pay, roughly 60% of new Apple Pay customers used the app on multiple occasions and on multiple days. That averages out to roughly 1.4 Apple Pay uses a week per customer and is better than the 20% recurring users logged by PayPal.

Despite what may seem like marginal holds on the mobile payment market, analysts view these numbers as quite promising signs that Apple Pay and Google Wallet will gain significant ground as each becomes more widely adopted by expanding internationally and by users upgrading their smartphones.

The Near Future of Mobile Payment

By Q4 2015, Apple Pay and Google Wallet are expected to receive a fortuitous bump in the number of retailers equipped with NFC checkout devices, all because of something called EMV. EMV technology is the combined effort of Europay, MasterCard and Visa (hence, EMV) to increase payment card security by installing small chips within the actual card, which you may have already seen on your own recently-received cards. JCB, American Express, China UnionPay, and Discover have all joined the initiative. On October 1, 2015, credit card issuers will shift fraud liability away from U.S. merchants that implement EMV, thereby incentivizing retailers to invest in NFC checkout devices. Fortunately for Apple and Google, the shift to EMV also ensures that the NFC infrastructure necessary for mobile payment will become widely adopted in the U.S. Because EMV is already used throughout most of the world, for the growing legions of Apple Pay and Google Wallet users, the world will soon truly be at their fingertips.

Retailing and Technology: Once an Afterthought, Now a Brave New World

Posted in Retail, Retail sales, Technology

In a post last month, we mentioned the continued debates over brick-and-mortar and e-commerce driving innovation in the retail industry. Ultimately, technology enhances a shopper’s experience but does not necessarily replace it.

Much has been discussed about the success of retailers who embrace the omni channel experience. Whether it be e-retailers such as Bonobos or Warby Parker who move into the bricks-and-mortar world to enhance their virtual business or bricks-and-mortar retailers, such as discount store Dollar General and off-price clothing and housewares retailer TJ Maxx, who expand their presence online in order to enhance their traditional bricks-and mortar business, it’s all about providing the customer with multiple options to look, buy and strengthen their connection with the brand.

These omni channel options arrive at the consumer’s hands in a variety of ways we would never have imagined just a few short years ago. Terms like personalized solutions, wearable technology, visual search and augmented reality are just a few. Personalized solutions can be as simple as pop-up advertising when a customer visits a website or a pre-visit questionnaire that allows the customer to input user preferences, which then guides the entire experience from that point onward.

For many people, particularly as we are barely out of the holiday shopping season, shopping is a transactional activity: search the site, see what you like, get in the store, make the purchase and be done. However there’s a whole new retail customer experience developing, inspired by a younger demographic, and it will be here before we know it. Visual search, taking its cues from facial recognition software used by security companies, allows a shopper to upload his or her own photos from a smartphone to the retailer’s site, in order to exact match a product or complement an outfit. Perhaps more futuristic, Lacoste has implemented an in-store augmented reality experience in which shoe customers can place their foot over an in-store graphic and pass their smartphone over their foot. In the process, the smartphone displays what the shoe would look like when worn, allowing the customer to decide if it’s worth flagging down an associate to try on the product. Regardless of the methods chosen, retailers continue to push the envelope when it comes to technology, which means privacy, security and strength of the technology backbone will continue to be a focal point of retail companies.

Peeling back the onion, it’s not just the customer experience that demands adoption of sophisticated technology. Retail is emerging as an industry that not only makes big investments in technology but even seeds early-stage innovation. Many big name brands such as Nordstrom, Walmart, Staples and Home Depot have all launched innovation labs exploring big data analytics and mobile technology in addition to the customer experience. Suddenly retail powerhouses are becoming incubators for next-generation technology. Imagine what groundbreaking applications might be developed in-store and how they could be commercialized? Some applications could give a significant competitive edge to a struggling retailer. What might this mean for the retail workforce? With creativity and persistence, what used to be a high-turnover industry may come to attract the best and brightest minds particularly in technology and engineering. Formerly slow to adopt new technology due to thin margins, retail may one day be on the cutting edge of technology investments, and the “back office” functions, as they are now known, may not be hidden away for much longer. They may become the showpiece of the stores in the future.

The bottom line? Retail companies must keep innovating because consumers want it. E-commerce has not caused the demise of retailers. Instead, retailers have wisely seen the consumer’s thirst for new and exciting experiences beyond showrooming, and they are starting to respond and even outpace customer expectations. As outlined in NYU’s joint report with IBM, Retail 2020, retailers need to make creative use of their space for consumers to experiment, play and interact with the products and brands. And, like the Boomers before them who inspired the original shopping mall experience, Millennials will drive a lot of the change occurring in retail through the next few decades. It should be interesting to watch.

Would You Like That Retail Purchase Take-Out or Delivery? The 2014 Holiday Season Saw Brick-and-Mortar Retailers and Shopping Centers Increasingly Offering Same-Day Delivery Services

Posted in Retail

Necessity is the mother of invention, as they say, and online retailers such as Amazon and Zappos (each offering free 2-day shipping to their Prime and VIP customers, respectively) are certainly driving traditional brick-and-mortar retailers and shopping center owners and operators to make in-store shopping a more streamlined and convenient experience. In addition to “shoppable windows”, same-day delivery services for purchases either fulfilled by or made at local stores provide traditional retailers and shopping center operators with some leverage against the online retail machine. Deliv is a young start-up company that provides such retailers with some ammunition to “out-Amazon, Amazon.”

Deliv is currently partnering with at least five of the country’s largest shopping center owners and operators and over 250 retailers, providing the customers of its partners with a less frenzied shopping experience, which is particularly attractive to consumers around the holidays. Deliv provides consumers with a couple more convenient alternatives to the quintessential mall shopping experience. For online shoppers, customers of participating retailers have the ability to shop online and have orders fulfilled at a local store (a benefit to the store’s landlord as well, assuming that such purchases factor into the base gross sales amount used to calculate percentage rent), picked up by a Deliv driver and delivered to the customer’s home that same day. Consumers who remain partial to the physical in-store shopping experience can spare themselves multiples trips to the car or the agony of lugging multiple bags and packages into cabs or onto buses or subways, by electing upon check-out to have their purchases delivered to their home by Deliv driver that same day.

In 2013, GGP was the first shopping center operator to partner with Deliv, offering its mall shopper the option of dropping off his purchases at a secure location within the mall as he shops, to be delivered to such shopper’s home later that same day after he finishes his shopping spree . By the 2014 holiday season, the number of shopping centers taking advantage of Deliv’s same-day delivery services increased from the initial GGP 2013 test group of 4 properties to approximately 30 shopping centers nationwide. The cost passed off to the consumer is typically comparable to standard shipping prices for online transactions, and around $5.00 per delivery for mall shoppers. For that small price (or even at no cost to consumers, if shopping centers and/or retailers run promotions covering the delivery costs themselves, which some did for their 2014 holiday shoppers), shoppers have free hands to maximize the amount of shopping they can fit into a single outing, as well as the flexibility to continue on with their days and maybe grab a bite to eat or a movie without having to lug bags into restaurants or theaters or make a dozen trips to the end of the parking lot to deposit their ever increasing loads.

For last minute shoppers, the same-day delivery services offered by Deliv and its retail and shopping center partners also safeguards against delivery delays that may be caused by inclement weather conditions between wherever the warehouse fulfilling orders may be located and the consumer’s front door, which was a major problem for many 2013 online holiday shoppers . Because orders are fulfilled locally – whether made online or in stores – the same-day retail deliveries provided by Deliv and its partners give those of us out and about or home online shopping on Christmas Eve the peace of mind that our goodies will be safely under the tree by Christmas morning, in spite of our own procrastination.

Projections for 2015 are that same-day retail delivery services, such as those offered by Deliv, will continue to be an upward trend. With the cost to retailers being relatively small – Deliv CEO, Daphne Carmeli estimates each delivery costs retailers approximately $5-$15 – it remains to be seen whether any retailers will endeavor to implement their own same-day delivery services directly to customers, or if it makes more sense for retailers to continue to use third-party, same-day delivery services, such as those offered by Deliv. More to come in 2015!