Westfield to charge tenants to operate online
Thursday, April 14, 2011/
Shopping centre giant Westfield has been urged not to be “over opportunistic” in its treatment of small retailers, in the wake of its decision to charge existing tenants to join its new virtual mall.
Brian Walker, managing director of The Retail Doctor, says: “You have to ask where their loyalties lie. I think that they have an obligation to create an environment in which tenants benefit from a cross-channel offer.”
“From a cross-channel perspective, it will be good for Westfield but their challenge will be to not be over-opportunistic about it.”
His comments come in light of the news that Westfield has opened the doors for retailers to operate on its new online shopping site, but will be charged to do so.
Michelle Vanzella, Westfield director of business development, says tenants pay a sales commission to Westfield to join its virtual mall, and 70% of the retailers operating on the site are already tenants in Westfield shopping centres.
Foreign retailers, who can ship products costing less than $1,000 to Australian customers without charging GST or import duty, will also be welcome to join the website.
“At the moment, the site is catering for Australian-based retailers, but there would be every reason to expect that [expanding internationally] would be a viable option in the future,” Vanzella says.
Walker says while Westfield may label the charge as a “sales commission”, they are essentially “clipping the ticket”.
“Westfield is renowned for never being too far from the cash register… [Charging a commission] doesn’t appear to feel that equitable,” he says.
Walker says he trusts Westfield will promote offline retailers in all its various channels and be “very overt” in its efforts to entice online shoppers into its offline stores.
“If they take a cross-channel approach, it could generate more traffic into the traditional stores, but these retailers also need to play a part in the broader retail environment,” he says.
Meanwhile, leading online retailer DealsDirect has acquired online children’s wear retailer The Kids Store for an undisclosed amount, just one week after receiving a capital injection from James Packer’s investment vehicle Ellerston Capital.
DealsDirect co-founder Paul Greenberg has been open about his intentions to use the fresh investment from Ellerston to chase acquisition in what he calls adjacent sectors, and The Kids Store buy is the first such deal.
The Kids Store, which was founded in 2006 by Nicky Coxson, has already been folded into the DealsDirect empire – visitors to thekidsstore.com.au hit a DealsDirect landing page explaining the new ownership and directing consumers to visit the DealsDirect kids and baby categories.