Why mall owner Simon Property Group is expanding its online marketplace

“Omnichannel is the future of retail,” Lee Sterling, Simon Property Group’s chief marketing officer, told Modern Retail. “Simon is uniquely positioned to drive this evolution with the amount of properties we have across the country, the customer following we have [and] the relationships with brands.”

Simon has been making digital investments for several years. Simon launched Shop Premium Outlets in 2019 as its entry into e-commerce. Later that year, Simon partnered with Rue La La and Gilt operator Rue Gilt Groupe, backed by Fanatics founder and CEO Michael Rubin, giving Rue Gilt about $280 million and control over the marketplace’s operations. Simon launched a digital search platform, Simon Search, in 2022 to allow customers to search for specific products available at stores inside the malls; as of last year, the service had been used for almost 2 million searches.

Neel Grover, CEO of ShopSimon — a longtime marketplace executive who held leadership roles at Indi Engage, Bluefly and Buy.com before joining Simon in 2020 — said the Shop Premium Outlets marketplace was initially launched to bring retailers’ outlet stores online as many of them didn’t have a front-end web experience of their own. Since then, brands asked if they could put more discounted products, not just those from their outlets, on the site as well so they could focus their own sites on full-price inventory. Grover said some of the brands work with other marketplaces while others only work with ShopSimon.

“The reason why brands love this is because of the Simon relationship, and they know that Simon is going to take care of their brand and work with them; we have complete flexibility,” Grover said. “We work with brands very uniquely as compared to other marketplaces. We’re able to share customer information and data. We really help them grow not only their businesses on our site, but we help them grow their own dot-com business and their own physical businesses outside of our site, so we’re very symbiotic.”

The rebranded marketplace also takes advantage of the 2 billion annual visits to the company’s malls and shopping centers and 150 million visitors to its websites. The site is promoted within the shopping centers, on Simon’s websites and digital channels, and through owned and paid media. All products listed for sale on ShopSimon are either sold directly by the brand or through an authorized retailer, according to the ShopSimon website.

“We think it makes sense for us because we have this amazing network of shopping centers all across the country and this amazing network of retailers,” Sterling said. “Customers know the Simon name, they’re familiar with the Simon name; more likely than not, we’re their local neighborhood shopping center that has all the brands they love.”

Beth Goldstein, a footwear industry analyst for Circana, said this may appeal to consumers looking for brands they want at value price points as an alternative to mass merchants, and to brands who want more control. “It sort of makes sense in this world where channels are blurring together and consumers have shown that they’re willing to shop different ways and are open to new formats,” Goldstein said.

While other discount retailers like Burlington and Ross have been slow to e-commerce due to high costs of shipping and processing, Goldstein said “consumers have gotten a little bit more used to shopping off-price online” because of sites such as Rue La La and Gilt — whose owner also controls ShopSimon. “This may just give an opportunity to go beyond the outlet and just as another avenue to find brands at discount prices.”

Simon is perpetually updating the platform with more features for shoppers and brands. The site can give brands additional exposure through its retail media network, which launched in March in partnership with Mirakl Ads, and Grover said the company plans to eventually extend that retail media network to in-person advertising at the malls. The marketplace also last year launched AI features including search-by-image and a recommendation system. Additionally, the site has started to adopt buy online, pickup in-store at some brands’ mall locations.

“I think we’re always looking at the marketplace and trying to identify where there’s a void in the marketplace and what makes sense in terms of what our customers are looking for and what our retailers are looking for,” Sterling said. “We need to stay ahead of the times, understand what our retailers need at a certain point of time, understand what our customers need at a certain point in time and evolve accordingly, and that’s exactly what happened here.”