Shopping centres versus online fulfilment: An agent based model simulation

The traditional bricks and mortar retailing sector is under pressure through competition from low-cost online retailers. Many researchers predict that shopping centres may even disappear as a viable outlet or business model, given the success of companies such as Amazon and EBay. This paper attempts to model the conditions in which shopping centres can compete with online retailers. Our model considers factors such as immediacy, post-sales service, online risk and mall entertainment, which it is postulated will assist shopping centres to compete with online retailers, against the value they provide. Results show that the higher the value of purchase the more likely consumers is to purchase from a store. Mall managers can increase purchases by focusing on customer service and gratification from purchases, and show the reduced risk of purchasing in a store than online. Cybersecurity breaches (greater online risk) may also encourage more bricks and mortar purchases.