Dive Brief:

• Shopping mall operator Simon Property Group has worked with marketing platform company Snaps to launch chatbots on Facebook Messenger for all 208 malls it runs around the U.S., according to an eMarketer Retail Q&A with executives of both companies.

• Patrick Flanagan, vice president of digital marketing and strategy at Simon Property Group, told the publication that his company saw an opportunity to use chatbots to enhance customer service and provide shoppers with a quick, convenient way to access information about each mall, such as how to navigate the malls or find specific stores.

• Flanagan said the bots, which he described as pocket-based concierges, can be used for proactive marketing purposes, leveraging store information, shoppers’ locations and historical behavioral data to recommend new stores for them to visit or promotions relevant to them.

Dive Insight:

As mall retailers struggle, mall owners of course are struggling, too. The Wall Street Journal reported in late July that executives with Simon Property Group and other mall-operating real estate companies have had to take pay cuts, as things have gotten increasingly difficult.

Recent research has suggested that many malls need to revamp their business models to focus less on department stores. Simon in specific announced that it would invest $1 billion to redevelop its mall assets earlier this year. These big-picture reboots are necessary in many cases, but it also makes sense for mall owners to try anything they can on a smaller scale to better connect with customers and provide them with a more personalized relationship to their local mall. Investing in chatbots is a more modest, yet cutting-edge, method of doing exactly that.

It's looking like a very good time to invest in chatbots, too. Usage of chatbots appears to be growing, and 3C Interactive's Consumer Chatbot Report found earlier this summer that about 25% of consumers use chatbots daily, a percentage that rises to 40% among millennials. Not only are chatbots attracting usage, but there is evidence that they could be important in connecting with younger demographics, which all retailers would love to see coming through the door more often.

Still, we remain in the early innings of the chatbot evolution. Retailers like Sephora, Nordstrom and, most recently, Levi Strauss, have shown how chatbots can add a dynamic new layer to their customer engagement strategies. Despite the benefits, any brand beginning to use chatbots will have to go through some trial and error as they move beyond simple customer service and try to figure out how to effectively use chatbots for marketing. It will be interesting to see how soon Simon can work with retailers in its malls to harness customer data and turn it into personalized offers and recommendations.