SmartCentres

September 11, 2014 10:10 ET

SmartCentres to Open 'Penguin Pick-Up' for Online Purchases

Combining national network of SmartCentres shopping centres with online shopping responds to consumer need

VAUGHAN, ONTARIO--(Marketwired - Sept. 11, 2014) - SmartCentres, Canada's largest developer/operator of shopping centres, is launching Penguin Pick-Up, a network of free convenient pick-up locations for online purchases.

The first three pilot Penguin Pick-Ups are underway and expected to be open in the Greater Toronto Area in the next three to six months. They will have long operating hours. Two of the three locations are in Calloway REIT-owned SmartCentres. Based on consumer demand, Penguin Pick-Up will be rolled out across SmartCentres' network of more than 250 locations in Canada.

"This is not a revolution, it's an evolution; Penguin Pick-Up is a natural next step for us," said Mitchell Goldhar, President & CEO of SmartCentres. "The writing is on the wall; online shopping is part of the overall shopping experience of the future. And in this respect, we will naturally be an active player."

Penguin Pick-Up combines the ease of online shopping with the convenience of SmartCentres shopping centre locations to offer customers a choice and give people more free time in their lives. SmartCentres believes consumers will find Penguin Pick-Up a good fit between their desire to buy online and take delivery on their own terms.

"Consumers want things to be easy. Penguin Pick-Up is easy and free," said Goldhar. "Twenty-five years ago SmartCentres was launched to make things easier and cheaper for Canadians. We've had good success with SmartCentres and we are now reinvesting that success in new innovation to make things easier and cheaper once again. Through our real estate and our brand across the country, SmartCentres is well-positioned to do this."

Once customers register online, they will be able to have online purchases made from any retailer or website delivered to a Penguin Pick-Up location of their choice. Upon arrival of the online purchase to Penguin Pick-Up, the customer is notified by email, text or voice. The customer then visits Penguin Pick-Up at their convenience where their purchase is placed right into their car, all without the customer leaving the vehicle.

Also, retailers will be able to offer Penguin Pick-Up to their online customers.

"We are delighted to have another way to serve our online customers," said Simon Rodrigue, Senior Vice President of eCommerce for Walmart Canada, which operates stores in SmartCentres locations across Canada. "Penguin Pick-Up will complement the many online services we have launched for Walmart customers including our new Grab and Go service that allows shoppers to collect their online purchases at a Walmart store of their choice. Penguin Pick-Up extends the pick-up option to even more communities and neighbourhoods for Walmart. Penguin Pick-Up is extremely well positioned for what we see as the future of retail in Canada."

Penguin Pick-Up plans to add locations with lockers to provide 24-hour access and self-service. In the future as the customer base grows, the company may also add home delivery to allow the customer to choose a scheduled time for delivery within a small time window.

"E-commerce and omnichannel are transforming the Canadian market," said Jennifer Lee, Partner, National Omnichannel Leader, Deloitte Canada. "Canadian consumers are driving this change and are demanding more convenience. The number one complaint of shoppers and retailers is the stress, inconvenience and cost of home delivery, commonly referred to as 'the last mile'. Penguin Pick-Up is the answer to the last mile."

The growth in online consumer orders provides an opportunity for SmartCentres to continue to innovate its shopping centres and fulfill its commitment to the customer to provide value and convenience. Currently, 95 per cent of Canadians live within 15 kilometres of a SmartCentre.

SmartCentres plans to offer Penguin Pick-Up for free to both consumers and retailers as it rolls out the service. "We are driven by change first; financial results will follow," said Goldhar. "Penguin Pick-Up addresses the issues relating to the last mile for many consumers and retailers; the value from the service will become clear as things progress."

"With this initiative we are putting a stake in the ground in the world of online shopping," said Goldhar. "We believe the opportunity is not simply to augment online shopping, but to grow an exciting business around it. It is possible that this could lead to SmartCentres creating a full online shopping centre with full e-commerce and a full range of delivery options."

Penguin Pick-Up is a wholly owned division of SmartCentres. SmartCentres' CEO & President is a significant shareholder in Calloway REIT (TSX:CWN.UN). Visit the Penguin Pick-Up website at www.penguinpickup.com and sign up to get more information as it becomes available.

Key industry information:

From 2009 to 2013, the compounded annual growth rate of Canada retail sales was 3.8% and e-commerce was 13.9% in same period - source: Statistics Canada.

Online retail in Canada expected to grow from $20 billion in 2013 to $34 billion in 2018 - source: Forrester Research.

Approximately 47% of US online shoppers use in-store pick-up to avoid online shipping costs, and 10% because they find it more convenient than home delivery. In addition, more than half of online shoppers indicated they would welcome the ability to have purchases delivered to a nearby convenient location for pick up - source: Accenture/Forrester.

About SmartCentres

SmartCentres is a privately held Canadian company with over 250 locations across Canada, with the majority having Walmart as an anchor tenant. SmartCentres offers shoppers the perfect combination of convenience and the best value for all their weekly purchases. The Penguin icon is recognized by families and shoppers in every province in Canada. SmartCentres has partnered with Simon Property Group and Calloway REIT to develop Toronto Premium Outlets and Montreal Premium Outlets. For more information on SmartCentres, visit www.smartcentres.com.

About Calloway

Calloway is one of Canada's largest real estate investment trusts with total assets of approximately $7 billion. It owns and manages approximately 27 million square feet in 123 value-oriented retail centres having the strongest national and regional retailers, as well as strong neighbourhood merchants. Calloway's vision is to provide a value-oriented shopping experience to Canadian consumers. For more information on Calloway, visit www.callowayreit.com.

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