Washington Prime Group Inc. is making last-mile-fulfillment space available to tenants at lower rates than their main stores. The program, called Fulventory, facilitates buy-online-pickup-in-store and buy-online-return-in-store. Tenants had asked the REIT why it didn’t offer last-mile fulfillment, CEO Lou Conforti said. “We have a lot of interest already, actually more than just an interest,” Conforti said, including fashion, sporting goods and children’s stores.

Basically, Washington Prime will provide a tenant with an extra location in the same shopping center at a cheaper rate than for the main store and cheaper than or equal to the cost they’d pay for similar fulfillment or storage space elsewhere. These leases will run three years. The company will offer three turnkey options in its enclosed and open-air assets: 675 square feet, 1,250 square feet and 2,500 square feet. All spaces will have interior and exterior entranceways and 24-hour access. Each tenant will determine how to do pickups and dropoffs, whether by scheduling applications that notify consumers, by automated lockers or running back-and-forth between the Fulventory location and the main store.

“In addition to utilizing Fulventory space for local or regional last-mile fulfillment, tenants will be able to use it for inventory clearance, as it provides a discrete sales location, hence maintaining separation between full-price and discounted merchandise,” said Conforti.

“I always believed in the symbiotic relationship between the physical and e-commerce, and I wanted to capture the nexus between the two,” he said. “After visiting with national inline retailers, department stores and big boxes, it became apparent there was a cost benefit analysis to the concept, as well. Retailers were paying, for example, $40 a square foot for warehouse or storage space, and we could provide that space cheaper.”

Shopping center vacancies enable the program. “Everybody has structural vacancy,” Conforti said. “Nobody is at 99.9 percent occupancy. We vetted this idea with a number of our tenants and they were all like, ‘Heck yeah!’ After all, it’s a lot closer than that warehouse near the airport.”

According to a Business Insider Intelligence survey, 68 percent of consumers made multiple click-and-collect purchases last year. Forty-eight percent cited delivery cost, 39 percent did so for speed and 28 percent for convenience. Thirty-seven percent of consumers bought online but picked up in store at least once a week, and 32 percent of consumers did so several times a week.

According to Business Insider Intelligence’s 2016 survey, 44 percent of retailers had adopted buy-online-pickup-in-store by that year, and 90 percent had said they would do so by 2024. Forty percent had adopted buy-online-return-in-store by 2016, and 81 percent expected to do so by 2024.