Simon Property Group (SPG) tends to have the finest-quality outlet malls with some of the best names in retail as lessees in its properties. It can afford this experiment, although by doing so, it will be letting a genie out of the bottle it may one day wish it hadn't.

While SPG is getting all the press about this, I think the real story is yet to be told: what will its competitors just a cut under it in quality of experience do to keep and grow their own walk-in traffic?

Take Tanger Factory Outlet Centers, Inc. (SKT) for instance. SKT is a favorite of many contributors on Seeking Alpha, some labeling it a strong buy or a huge bargain, etc. The company owns 39 outlet malls, mostly in the eastern half of the US. During what is supposed to be a great year for the US economy and a year led by consumer spending, Tanger had a 0.3% decline in net operating income in the first half of 2019.

There were a number of retailer bankruptcies among their lessees, some others chose to relocate their stores to other outlets, and still, others renegotiated their leases on more favorable terms.

While Tanger still enjoys a 96% occupancy rate, that is merely running in place during what is dubbed the year of the consumer. It is not a particularly vibrant example of a healthy business. Clearly many shoppers are still willing to make the drive to outlet malls to spend the day enjoying their shopping experience. They do so both because it is fun for them and they perceive they will enjoy bargain prices on the same products the retailers sell for more money in their brick-and-mortar stores physically closer to where most shoppers live.

The goods these outlet malls sell, often a previous year's offering or an item produced expressly for sale at an outlet mall, have not been available online. Bargain hunters until now have had a choice of the "regular" retail store or the outlet mall. If Simon's experiment works, there will be one more way to save on outlet merchandise without making the trip: the website shoppremiumoutlets.com, which will take you to "Simon - Shop Premium Outlets".

If you visit the website, you will see that Simon has done it right. The site is big on professional photographs of what is available, clearly organized by category, and advises you of the "Deals" available without having to meander from store to store to find them. Slick.

For a long time, while other malls suffered, outlet malls in the aggregate showed real growth. I think a good part of that growth came from the closure of other (non-outlet) malls. Such "growth" cannot long continue. All malls need new shoppers. As job-holders previously unemployed get a little spending money, the size of the retail pie should grow. Instead, it seems growth has come more from enjoying a larger slice of someone else's pie.

I don't know if Simon's bold move will result in a larger piece of the pie going to the company or if going online will create a larger pie for it initially and others that follow suit as well. Simon's CEO says he isn't worried the website will siphon shoppers away from his company's outlet malls. Using one of his company's more upscale malls as an example, he said after this announcement: "When you can't make that trip to Woodbury, knowing you can get outlet pricing online makes sense. We think the two will feed off each other to generate higher sales."

The bankruptcy filing of Forever 21 announced last week will result in at least some Forever 21s being closed. More importantly, it will certainly make it much more aggressive in negotiating cheaper leases if an outlet mall wants to keep its business. It is the nature of all business that some will survive, some will stumble, and some will make stupid decisions that lead to a rapid and complete downfall.

Forever 21 is just one retailer - but I have no doubt others will fall along the way. Will the physical outlet malls find new tenants? And if they do, will they be able to sustain the current level of rental income they are getting from these new tenants? And if the newbies get a better deal, will the current lessees not demand the same?

I think that a number of current outlet mall retailers are going to be loath to go online, especially those with the bulk of their sales to wealthy or most discerning or demanding shoppers.

After all, many of these sell what is (to me, anyway!) overpriced goods simply because some people want to own a Wazoo Whatzit rather than a mere Thingamajig. I don't get the logic. My best watch is a 10-year-old Timex. It is a watch. It tells me the time. I don't need to flourish my Patek Philippe or Rolex to impress people when they ask me the time. But some retailers enjoy amazing margins because some people feel differently. I would think the last thing those retailers would want is for shoppers to be able to go online and find their products (horreurs!) discounted.

Yet necessity is the mother of invention. SPG says it is in discussions with dozens of companies and already has two dozen signed up. If it is successful, and the trend continues, as the first mover and the 800-pound gorilla in the industry, Simon may be able to enjoy the synergy of these two approaches. But will the others, as they stand by and wait to move until they see if it works or not?

By then, for them, it may be too late.