E-commerce has been a thorn in the side of physical retail for some time now, but top-notch mall operators have done a good job at adapting. And while it still has some work to do, Tanger Factory Outlet Centers (SKT -0.38%) could end up a big winner, even in an e-commerce dominated world. In this Fool Live clip, recorded on Aug. 17, Millionacres real estate analyst Matt Frankel, CFP, and editor Deidre Woollard, discuss what Tanger has already done and what else it needs to do to make it happen. 

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Deidre Woollard: Do you feel like outlets are shifting in their role? You mentioned the brewery thing, I think one of the things that Tanger doesn't do as well, perhaps as Simon (SPG -1.43%), is the food and beverage aspect. Do you think that's a place where they can expand a little bit more, get a little bit smarter about it?

Matthew Frankel: Yeah. I don't know about the Tanger property by you, but I know the ones by me it's very like mall food court-ish. In terms of a pretzel place, there's a cookie place. I think there's a burger place that's near me, but it doesn't get much better than that. Simon has really done a great job of building out its food and beverage options. The Simon mall near me has a high-end steakhouse. There is a Cheesecake Factory (CAKE 1.81%) in there. There's places that you would go even if you didn't really need to shop. That's really the key. It's like Tanger needs to put places in its malls, not just food, beverage, but other non-retail elements that people will go to regardless of whether or not they need to shop. Then when they are there, it's a built-in source of foot traffic for their stores, which is really what Simon has grasped better than any other retail REIT in the market, in my opinion.

Woollard: Sorry to say this, we're actually headed toward Black Friday already. I feel like we're probably going to see an interesting year in this, because last year e-commerce grew a lot. As you and I've talked about, it's still not as big as people think it is. It's not representing even a quarter of all shopping, but people are doing more of their holiday shopping online. It doesn't feel like this is make or break for Tanger, but is it something that you're concerned about if the delta variant goes on a bit longer and we don't get the foot traffic as much?

Frankel: One thing Tanger did really well in the earlier days of the pandemic is start to pivot toward omnichannel retail. I don't know if you remember us talking on, I think it was on Fool Live about a year ago when Tanger rolled out its virtual concierge thing.

Woollard: Yes.

Frankel: They're keeping that going. They already have that infrastructure in place to pivot away from traditional retail. They're seeing a lot more of their tenants using their stores as fulfillment locations in addition to just outlets, which is a natural use for outlets. It's cheap square footage relative to, let's say, mall retail, from a retail. Gap (GPS -4.11%) pays much less for an outlet location than they do for a mall location. Which is why Gap's pivoting away from traditional malls. It's cheaper square footage. It gives retailers more optionality when it comes to building out omnichannel. Tanger itself has done a really good job with that, so far during the pandemic. They've really showed that they can keep their business alive.