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Sharing intel is key to success for mall tenants, specialists say

April 4, 2018

In an increasingly competitive environment, harnessing technology to serve — and to learn about — the customer is as crucial to landlords as it is to retailers.

“Mall owners realize that they need to be upping their game in terms of data and technology,” said Melina Cordero, CBRE's head of retail research for the Americas. “Retailers have traditionally been much better at collecting data on customers and using technology, and landlords have been behind; landlords are finally trying to play catch-up and collect data, and they are all making technology investments.”

Retailers have been using technology to better understand their customers for years and are beginning to share more of that data with owners. Retail REIT Ramco-Gershenson is using data collected from one of its tenants to revisit its marketing strategy for a new project in Detroit. “The retailer is actually drawing from a customer group that is quite a bit larger than what most people think is the primary or secondary trade area,” said Todd Caruso, senior managing director of retail advisory and transaction services at CBRE. Now the landlord and retailer are launching a program to jointly collect customer cell phone data to validate the retailer’s findings.

Landlords have not exactly been standing still with their own technology initiatives, though. Simon created Simon Innovation Group in 2012 to develop technologies that include digital directories, a parking-reservation system (in partnership with the MyPark App) and a Facebook messenger bot that guides shoppers in finding the answers they need quickly.

“Consumers today are seeking positive shopping experiences, and by collecting data on the individuals that visit a center, landlords can create the type of centers that pull a shopper in”

In 2015 Simon installed 4,800 electronic messaging beacons at 192 malls and shopping centers nationwide. Like systems deployed by other center owners, these allow shoppers to receive messages and also enable the landlord and the tenants to learn more about consumer shopping patterns by tracking visitors’ cellphones — without knowing their identities or phone numbers.

“Consumers today are seeking positive shopping experiences, and by collecting data on the individuals that visit a center, landlords can create the type of centers that pull a shopper in,” said Ashlyn W. Booth, director of retail property marketing at JLL. “For example, merchandise categories can be tailored to best suit the customer’s needs and wants.”

GGP, too, has a number of technology-based programs under way. Owners of Amazon.com’s digital assistants, such as Echo, can add GGP to their Alexa voice-activated device and learn about latest events or store openings at participating malls. The program includes Cumberland Mall, in Atlanta; Ridgedale Center, Minnetonka, Minn., and The Shops at La Cantera, San Antonio.

GGP also worked with INRIX, a provider of street and off-street parking information, to help guide customers to available parking places.

Macerich, for its part, has teamed up with several technology firms. Among these are a program with Spring that enables shoppers to receive frequent-shopping rewards; Steps Away, which sends push notifications over free Wi-Fi to a shopper's mobile phone; Happy Returns, a centralized merchandise-returns program that uses in-mall kiosks; and Kipsu, a text-based concierge service through which shoppers text in questions and receive live responses.

“It was inevitable that shopping mall operators are going to have to move to platforms and networks as a way to compete successfully into the future ”

The recently launched One Market, partly owned by French mall operator Unibail-Rodamco, represents another effort to harness technology for the benefit of landlords and their tenants. In 2012 Westfield created Westfield Labs, which was recast in 2016 as Westfield Retail Solutions. Then, last year, Westfield established OneMarket, a retail technology network that unites retailers, brands, venues and partners to facilitate collaboration, encourage data-sharing and implement new technologies — such as natural voice processing, artificial intelligence and augmented reality.

As part of Westfield’s December 2017 merger with Unibail-Rodamco, a 90 percent interest in OneMarket was spun off into an entity listed on the Australian Stock Exchange. Unibail-Rodamco holds the remaining 10 percent. The OneMarket team is led by Chairman Steven Lowy and CEO Don Kingsborough and includes technology specialists from the retail field and from Silicon Valley.

“Google, Facebook, Amazon and others adopted platforms and networks as not just a new technology, but as a new business model,” said Kingsborough. “It was inevitable that shopping mall operators are going to have to move to platforms and networks as a way to compete successfully in the future, and that is really what OneMarket is doing. It is a way to collaborate and join together to make shopping mall operators more competitive, have more feature sets at a much lower cost collectively and satisfy our retailers and customers’ needs much faster and more effectively than any one of us could do on our own.”

“It’s all about helping understand where the customers are coming from and what they need”

Kingsborough argues that landlords are wasting resources by pursuing technology systems separately. “Each shopping mall operator doing something different wasn't going to solve the consumer problem,” he said. “If they are going to have to use 10 or 15 different ways to do it in each of the malls, then what we were going to do is confuse the consumer.”

The consequences of not embracing technology are dire, Kingsborough asserts. “If the shopping mall operators don't facilitate new technology, then you are essentially firing your consumers and your retailers,” he said. “To the degree we don't do these things, then digital players like Amazon are going to continue to take business away from us, and that cannot be good for the shopping mall operators.”

The good news is that mall companies are now taking this more seriously than they have before. “They are all going through this right now, asking themselves what are they and what will they look like 10 years from now,” said Scott Holmes, senior vice president and director of the national retail group at brokerage firm Marcus & Millichap. Mobile phones are driving many of the technology initiatives that mall owners are pursuing, Holmes says. “Whether it is something as simple as finding your way around a mall to go to the places you want to go more easily using a mobile app, or something more sophisticated — like tracking traffic patterns using GPS and geofencing and things like that — it’s all about helping understand where the customers are coming from and what they need.”

On the notion of mall owners finally banding up to consolidate resources, Holmes sees both pluses and minuses. “Combining might negatively impact their brand and their differentiation from one another," he observed, "but it also might lead to a rising tide for all boats, so to speak, on the positive side.”

By Ben Johnson

Contributor, Shopping Centers Today

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