We recently contributed to the BCSC Technology Trends report, an exploration of how technology trends affect the property industry with particular focus on the retail sector and shopping centres.
Penning our thoughts brought home how any technology innovation, from contactless payment to iBeacons, ultimately begins with data and ends in consumer experience. Technology and the dawn of digital have drastically changed the property landscape: today 36% of in-store spend is a result of a digital interaction, 23% of consumers make the most of ‘showrooming’ — conducting their research in-store before making a purchase online — and 20% of Generation Z are sharing purchase ‘selfies’. The modern shopper is digitally savvy with a hunger for technology, value and convenience. However, while technology is helping drive retail real estate, it does not define it.
A recent report from research house CACI found that convenience shopping centres were driving the bounce back from the recession. This is a result of consumer need, not the benefit of technology. For retail, success is defined by creating a first-class customer experience that integrates convenience, choice, pleasure and price. Any retail technology needs to address these objectives, beginning with data and ending with consumer experience. Everything that occurs digitally leaves a data trail; the challenge is the sheer volume of data generated. As a shopping centre owner, the key is to know what data you need to understand the customer’s experience and their path to purchase.
Customers need to be digitally connected
At NewRiver, the investment in marketing is a key focus within our asset management strategy. For us, the marketing of our shopping centres is rooted in three key verticals: data, experience and local leadership. By focusing on these three areas we identify the key opportunities and engage the best channels to activate them. We seek to innovate the customer experience for the benefit of our shoppers and retailers, focusing on ways to drive footfall, dwell time and ultimately basket spend.
Our own data told us our customers needed to be digitally connected when they shopped and Deloitte estimates that digital technology will play a role in 50% of retail sales by 2019. Well, in 2012, we installed free wifi into our shopping centres through an income-producing model with BSkyB’s Cloud. Since then the benefit has been significant: firstly, generating important customer data to learn more about our shoppers; secondly, enhancing the customer experience; and thirdly, future-proofing our centres for the digital age. Consumers will shop online, so let’s enable them to do so in-store and drive incremental spend. During the past year, 23.5 million minutes were spent online using our free Cloud wifi across 14 of our 27 shopping centres, representing a 360% uplift year on year, with an average duration of 18 minutes, a year-on-year increase of two minutes and eight seconds.
The number of user devices has grown 90% year on year and our shoppers in The Piazza, Paisley, proved the most data-hungry, linked to our fledging student shopper market. This insight proves our shoppers are tech-hungry, and expect to get online in their local shopping centre. It also informs our marketing strategies, enabling us to create multichannel campaigns including our Summer of Shopper Selfies that engage shoppers on their terms via social media, creating a valuable, digitally connected, socially shareable retail experience that comes full circle by providing us with data and driving footfall, dwell time and basket spend.
A shopping centre is a human space
The key is using data to learn about our shoppers as human beings, not numbers, to create a genuine customer experience. A shopping centre, like an office, a home or a train station, is more than just a destination; it’s a human space to see, hear, touch, smell, taste, talk, discover, grow and learn. Our shopping centres are event spaces, gig venues, art galleries, sports arenas and artisan food markets, as well as places that provide a convenient everyday retail offer. The marketing strategies for our shopping centres focus on creating genuine human experiences that enhance lifestyle and we work as closely with our independent retailers as we do with our national stores to ensure these experiences drive maximum impact and sales.
We have Amazon Collection Lockers across the portfolio — they’re now part and parcel of the transient convenience-enhanced retail experience our shoppers demand. It is great to see one of the UK’s retail leaders, John Lewis, take this to the next level by installing fully automated temperature-controlled grocery click & collect lockers and ‘digital walls’. Luxury brand Mulberry has launched a click & collect service, ‘Anywhere, Anyhow, Anytime’, to “unite its ecommerce and retail stores”, somewhat humbling the iconic high-end fashion retailer. Indeed, fashion brands are key businesses to learn from given the fashion-forward are generally early-adopters in technology.
Creating a hyper-local experience
Our shopping centres are the heart of their communities and without our local shoppers, we have empty shopping centres. The digital age has helped create a hyper-local experience allowing shoppers to check-in on Facebook or tag their photos in the shopping centre on Instagram. The point is, we champion digital innovation in our shopping centres, but the key to retail innovation and local leadership comes back to understanding the needs of the local shopper in order to provide for them adequately — and this requires data. We need to engage with and learn from our shoppers at every opportunity but avoid being intrusive. The next exciting step for us in this field is capturing real-time intel at the point of purchase through the investment in real-time transaction-generated loyalty technology.
Retail property real estate has always been exciting and the digital age makes it more so but the consumer need for convenience, choice, pleasure and price remains the key driver, not the other way round.
Allan Lockhart is property director of NewRiver Retail.