REAL ESTATE

The Mall Is Not Dead: How Shopper Analytics Ensure It Thrives

BY CSA STAFF

By Nader Fathi

While empty, decaying malls make for inspired photo shoots, most of America’s shopping malls are actually doing well. In fact, according to new data from the International Council of Shopping Centers (ICSC) and the National Council of Real Estate Investment Fiduciaries, shopping center occupancy rates were 92.7% at the end of 2014 – the highest level in six years! Occupancy was even higher for malls (both super-regional and regional malls) at 94.2%, the highest since 1987.

Since the e-commerce and ensuing mobile commerce boom, retailers and malls have been working hard to drive people into their stores and keep them there. Many have implemented innovative technology, including device detection and customer analytics software, to keep up with current shopping behavior trends to not only improve operations but also drive in-store sales.

Customer analytics in action
Mall operators have unique demands as they provide services to both retailers and consumers. To breathe new life into its space, one major Silicon Valley shopping mall, spanning both open air and enclosed buildings across several city blocks, captures customer behavior information via WiFi access points (both within retail merchant stores and across the mall grounds).

Once reliant on assumptions or sales data without context, this shopping mall now uses WiFi-enabled customer analytics to:

• Improve operations based on visitor traffic (for better retail mix, employee coverage),

• Help its merchants by providing better traffic flow data and visitor information, and

• Keep close contact with loyal customers by providing Social Wi-Fi.

Improving operations
This passive and anonymous data collected from shoppers and employees generates analytics for the operations team to visualize the flow and dwell patterns of customer visits. This in-depth understanding of traffic flow led to the realignment of resources for:

• Security and facilities management,

• Staffing schedules (based on when and where visitors to the mall appeared), and

• Maintenance activities (to reduce inconvenience to visitors and merchants alike).

Additionally, one collateral benefit imparted to the operations team is better management of the “mix” and location of new retailers; with more knowledge of visitor traffic, the shopping mall can justify higher rental rates and better visitor offerings. This mall also offers a variety of events every week, such as live music, Karaoke Night, Game Night, and other activities. Using customer analytics, it can measure which event drew more visitors to their site.

Helping retail merchants
During the past five years, the top providers of analytics tools for brick-and-mortar retail have collectively amassed nearly $300 million in funding. There is a huge appetite for technologies that offer insight about their shoppers and what actually happens in each store. Basic-yet-essential insights, such as foot traffic counts and new vs. repeat customers, can arm a previously blind retailer with key data for more efficient staffing, store layouts and more.

Consequently, this Silicon Valley shopping mall offers its merchants a retailer dashboard to give them the same benefits of having visibility into consumer traffic in their own stores. Other features provided were loyalty metrics, consumer behavior analysis and overlay on traffic patterns across the mall to view the success of their own marketing campaigns within the mall environment.

Connecting with loyal customers
Taking it to the next level, the active marketing power of customer analytics comes from the “connected” consumer via captive portals. That is, opt-in setups through which shoppers login to the mall’s secure WiFi, most often via Facebook, in return for free Internet access (sparing their data usage) as well as a numerous perks, many of which today’s consumers expect.

This shopping mall is able to identify the visitor and gain deeper insights about each person’s interests, purchase history and showrooming behavior (Internet browsing while on premise). In addition to offering insights to improve operations, connected visitor analytics enable triggered marketing outcomes that increase conversion and boost loyalty.

The win-win benefits consumers with perks including:

• Better visitor experience;

• Targeted offers served up in real time;

• Unadvertised promotions that surprise and reward the visitor; and

• Frictionless loyalty card (the system credits the shopper for the visit automatically)

By meeting the combined goals of supporting mall operations and retailer marketing needs with customer analytics, the shopping center’s management can better utilize their operations staff and resources, and provide its merchants with tools to understand how visitor traffic affects sales.

D.J. Busch, a senior analyst at Green Street recently told Fortune: “As a mall gets more productive, it is more in demand from new, growing retailers, so it’s a virtuous cycle.” Well equipped with customer analytics to support emerging trends, the mall will be alive and well for years to come.


Nader Fathi is CEO of Kiana Analytics, a location-based marketing company.

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D.Girish says:
May-20-2015 10:49 am

Great post Nader. I totally agree with what you said. Analytics can play a crucial role in helping malls revive. And this is where beacons come into the picture. In fact, with beacons predicted to directly influence over $4 billion worth of US retail sales this year and retail brands are all set to move out of the pilot phase into mainstream beacon deployments effecting payments, and loyalty programs. However, when it comes to analytics, what differentiates a successful retailer from an average one is that a successful retailers is one who has a deep understanding of the metrics that matter. Retailers need to invest in data analytics and use this intelligence to drive conversions and increase revenue. For this, it is crucial that retailers have a solid understanding of the metrics involved in data-driven decision making. We have discussed in detail on what are the different metrics that brick and mortar store retailers need to measure to offer a better experience to shoppers here. It talks about various metrics to be tracked under various segments- right from customer path to loyalty and customer engagement: http://blog.mobstac.com/2015/05/beacon-analytics-in-retail-4-essential-metrics-for-retailers/

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Lowe’s Canada to pick up 13 Target leases, distribution center

BY Dan Berthiaume

Toronto – Lowe's Canada has reached an agreement to acquire the leases of 13 former Target Canada locations and to purchase Target's distribution center in Milton, Ontario, for a total purchase price of about $125 million. This acquisition came as part of a real estate auction following Target's decision to cease operations in Canada.

The store sites are located across Canada, many in markets where Lowe's is underpenetrated. The distribution center in Milton, Ontario, is strategically located to serve Lowe's current and future stores. As a result of the transaction, approximately 2,000 jobs will be created in Canada.

"Since opening stores in Canada in 2007, we have developed a successful model for providing the Canadian customer with outstanding service and quality products for the home," said Sylvain Prud'homme, president of Lowe's Canada. "These additional locations will accelerate our expansion across the country, enhancing our presence in Western Canada and strengthening our base in Ontario. We are excited to bring Lowe's to more customers in more communities in Canada, further demonstrating our commitment to this important market."

The proposed acquisitions are subject to court approval and certain other customary conditions. The court-run process is expected to be completed by June 30. Wal-Mart Canada recently reached agreements to acquire one distribution center, 12 store leases and one owned property formerly held by Target Canada, for an aggregate of approximately $136 million.

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Fuddruckers enters Maine

BY Dan Berthiaume

Houston – Fuddruckers is going from “Howdy” to “Ayuh.” The casual-dining chain is opening its first location in Maine on May 11 through a partnership with franchisee B&B Burgers Inc. The 3,000-sq.-ft. restaurant in Ellsworth, Maine anchors a new Tradewinds convenience store complex.

In addition to the 72 company-operated Fuddruckers locations, parent company Luby's Inc. is the franchisor for 107 Fuddruckers franchise locations across the U.S. (including Puerto Rico), Canada, Mexico, Italy, Chile and the Dominican Republic.

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