Photo: RetailWire
Can data collaboration save the mall?
At an NRF Big Show session exploring digital retailing’s impact, Steven Lowy, co-CEO of Westfield Corp., said greater collaboration around data needs to happen to take the experiences found at physical retail to another level.
“Today, the relationship between retailers and real estate developers is designed to open stores and the relationship has essentially ended there. I believe this needs to be turned on its head,” the shopping center exec said.
Mr. Lowy envisions a shopper arriving at a mall and being instantly recognized by license plate or smartphone, enabling the mall to curate a shopping experience based on their favorite retailers, tastes and behaviors. But the industry is far from this realization.
“Data sharing is not about moving customers from one retailer to another,” said Mr. Lowy. “It’s about building the best customer experience for each customer.”
He shared three pillars of future success in the changing industry:
Collaboration is the new competition. While the industry has fiercely protected proprietary intellectual property, an always-on retail economy is raising shopper expectations for more personalized and intuitive shopping experiences. Said Mr. Lowy, “Are we going to free our data from its silos, leverage the power of our collective knowledge, and create more value for the customer?”
We are driven by data. And data is driven by scale. With collective insight into shoppers’ browsing habits, geo-location and online activity, shopping centers and retailers can make the most of data in real time to seamlessly blend digital and physical shopping experiences. Said Mr. Lowy, “If physical wants to compete with digital, it needs to be as good or better with the data.”
Make experiences matter — across the industry. Digital can “take some of the friction out” of physical retailing. Said Mr. Lowy, “Human interaction is still at the heart of what we love to do. When they’re done right, shopping centers can bring people together and give customers experiences that they simply couldn’t have anywhere else. But we also know that digital can create an added element of interest, engagement, and value to the customers in our centers.”
Discussion Questions
How open should retailers be to sharing data with shopping centers and even competing retailers to extend personalization across stores at shopping centers? Do you agree that data collaboration will be critical to elevating the shopping experience at physical retail?
Poll
BrainTrust
Jason Goldberg
Chief Commerce Strategy Officer, Publicis
Ryan Mathews
Founder, CEO, Black Monk Consulting
From Mr. Lowy’s point of view what’s good for the mall is good for all. However, WIIFM (What’s In It For Me) still rules the retailer’s data world.
Until a shopping center can demonstrate that data sharing generates more revenue for the individual store than they are generating currently I don’t see any of them being willing to share their data. This is especially true for the larger retailers whose companies have their own in-house sophisticated data analysis.
The biggest failure of shopping malls is not monetizing or taking advantage of premium parking space. A valet service takes away a lot of opportunity to truly engaged a mall customer. A shopping mall can offer pre-paid parking space on a monthly basis to attract influencers who shop frequently and share this data with multiple retailers to offer deals at the customer VIP parking space when they arrive.
Leveraging existing assets such as a secure parking space without the worry of door dents or smash-and-grabs and close access to the mall entrance is a nice give-and-take negotiation to introduce data sharing with multiple mall retailers.
I think these are two separate issues:
First of all, has anybody slowed down and asked themselves if consumers want to be digitally led through a mall like some kind of omni-consumptive baby in a capitalist bubble?
Nothing says “creepy” to me more than the idea that not only is Big Brother watching, but he’s decided to hold a family reunion at my expense and invited Big Sister, Big Cousin, Big Uncle and Aunt and Big Grandma too!
Is data sharing, as described by Mr. Lowy, possible? Of course, assuming you live in a world where trust and need exist in equal measure. Will that save malls, shopping centers and other forms of physical retail? I’m less sure about that.
This strikes me a bit like the old school approach to supermarketing adopted decades ago to address falling industry sales. If you remember your retail history, the “right” answer was to carry as many SKUs as possible, necessitating the building of larger and larger boxes. The only problems? The boxes were expensive to build and stay and it wasn’t the case that consumers didn’t have enough cooking options already, it’s that they had stopped cooking.
Before every mall operator starts rushing about randomly letting his or her brethren or sisteren take a peak at the proprietary shopper data hidden underneath their digital kimonos, I’d suggest they consider a consumer-based and data supported solution before they move to a full-blown data-sharing strategy in which the consumer is just fuel for the machine.
Ask yourself, do people — particularly the much dreaded and lusted after Milennials — really want to shop in physical stores as much as they used to, or can they develop their own truly personalized digital retail ecosystem online?
And if they can then they — not some guy running a discount leather goods operation or a big pretzel store — can determine who they share their data with.
Want to elevate physical retail? How about a complete rethink based on the realities of our times and built on deep insights of actual shopper needs?
The amount of data sharing between retailers and vendors is variable. Requests to share data with other retailers in a particular mall is likely to be met with variable responses. However, there is an opportunity to create experiences (besides events that so clog the mall thoroughfare that consumers can not get through to visit other retailers) that draw people to the mall AND to individual stores. To be successful at creating this type of consumer experience and have it work with individual stores it is essential to have some successful data sharing.
Apps don’t sell merchandise. People do.
Big Data is great but the devil is in the details. Just because you notice low conversion doesn’t mean you cut hours and manage down your business.
People shop to meet people, not for their smartphone to meet another computer.
Being recognized and greeted personally at a boutique I happen to frequent is one thing. Being recognized by every Tom, Dick and Harry retailer is darn scary.
Even Mr. Lowy’s comments are contradictory: “Data sharing is not about moving customers from one retailer to another,” said Mr. Lowy. “It’s about building the best customer experience for each customer.”
As retailers wrestle with building the best customer experience, they’d best not share it.
Data sharing will help retailers and shopping center developers understand who their customer base is and how to market to them as well as deliver a better CX. Sometimes sharing works. Nice to know more about all of the customers coming into a shopping center, not just your own customers. Might help the retailer better define their marketing and social strategies for that specific location.
First of all, a quick news flash to Jason Goldberg (who I think is pretty smart by the way). All us country boys ain’t left the farm (or the suburban ranch) yet. And we ain’t about to. As a matter of fact, there’s a pretty good argument for growth in somewhat higher density suburban “pods” as the Boomers go to pasture in the future. And our exurban community is still growing. I’m not sure what’s happening to the population of Ames, Iowa — but the whole world hasn’t moved to Michigan Avenue, yet.
That aside, I think Steven Lowy is on to something — even if it isn’t driven by revealing our digital diapers as Ryan Mathews suggests. The big idea in Mr. Lowy’s comments is to treat the mall as a single consumer activity destination. Not a “warehouse of stores” (love that term).
Perhaps I’m biased in my opinion by the fact that I have witnessed the transition of the Westfield Mall in Vernon Hills, IL (miles from downtown Chicago) from a deserted parking lot to “can’t find a space on the weekend.” From a typical dying suburban mall of shops and food courts bounded by Neiman Marcus, Marshall Field’s (yeah, we still call it that here) and Sears to a consumer experience.
In the past two years they have added Maggiano’s, Dave & Busters, and other unique food and entertainment experiences. The stodgy old multiplex cinema is now a wonderful place to experience the theater. Fully reclining leather(ette?) seats with lots of aisle space left over. In-theater dining, or take advantage of the full service bar in the lobby.
But the proof is in the foot traffic, right? Last Sunday the wife and I took in “The Revenant” at the 4 PM matinee. It was sold out. (Love that feature to buy your reserved seats online in advance!) When we left the theater at 7 PM we headed to Maggiano’s for dinner. A 45-minute wait on a Sunday night. We had to “settle” for a bar table at Dave & Busters. And it has been that way for two years now.
Deep dive digital data sharing may not be the key to the new mall experience, but Mr. Lowy and the Westfield team are on to something.
I think the elephant in the room is that in general, with a few exceptions, malls are struggling to drive traffic. I don’t think data sharing, if the retailers actually wanted to do this, would address this problem. There are some great examples across the country of malls that have great traffic. They have compelling, attractive anchor stores that generate reasons to drive to those malls. If the mall in question is a low-volume location, sharing data won’t drive new shoppers there, most likely.
Bottom line, look across the country AND the world (e.g., Shanghai’s “Explorium” by the Fung Group) to see what is driving traffic into malls.
The better question is, have customers left the malls or the stores that are in the malls? Real estate developers and property managers may need to observe the migration from the mall and solicit the patronage of the retailers that now enjoy the business of those consumers that previously shopped at the malls. But that’s just what I think.
Excuse me, but stalking…er “instantly recognizing license plates” and sharing that data with…anyone…strikes me as a great way to kill malls once and for all. Many malls — i.e. those that offer quality and/or unique offerings — are doing very well and don’t need “saving” (not, of course, that they should reject things that improve their performance); and rest: there are too many of them and many will need to be euthanized…gimmicks aren’t going to save them.
Malls in general are struggling to remain relevant as they face significant headwinds from changes in shopper behavior and demographics. The department store anchors that the mall operators rely on are also struggling.
Westfield’s quest to innovate and transform the customer experience is a good move to reimagine the mall experience and regain relevance with today’s consumer. Like most initiatives that rely on the cooperation of multiple different companies, Westfield’s vision is going to be extremely difficult to implement at scale.
If a deep understanding of customer data can be a significant competitive advantage for a retailer, then the odds of retailers sharing that data with a third party, let alone with other retailers, will be remote.
The opportunities to better understand customer behavior online and offline, through such tools as enhanced web logs and iBeacon, are so significant that retailers will not want to share insights with anyone else.
It is true that the mall experience can be enhanced through personalization drive by data. I just think no retailer will participate.