Shopping centres and technology at first seemed like adversaries, then uneasy bedfellows, but now they are positively united – or at least they should be.

Shopping centres are introducing initiatives such as digital screens

How do you spot a tipping point? When something unusual becomes everyday, or when a service or facility becomes expected? In most cases it is a quiet crossover point, and the UK’s shopping centres seem to be going over one such threshold right now, as they increasingly embrace technology, and wi-fi in particular.

Land Securities got the ball rolling when it revealed earlier this year that it would install free wi-fi and a price comparison programme in all its 22 centres.

The owner of such big shopping centres as St David’s in Cardiff and Cabot Circus in Bristol made the at one time controversial move to create a “seamless experience for customers”. The company said at the time: “We have got to get over ourselves and realise the internet isn’t going to be the end of the property industry. The two can co-exist.”

Initially launched at the White Rose Shopping Centre in Leeds, the scheme was rolled out with Sky subsidiary The Cloud and was supported by retailers including Debenhams, Topshop, Warehouse and Oasis.

Land Securities is at the forefront of technological innovation and was the first UK mall owner to install Amazon collection lockers in some of its shopping centres. The lockers enable customers to pick up orders from deposit box-style units. The first installation was at One New Change in the City of London. British Land, meanwhile, launched a delivery collection point at Meadowhall earlier this year in partnership with Collect+. It enables online shoppers to pick up merchandise or return goods.

However, free wi-fi remains a contentious topic among retail professionals, who divide into two camps: those who believe it encourages non-store purchasing and those who feel that its incursion is inevitable and might as well be embraced.

Many of the latest developments have come about because of the rise of the ‘showrooming’  phenomenon. First noted in the US by retailers such as electricals giant Best Buy, the term describes a consumer who comes into a store to check out products and prices, then uses their mobile device to price compare and make a purchase online.

It caused such concern that Best Buy initially created barcodes that could not be scanned by mobile devices. Retailers have since abandoned such techniques for more fundamental rivalry – such as Dixons’ decision to pare down costs and start to compete more aggressively on price with pure-plays.

Cyriac Roeding, co-founder and chief executive of Shopkick, a US-based loyalty app, believes  mall owners need to deliver footfall to persuade retailers of the virtues of a store presence. His own business provides a loyalty system that awards points to consumers coming to a mall, then a specific store, plus further points for purchases and spending above certain basket thresholds.

Describing showrooming as “scary as hell”, he nonetheless insists that shopping centres must open up to technology, stressing that “the only successful walled garden right now is Apple”. UK retailers seem to have welcomed the introduction of technology into malls, believing it provides them with more flexibility.

Debenhams head of international business development John Scott says bringing wi-fi and technology into malls gives the retailer more flexibility over its formats and the store size it requires, with its own wi-fi helping store staff drive sales across channels.

John Lewis managing director Andy Street, meanwhile, highlights the benefits of click-and-collect and online in supporting the retailer’s smaller format store developments in Exeter and York. “If we can develop smaller stores they make less financial demand on new developments [because of the concessions department stores achieve], which means it is more financially viable to develop smaller schemes more appropriate to their location,” he points out.

Shopping centre owners are keen to stress that technology enhances the retail offers. “We see wi-fi and emergent technology as a direct complement, not as a threat to the offer at our centres,” says Ben Tolhurst, asset manager at Hermes Real Estate, who is in charge of destinations including The Centre:MK in Milton Keynes, The Friary Centre in Guildford and Royal Victoria Place in Tunbridge Wells. “Given that technology is now such a fundamental part of the world of the modern shopper this ought to be considered as a basic part of a shopping centre’s offer.”

Tolhurst believes that the relevance of initiatives that employ new technology is dependent on catchment and shopper profile. “So if your customers want it, providing wi-fi access, using Facebook ‘check in’ technology and developing shopping centre apps for example should be fully embraced and incorporated within a wider asset management strategy.”

The Centre:MK has introduced a series of initiatives based around the use of digital screens and access to wi-fi, and an ambitious augmented reality project.

All the more reason

Wereldhave shopping centre asset manager Ailsa Davidson is overseeing the installation of free wi-fi at the investment company’s shopping centre in Ealing Broadway. It went live in mid-August, after an initial trial at the Dolphin shopping centre in Poole. In the first month 231 visitors used wi-fi and there was a 40% rise in smartphone usage on the website.

“We have to retain the differentiation between lifestyle shopping and internet shopping, which technology allows us to do,” says Davidson. “Wi-fi gives us an opportunity to partner with retailers to showcase promotions and special offers.”

Davidson says technology should “provide extra reasons for people to come to a mall” and likes the sense of event that the right types of digital technology can add. “It’s bringing the practicality of the Amazon lockers or the theatre of a QR shopping wall,” she says. “We’re looking to partner with more brands and we’d love to have a shopping wall in one of our centres.”

Another property group opting for free wi-fi is Hammerson. Retail portfolio director Martin Plocica says: “Through our multichannel strategy we are focused on ensuring our digital presence matches the quality of our physical space.”

Free wi-fi has been installed in the Ealing Broadway shopping centre

Free wi-fi has been installed in the Ealing Broadway shopping centre

That strategy includes mobile-enabled websites rolled out across the portfolio and single sites that integrate with social media and other platforms such as Google Product Search.

Plocica says mobile technology will become increasingly important for landlords to engage with customers to drive sales conversion. “We are already trialling location-based promotional tools in two of our centres, which are delivering encouraging early results, and our entire shopping centre portfolio will offer free public wi-fi to all customers by the end of the year,” he says. “Consumers’ use of technology is part of their everyday lives.”

He cites the first House of Fraser click-and-collect store, which opened in Aberdeen’s Union Square, as a success. “The convenience of the store pick-up for consumers in a city centre location and brand presence for the retailer has been a great combination,” he observes.

House of Fraser has a second such store at Grosvenor’s Liverpool One shopping centre and other retailers have mooted the possibility of dedicated click-and-collect stores or hybrid locations.

HobbyCraft chairman Simon Burke believes it is time for a different mind-set from retailers when it comes to embracing technology. While multichannel retailing through in-mall wi-fi, click-and-collect and online returns may confuse the picture of in-store sales, he believes retailers have to end their obsession with store productivity. When identifying the sales route, he advises, “we’ve got to stop focusing on store profitability and focus on customer productivity”.

Mark Bourgeois, managing director of shopping centres at Capital & Regional, echoes this need for a sea-change: “The merger of online and offline seems inevitable. It’s only a matter of time before malls offer general click-and-collect points, and the days of trying to repel technology are surely over. You can’t turn back the tide.”  n

The real thing

When Hermes’s The Centre:MK in Milton Keynes decided to focus on technology to enhance the shopper experience and drive footfall, it started with the advantage that the whole city has free wi-fi, which its shoppers can tap into.

The scheme’s major focus of investment on technology has been to create points for 28 42-inch screens around the centre, which carry a combination of information, wayfinding and advertising, plus local area information.

The Centre:MK head of marketing and communications Melanie Beck says customer satisfaction, especially with finding routes around the centre, immediately improved.

“We integrated the screens with our Bliss loyalty programme, so shoppers can use their mobile technology to print off promotions within the mall,” she explains. “This gives shoppers another reason to come and because of the amount of marketing activity going digital, we have also saved significantly on marketing print costs.”

One particularly ambitious campaign launches this autumn when the centre rolls out its first augmented reality project. Visitors will be able to search for and download via their mobile phones virtual ‘balloons’ around the centre, which will reward them with escalating offers and prizes.

The virtual balloons will be located at different parts of the centre on different days, encouraging exploration and loyalty. Based on the results, a new initiative will be rolled out in the run-up to Christmas. A real hot air balloon will also tie into the theme, as the centre combines the real and digital worlds.

“We believe it is something genuinely ground-breaking and will bring together the physical shopping world, visitor numbers, traffic to our website and mobile app and create a sense of event,” stresses Beck.

Tapping into the social shopper

The next generation of ‘social shopper’ is expected to emerge by 2021, when 41% of the UK’s consumer population will be influenced by or using social media to make a purchase, according to research from bank Barclays. Among 25-to-34-year-olds, this figure is higher still with 45% of this age group already engaging in ‘s-commerce’ and by 2021 the figure is predicted to have risen to 73% of the demographic.

Richard Lowe, head of retail and wholesale at Barclays, says: “When someone you know and trust makes a recommendation it’s extremely powerful and we’ve seen that the social shopper isn’t afraid to express online how much they want, love or dislike a product or service.”

Barclays expects that in the UK ‘influenced sales’ will more than double from £1.4bn now to £3.3bn in 2017.

Earlier this year retailers including House of Fraser, Tesco and Primark announced that they had teamed up with American Express and Foursquare to offer customers location-based deals. The service allows customers to collect savings when they ‘check in’ to foursquare when they are in particular shops – once their location is logged on their mobile device, the savings are automatically credited to their American Express card account. American Express said the deal will drive footfall for retailers, and increase engagement and loyalty among customers, and all three retailers are running promotions that allow customers who spend £10 or more to get money back. Other participants include restaurants such as Pizza Express and Strada.