Radical shifts in technology and consumer behaviour are compelling shopping centre landlords to increase the innovation stakes.
Many of the UK’s shopping centres were built 20 years ago or more – shoppers inside them often could barely get a phone signal, let alone wi-fi, and until recently few would have associated them with digital innovation.
But property owners are beginning to up their game and one or two are even starting to show retailers how it’s done.
Westfield Labs, for instance, aims to promote the kind of digital innovation that has so far been the preserve of retail’s big hitters such as Walmart and Tesco.
The tech department is working hard to come up with ideas that, it hopes, will help Westfield shopping centres keep pace with the changes taking place in the retail industry.
Westfield’s global chief digital officer Kevin McKenzie says the aim is to totally rethink the role the shopping centre plays in a consumer’s purchasing journey. He says: “We are thinking about the entire shopping experience, digitally and physically. More than ever, that experience starts for the consumer when they’re at home or in the office. That requires us as a company to really optimise our business for that.”
That means services to help shoppers plan their trip, making it as easy as possible to visit a Westfield mall. “It’s things like building the next generation of mobile apps that have up-to-date information about our properties and our retailers,” McKenzie says.
Inspiring through technology
For services that are used outside the shopping centre, adding convenience and providing information is the aim. But inside, inspiring shoppers takes on equal importance.
“In centres we are looking at things like digital store fronts,” McKenzie says. He adds that digital technologies can be used to inspire people and prompt them to visit certain stores.
Last year Westfield piloted an interactive digital signage project with eBay, working with shoe brand Toms, fashion brand Rebecca Minkoff and Sony. It launched digital store fronts at its San Francisco mall that enabled shoppers to buy directly from a digital window by scanning with their mobiles.
“We learned a lot from that first phase,” McKenzie says. “We learned that the consumer wants more and wants to see a lot of imagery on the products that are available from the participating brands.”
Another project, at Westfield Garden State Plaza in New Jersey, involves a six-foot high, 10-foot wide screen used to display images of products and marketing content. The idea is to create a sense of discovery for the shopper and there are now 20 brands participating.
“It’s about inspiration. It’s similar to a consumer browsing Pinterest but in the shopping centre,” McKenzie says. The screen can be used for one giant image, or it can be split into two or three sections. It is programmable from Westfield Labs in San Francisco.
Convenience is important inside the centre as well as outside. McKenzie points to a trial at Westfield London called Express Parking. The service allows shoppers to pay for and manage their parking on their mobiles, meaning no more queuing or rushing back to replace tickets that are about to run out.
McKenzie says Westfield Labs has about 20 projects on the go at any one time and is constantly on the look-out for new ideas.
One element that is non-negotiable, however, is the use of mobile technology to help shoppers navigate their way around a centre.
“It’s safe to say we all use Google Maps or the equivalent – that navigation is quickly going from not just outside but inside buildings as well. We need to take responsibility for that and have at the most basic level information about our building – how to get there, what’s inside, it all needs to be digitally prepared,” McKenzie says.
He observes that has been a challenge for many retail landlords. “It’s a different skillset and way of looking at the world. These are new technologies that most landlords have never used before.”
For Westfield and its Labs department, it is important that there is a decision at the executive level on a course of action that puts digital first.
“We have to give credit to our chief executive. It starts with him. Most companies would make digital part of marketing, but [co-chief executive] Stephen Lowy chose to make it a department that reports directly to him. He’s using this group not only to create new experiences for the shopper but also to think about new ways to operate the business,” McKenzie says.
Which doesn’t mean, of course, that landlords’ marketing departments are unlikely to gain from digital innovation – marketing is likely to be the area that benefits most.
Other landlords’ use of iBeacon technology demonstrates how marketing in shopping centres is changing.
British Land-owned Meadowhall has launched beacons in collaboration with start-up TagPoints, and used them to send shoppers offers during a ‘Ladies’ Night’ event in May.
Hammerson is also rolling out beacon technology, which sends a signal to shoppers’ mobiles in a similar way to wi-fi, across its European malls.
The Bullring in Birmingham will be one of the first to get the beacons, which take the form of small devices placed around a centre. They can locate a shopper whose phone is switched on to within a metre, and can send messages to the phone based on where it is – so retailers could send messages to a consumer as they walk past their store, for instance.
In Hammerson’s case the beacons are used through its app. Shoppers must part with a small amount of personal information in order to use the app, meaning retailers in its shopping centres can send messages through to groups of consumers based on their age, gender or demographic.
Hammerson’s head of multichannel Sophie Ross says: “We have a customer relationship management dashboard that enables retailers to send offers to specific customers. It will be an ongoing process of learning and understanding customers and working with retailers to develop.
“You’ve got to start things off simple – you need volume and you need people downloading it. As we learn more we can see how they’re shopping and become more micro-segmented.”
She points out that the aim of the app and the beacons is to get the right type of shoppers to the right types of stores, increasing spend, frequency of visit and dwell time in the process.
And the data will be useful – Hammerson hopes to start telling retailers how particular types of consumers shop and how they use shopping centres.
McKenzie says the present shift in retail is similar to the change that happened in the entertainment business in the late 1990s, with the advent of online piracy. “[Cinemas] reinvented themselves as destinations for people. Now you have a [retail] consumer who doesn’t know the difference between online and offline because their phones are so close to them, and that requires the landlord and the retailer to work together to optimise these buildings to work well with technology.”
That necessitates good wi-fi, excellent information and experiences people can interact with. It also increasingly means landlords need to be involved in the delivery stage of the purchase journey.
“Click-and-collect is very popular here in the UK,” he says. “We’ve used third parties to support that but I think we can do a better job. We can optimise our buildings for delivery, and we are thinking about trying things like same-day delivery – how we can actually create services on our buildings, not just showroom stores.”
Just as retailers must experiment and try out new ideas, so too must landlords – and as convenience and experience are two of the trends driving retail’s development, it’s a journey they’re on together.