Technology enabling smarter location decisions
Retailers have long understood the value of technology to inform their business strategies and tactics. Early on it was traffic counters at the door to understand conversion, then customer relationship management data to gain insights on their customers and the interaction through the product lifecycle. More recently, mobile data to share brand information and track the customer journey inside the store. In fact, from traffic counters to assortment localization, to omni-channel capabilities, to self-service,to augmented reality and artificial intelligence; retailers have always understood the importance of technology, data, and analytics in the development of their business.
Today we see that desire for information and insights applied as retailers make real estate decisions. This is not surprising as new market entry and expansion takes significant capital making data, analytics, research, and demographics critical to ensure location accuracy. This intelligence enables retailers to make more informed decisions when it comes to the critical assessments of store locations. The pandemic has made historical data difficult to leverage requiring retailers to utilize predictive analytics to make location assessments. From migration to new ways of shopping (BOPIS, BORIS), to the impact of social media and marketplaces, retailers need to consume predictive data and analytics to optimize the four-wall performance of new locations.
Real estate firms are now investing in research and consulting expertise, data scientists, and new technology to assist their clients. Cutting-edge tools and sophisticated analytical techniques are being leveraged to understand consumer migration, customer demographics, traffic patterns, and co-tenancy changes to maximize a retailer’s capital investment and dollars per square foot productivity. Real estate firms are also investing in brokerage professionals that not only understand the value of this data but also have a deep understanding of the markets they represent. There is still an art to identifying real estate opportunities and the combination of this art and science drives the best outcome for the retailer. Real estate firms can now provide meaningful insights in the areas of:
Using a combination of AI-driven technology, mobility data and e-commerce insights,the curated information is carefully vetted to establish an analytical framework. The blending of these comprehensive data sources creates focused customer profiles for both existing and target customers and provides detailed insights into store performance to guide a data-driven intelligent growth strategy.
Landlords are also leveraging these data sets to gain a deeper understanding of the communities they serve so they can curate a better tenant mix and consumer experience. Consumer demands are dramatically shifting as generations of shoppers evolve, ecommerce grows, and new experiential and digitally native brands become new tenants. Landlords need to understand how migration has reshaped the community, the demographics of their consumers and what retail types will drive traffic. This holds true from office buildings to multi-family housing amenities, to sports and entertainment venues to traditional malls and outdoor shopping centres.
The pandemic forever changed the retail landscape. There are new ways of engaging with brands, new methods of shopping, and dramatic demographic changes in communities. New brands are entering the market and changing co-tenancy requirements. Predictive analytics and emerging technology can ensure that retailers and landlords make the best decisions to drive productivity, consumer-engagement, and profitability. The retail industry has always been driven by innovation and retail real estate leaders understand the importance of grounding key decisions in data, research, and analytics to ensure that retailers and landlords continue to drive profitability.
Barrie Scardina is the head of Cushman & Wakefield’s Americas Retail Platform and Jim Kierski leads consulting for Americas Retail Platforms