Vision 2020 Retail: The mall’s rebirth
Indoor analytics provides a new opportunity for mall and department store growth
Two decades ago, the shopping mall was the hub of public life. Anchored by brand-name department stores that real estate developers competed to attract, the mall was where teenagers congregated and the first place their parents turned to buy a new winter coat or washing machine. With the increasing influence and convenience of Amazon and shifts in consumer behavior, shopping malls began to lose their status in American culture.
We’ve been hearing about this decline for years. About 5,524 major retail stores closed their doors in 2018, with Toys “R” Us leading the pack in terms of sheer number of stores. By category, apparel specialists closed the most locations – 766, with 408 of them Payless ShoeSource stores alone. And real estate research firm Reis found that 2018 vacancy rates for regional malls rose to 8.4 percent, with many a hollowed shell of their former selves.
The fall of the mall
The convenience and digital experience delivered by the likes of Amazon and Alibaba haven’t to date been widely available in shopping malls, which were “built for patterns of social interaction that increasingly don’t exist.” Competition for the consumer dollar is fierce. Many failing malls and department stores are falling behind in implementing new technologies that drive customer experience.
However, if you look around at some of the country’s most valuable malls, as defined by annual retail sales, the first thing you’ll notice is their aggressive approach to innovation. Take, for example, the Ala Moana Center in Honolulu, which has an asset value of nearly $6 billion and more than 350 tenants, including Target, Neiman Marcus, Macy’s and Nordstrom. The mall offers a consumer experience that goes far beyond a “you are here” map, with visitors able to use first-of-its-kind augmented reality that helps customers discover a new shopping experience.
So why do malls like Ala Moana and its tenants flourish while others are facing ever-increasing rates of store closure?
Lure and retain customers
For many of today’s most successful malls and department stores, the secret to success lies in using data to make smarter, informed decisions about how to acquire and retain customers. These successful retailers use indoor analytics to uncover insights from their data: where and how long customers stay in the mall or a specific store, what it takes to drive them to enter a store and what causes them to make a purchase once they’re inside.
Malls and retailers armed with these types of insights have an opportunity to act with agility when trends or market changes occur. They can predict customer demand, identify unmet customer needs and optimize pricing to drive greater revenue and customer satisfaction.
Retailers can then use this technology to create personalized shopping experiences, making it easier for customers to come back. Have you ever forgotten where you left your car in the mall parking garage? At the 2.4-million-square-foot Ala Moana, shoppers receive parking tips and set parking reminder on their phones, so shoppers never waste a minute wandering around, pressing their key fob, listening for the beep of their car. It’s these small kindnesses that smooth out the customer experience, making the likelihood of a customer returning that much higher.
Adobe Experience Cloud is testing a new technology that will empower retailers to understand and act on in-store shopping behaviors. The technology drives highly personalized experiences by displaying live foot traffic in stores and enabling customer segmentation for push notifications on relevant offers. Imagine, for example, visiting your favorite store and getting a push notification to your phone about a sale for a product you’ve been researching online.
A number of malls and departments stores are already implementing cutting edge shopping experiences that will help generate improved analytics. When Neiman Marcus brought the MemoryMirror to their cosmetic counters, it not only gave the customer a unique shopping experience, but also enabled Neiman Marcus to capture data on customer shopping preferences, which they can use in the future to tailor offerings to each customer.
Shoppers use smart mirrors, like MemoryMirror, to record make-up sessions, get 360 degree views of outfits, review previous try-ons, and share the experience with friends via their phones. More than the novelty of the digital experience, the data being sourced by smart mirrors has the potential to be used to predict shopper behavior and nudge them to buy new products.
What lies ahead
The traditional shopping mall has had a bumpy ride in recent years, but it’s far from dead, and indoor analytics is one of the keys to future growth. It empowers malls with the insights needed to make better business decisions, from how to drive consumer behavior to how to optimize layouts, the effectiveness of special offers and even how rents differ depending on location. Indoor analytics is also a first step toward omnichannel engagement, which has the power to enable malls and department stores to thrive for decades to come.
To learn more about how analytics can help deliver unified, personalized shopping experiences to every customer, sign up to receive our next blog post.Etiquetas: Adobe, Analytics, Analytics, BI, Big Data, brick-and-mortar, Business Intelligence, department stores, Digital Transformation, indoor analytics, malls, multichannel, omnichannel, predictive analytics, prescriptive analytics, retail apocalypse