Boosting mall performance through analytics
The way in which people shop has been slowly changing. With the rise in popularity of online shopping, people can get anything they like delivered to their door, so the reasons they attend malls is for the whole experience. More than just shopping, malls now and in the future are about giving visitors unique experiences, sometimes referred to retail-tainment. Shopping malls are environments where people gather to meet friends, connect with like-minded shoppers and interact with brands – with the expectation of a seamless experience between online shopping and instore purchasing. The extent to which this trend is developing varies across the world, but Asian malls have come far in meeting growing customer demands for a richer in-mall experience.
According to a report by AT Kearney entitled, The future of shopping centers, mall operators will need to master two sets of technologies to achieve a seamless customer experience:
- Technologies consumers use in their daily life to communicate and conduct commercial activities, such as mobile phones, tablets and their applications
- Technologies businesses do and will use to identify individual shoppers, track purchases, calculate dwell times, analyze behavior, communicate with customers, and create real-time merchandising, marketing, advertising and promotional opportunities.
Generalization is always a risk, but research and experience indicate that many mall operators lag behind their tenants when it comes to using advanced analytics for the above.
How malls can improve with analytics insight
Tenants in malls commonly pay rent based on a fixed sum that reflects its location in the mall, size and configuration of the unit rented, plus a percentage of sales. In return, they expect the mall owners to generate traffic and footfall to their store.
Mall traffic reflects the sales opportunity generated by the shopping center, mall to store conversion then reflects how well the tenants capture that opportunity and ultimately convert it into sales.
Counting visitors provides insights in mall activity, trends, peak periods, and some top-level impact assessment on effects of additional factors such as the weather, holidays and promotions. Visitor counting data can also give insights into the best timings for running daily marketing campaigns to drive consumers in store.
Mall operations managers spend a lot of time determining the best mix of stores for the mall’s catchment area. Visitor counting paired with other data, for example demographics insights (such as age and gender), can help with this by comparing the popularity and performance of different retail store locations within the center, as well as cross store visits, to see what sort of consumers visit the mall and how they behave while there.
Another important area for mall operators that also relates to customer behavior is optimizing the site’s layout. Using analytics like visitor counting, dwell time and heatmaps, operators can lead to a sound understanding of customer flow in the mall. This includes identifying hotspots and bottlenecks in the layout and assessing layout changes, as well as showing the impact time-based activities, such as pop up stores have on in-mall experience. This intelligence can then be further applied to assessing the impact potential tenants will have on the mall and even extended to helping inform rent pricing structures.
For mall operators who want to instill a culture of fact-based decision making in their organization, collecting reliable and valuable data for informed business decisions analytics provides is a good benchmark from which to start the journey.
More information on retail analytics for shopping malls can be found here.