The retail sector is at a really interesting point in its life. Why? Those involved in the industry both as providers of goods and services and as owners of space are all trying to understand how can we continue to develop our offer to remain relevant to what is a continually changing consumer base, shifting of consumer preferences and shopping habits and rapid evolution of technology that is aiding these changes. How do we best match and update our offer to the consumer given the preferences change so frequently? Simply put, it’s not easy and takes some very different thinking from how we have traditionally developed and showcased our assets. The exciting part for all involved though is this should create some real idea generation and some great opportunities in retail to experiment and develop new products and offerings not yet explored in a retail context.
With a backdrop of relatively flat sales, it is now even more important that a shift in how we think about our assets and set them up for future change gains more rapid momentum. The consumer today has so many more avenues to buy that to remain static, will lead to a swift exit from the retail sector both for the retailer and owners of space.
For ISPT, there are a number of key areas of focus for the business, some around new thinking and changing our mindset on retail and what it is and some around ensuring we continue to do the basics exceptionally well.
These have remained fairly consistent over the last few years but with each year passing, we look deeper into these areas, understand better how they can really align back into retail thinking and who in the business world are we able to partner with to develop with us new thinking and implement. This translates into a number of areas being;
1. Data – how much, how often and what type to make better investment decisions.
2. Digital interaction – ensuring there is a convenience element or making things simpler to do in introducing this to the market.
3. Basic customer service – what you stand for.
Having a clear view on these three areas and their link into retail and the use of space while continuing to challenge, test and adapt as needed is fundamental to setting your business up to be able to prosper in a very competitive environment.
Data and how we use it
While the use of data and the rapid expansion of its availability has been incredible, there would be very few businesses out there that would say they have a truly exceptional data strategy and one where the whole business is completely aligned. The real challenge for us and many others is not so much about capturing the data – it’s everywhere and readily available – but what do we capture and what decisions are we going to make of it?
This is absolutely a journey ISPT is on, partnering with sophisticated entities outside of the property and retail sector. The need for a change in skill set within businesses will also be critical with the introduction of more data scientist and analysts to interpret the data for use by property teams and even machine learning as part of the business capability. With the huge data sets available, machine learning should be a consideration to enable quicker and more accurate decision making with reduced risk. It will also enable you to adapt and change direction if needed with far more efficiency than what has occurred in years gone by.
The ability for our marketing teams to enable more tailored and bespoke campaigns with more sophisticated data will reduce huge wastage in time and money and provide the consumer a far more compelling and relevant offer. The ability to work with our retailers to harness our collective data is also exceptionally powerful and overtime, should be an area where teams within these businesses work hand in glove for the benefit of the consumer.
I saw some great examples of the possibilities of data used well on a recent study tour through the US with a visit to Microsoft’s headquarters and their retail experience centre. Their use of predictive technology through huge data sets gave the touring group a fair bit to think about for retail application. While predictive technology is not a new phenomenon having being used in the health and transport sector for many years, I don’t believe retailers or us as space providers have truly understood where it could assist our industry. Re-engaging with consumers that stray from your brand or asset and predicting when this is likely to occur can assist with targeting this group to remain loyal.
Which data, how much, how often and from what sources will continue to be questions we strive to better understand for practical application through our portfolio and to grow and support our business and that of our retailers.
Digital interaction
I recall reading an article some years ago stating there were two types of shopping. You are either going shopping or you are doing the shopping. Going shopping was seen more as a leisure activity and catch up with friends and with the intent for it to be a fun and engaging experience. Doing the shopping was seen more as a chore, somewhat like mopping a floor or watching The Bachelor.
I see with the continual evolution of digital technologies, there may be the opportunity to take the grind out of shopping. New innovations like the advent of one tap purchases either by card or phone, digital wayfinding in centres and in stores on your phone, click and collect, Amazon’s Alexa and Google Home and Amazon Go (frictionless checkouts) should all free up time and allow us to undertake more of the ‘going’ shopping element. I was interested to see recently Woolworths supermarkets exploring which digital technologies could be used to assist their customer experience in what I would see as a ‘doing’ the shopping exercise. An opportunity they saw around scanning technology that allows any part of the product you are purchasing to be scanned with potential time savings at the checkout of 30% is something that digital innovation and interaction can play a key role in. Such advances have to be continually explored and trialled to meet the high expectations of the consumer. If there are digital opportunities for both the retailer and space provider that improve the efficiency, speed and elevate the enjoyment of doing the shopping and give the consumer more control and convenience, then we should all embrace. While technology can enable much change in our industry, we need to make sure shopping at our centres still remains a people business with the ability to excite, enable exploration and interaction with each other and the communities they sit within.
Basic Customer Service
While we all look to advance our businesses with the use of data and digital innovation, it can never be underestimated how important it is we continually aim for excellence in customer service. This manifests itself in areas such as the most functional parents rooms, the most convenient and navigable car parks, attentive and personable concierge, knowledgeable staff about their product, an environment that provides high standards around safety and security but is also inviting, ultimately aiming for a centre and stores that consumers want to visit and return to.
Through our US tour, we saw some exceptional examples of this through two well-known brands in Nike and REI. Nike as a leading global brand has its store environment and staff working so well together, you feel compelled to buy their products when you walk in. Without exception, the five-plus Nike stores we visited were world leading in their offer and customer service, be it the basketball level where you can actively play one on one with the in store Nike staff, the product display telling you the whole Nike story from its grass roots to the explosion with air Jordan or the design your own t-shirt and shoe bar. Their in-house concierge greeting you at the store entry in their flagship stores also set the scene to invite you further into the whole Nike experience.
Recreational Equipment Incorporated (REI) is also another exceptional example of what customer service should be. Over three levels in Seattle, we saw what is regarded as one of the best outdoor recreational product offers and services globally. While the products themselves were of high standard along with a sensory overload on fitout and scale, it was the staff service and membership offer that stood out. Voted in Fortune magazine’s top 100 best companies to work for every year since the rankings began in 1998, this has translated into the passion the staff have for the business, the knowledge on the product and what they deliver to the consumer. They have a very unique co-op membership which allows staff and the public to join at low cost ($20), which provides you lifetime membership to REI. This allows members to build up points and be provided an annual dividend to redeem on purchases for new products or services, provides an opportunity to exchange points for cash and also aggregate points amongst the family to make large purchases. It also allows a perpetual 10% discount on all products. The membership also allows you to vote each year on the board of directors allowing those loyal customers to influence the direction of the business. In past years, the business has paid dividends to its customers upwards of $170 million.
While both businesses have built up their product offer supported by clever marketing campaigns, the basics of good customer service done well still resonates and rise to the top when it’s all said and done. You could not fault them on this. They are giving a reason for customers to come back.
The opportunity to reposition and rethink how ours assets operate in a rapidly changing world holds excitement for our business. In five years’ time, it will be good to reflect back to see just how much has changed and perhaps also reflect on how some things such as exceptional customer service may have remained the same and still as important for the consumer.
WATCH SAM CURRY SPEAK AT THE BIG GUND LUNCH – VIDEO LINK HERE
About ISPT
ISPT is one of Australia’s largest unlisted property funds managers, with over $14 billion of funds under management through our investments in office, retail, industrial and residential property. Founded in 1994 as an unlisted property trust by four leading industry superannuation funds, we now have 31 institutional investors representing a diverse base including industry superannuation funds, public sector super and investment funds. ISPT invests the retirement savings of more than 50% of Australian workers into property.
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