For optimal user experience, please upgrade your browser.
Westfield London Exterior

Investing in Experience

Floating Widget

Floating Item Container

Floating Rate Widget




Please Select
Your Rating

This article was published in the May 2016 issue of STORES Magazine.

Customer engagement technology crucial to reinvention of the shopping mall

When Kevin McKenzie joined Westfield Corp., it was his first job in physical retail — and he saw opportunity.

“The success of the Internet is based on bringing information to people anytime, anywhere. It blossomed to commerce on top of that,” says McKenzie, the company’s global chief digital officer. “I looked at our shopping centers and said, ‘They’re beautiful, they’re well maintained, they’re in some of the best cities in the world with the best architecture.’ But if you looked at the malls online, the [information] was out of date or wrong.”

That could not be further from the truth today. Through Westfield Labs, the high-end mall property owner’s innovation arm, Westfield is transforming the customer experience. But there are certain elements that mall owners don’t own, creating a need for more cohesive relationships with retailers.

“The mall and retail are linked, [but] in some ways they’re not,” says David Munczinski, founder and CEO of Brickwork, a company that helps retailers bridge online and bricks-and-mortar shopping.

“There’s an opportunity for mall companies to continue to invest in experience and continue to be centers for service. You see mall developers now rolling out concierge, personal shopping across multiple stores, focusing on local delivery.”

Bespoke Coworking

Devil in the details

One of the greatest pressures on malls today is to learn more about their customers.

“Most people know that 90 percent of retail sales happen within the physical walls of the store,” says Erin Armendinger, a consultant with RetailNext. “Physical shopping environments are behind e-commerce, by nature of the lack of information that they have available. There are a lot of ways that you can optimize shopping spaces if you have data and you know what’s going on.”

Using data can allow direct market research to focus on more meaningful questions, she says. “When you can use hard data to get answers to questions like, ‘Where do you shop?’ you can ask more probing questions of people in intercept surveys, the kinds of things that you can’t easily measure.”

The data can provide not only information for the leasing end of malls — such as which stores people tend to browse together and which are “one and done” — but also to improve the customer experience.

“There are lots of questions about where you put things like common area seating and charging stations,” Armendinger says. “You can use Wi-Fi and the same infrastructure to project heat maps. You can see where people are moving, how dense the traffic is.”

Data also can also be applied to another vexing issue: parking. “The best properties are measuring traffic,” she says. “They know what hours of the day traffic peaks, and staff accordingly. When you can use data and analytics, and try to shift traffic over with signage, that’s hugely helpful. It relieves stress and makes that visit to the property that much more seamless. The next time you need something and don’t have much time, you’ll go because you know you can pop in and out efficiently.”

Foot traffic inside the malls is equally important. Measuring traffic is “the basis,” Armendinger says, “and then you go on to things like demographics cameras to figure out if the people are male or female and what age. You can get pretty sophisticated, but the basis is knowing traffic and how long [shoppers] are staying.

“If you see the duration over time, you can then go in and do surveys. Could you put in a restaurant, an amusement place, to drive duration? And if so, does that make people spend more time and money?”

It is not as simple as getting retailers to share data with mall owners. “What if everybody knew what was going on and you could do it in a clean, secure environment? Everybody would reap the benefits. The retailers would be able to react and know what was going on in adjacent retailers,” she says.

“I’m not suggesting that brand A know what the sales are of brand B, but to know that apparel is selling better than home and jewelry at a particular property.”

Westfield London will launch an inside navigation system that provides instant updates based on customers’ location in relation to a store or another landmark in the building.

Getting around

While mall owners need to know how traffic is moving, it is equally important for customers to be able to get around. The static directory, even with downloads available via smartphone, is a thing of the past.

But navigating inside a property in real-time has been difficult, to say the least.

“There are satellites in the sky — that’s why we love Google maps,” McKenzie says. “But there are no satellites inside a mall. That was clearly a problem we needed to solve to make the experiences more in line with how people use technology today.”

Westfield London will soon launch an inside navigation system that provides instant updates based on customers’ location in relation to a store or another landmark in the building. The next step will be to allow customers to create a shopping list, then navigate to the stores that have the exact products on their list. Already available in Australia, the shopping list concept is set to deploy to Westfield properties in the United Kingdom and the United States.

“When building out a retailer’s online presence within the Westfield touchpoints, we’re dependent on how sophisticated technically the store is,” McKenzie says. “We do have some retailers that can easily provide real-time inventories. Others, we might just have a ‘click to call’ function, which is still a convenience in that our customers don’t have to look up or navigate away for the phone number.”

While Westfield does the heavy lifting in implementing these new technologies, it does not have the resources of a company like Google. “But we have found ways to stay invested in technology and innovation beyond our own staff,” McKenzie says.

In San Francisco, more than 50 companies participate in Westfield’s Bespoke, a space for coworking, events and technology demonstrations. “They pay to have the office space,” he says, “but they are really there because they want to be part of that community and share ideas and have access to physical ideas.”

Westfield Labs has also launched an accelerator program with advertising firm R/GA. Early- and growth-stage startups selected for the Connected Commerce Accelerator will gain access to R/GA and Westfield Labs resources as well as input from program partners like Macy’s, Shopify Plus and Verizon.

“We’re handpicking startups at an early, early stage that can help answer opportunities with support from some of us veterans,” McKenzie says.

Bespoke Demo

In San Francisco, more than 50 companies participate in Westfield’s Bespoke, a space for coworking, events and technology demonstrations.

A look at loyalty

Despite some successes, there remains a bit of a communications gap: Retailers can’t market to consumers effectively, and consumers receive limited added value for shopping at the mall.

Spring, a new loyalty platform, aims to change this by completely re-inventing the mall rewards program, connecting digital marketing to in-store sales through payment cards already being swiped throughout the mall.

At malls using Spring, shoppers link credit cards to their mall program account. Every time a linked card is used to make a transaction in the mall — whether for a pretzel or Prada bag — customers earn currency that builds toward cash back.

Using real-time spending and transaction data, retailers gain access to high-intent shoppers while they are in the mall and target promotions to consumers that fit a certain profile, structured by amount spent, time frame or specific location. Redemption of rewards is automatically administered by the platform with no involvement by retailers’ in-store associates.

“Malls have 2 billion consumer visits per year and hundreds of billions of dollars in retail sales,” says Spring CEO Bruce Mitchell, “but the activity has always been anonymous and disconnected. It is a huge amount of value waiting to be unlocked. Spring creates a digital connection with consumers, the ability to track transactions in real time and the ability to allow retailers to reward consumers directly to their payment card.”

Spring has a number of programs that are live and some 50 more being rolled out this year. It seems to have struck a chord with mall operators.

Malls see the transaction activity of the members in their program, so they can begin developing relationships with VIP shoppers, personalizing the shopper experience. “Once they’re on property, we can send a text that says, ‘Welcome back. Go to Guest Services for a bottle of wine.’ Or ‘Here’s your free valet parking pass.’ Or, between 11 a.m. and 2 p.m., ‘Here’s $10 off at a restaurant in the mall,’” Mitchell says.

“Consumers earn cash back for shopping,” he says. “Retailers gain a very different and performance-based way to market. Mall operators gain increased shopper data. … Plus, it all works on what everyone already uses: their phones, their payment cards and their existing point of sale.”

“When reporters say the mall is dead, I always tell them to go to a mall on a Saturday and then call me.”
Erin Armendinger, RetailNext

Mall of the future

Contradictory to the occasional attention-grabbing headline, malls are alive and well. “The mall is not going anywhere,” Armendinger says. “When reporters say the mall is dead, I always tell them to go to a mall on a Saturday and then call me. People want to see and feel and touch products. They want to interact with people.

“I don’t think the mall itself is going to change,” she says. “Retailers will change and get smarter. The mall itself will get smarter about measuring and putting hard metrics against experience, leasing and operations. Higher experiential properties will get higher rents and better retailers.”

It is certain that the mall experience is changing — and will continue to do so. Westfield’s McKenzie thinks small is the new big.

“You’ll have the entire mall experience on your phone, laptop or PC and eventually maybe in your car or on your watch,” he says. “It all begins wherever you find inspiration. Without ever picking up a phone to talk to a person, you’ll be able to access anything you ever need: Find out when it opens and closes, what’s trending, what products can you buy, what services can you buy and then purchase those products or book those services, and possibly even get rewarded for your purchases.”



Featured News

Episode 82 of Retail Gets Real: Bringing the best of online thinking into the physical world.

Download research, sign up for regional dinners, subscribe to newsletters and customize your view of the latest retail news. Login or create a MyNRF account.

NRF Membership

NRF members come from more than 45 countries and all sectors of retail, from Main Street merchants to online retailers.