Skate to Where the Puck is Going to Be

#LetsGetSmart – Skate to Where the Puck is Going to Be

 7th July 2017    Mary Keough


John SherryJohn Sherry, Director of Client Services at AMP Technologies,
a cloud-based real estate asset management platform based out of San Ramon, California, focused his talk on how mobile applications, more commonly referred to as “apps,” are transforming retail.John is a colleague of Craig Wood , who also spoke at #LetsGetSmart.

John began his talk with a quote from the great hockey player, Wayne Gretzky. Gretzky once said of his strategy on the ice, “I skate to where the puck is going to be, not where it has been.” John said that for retail, this quote encompasses the idea that apps need to be focused on the future. It is imperative that business team members today think outside-of-the-box as they work to meet consumers’ changing needs. John believes that above all else, apps need to be simple and easy so that every consumer can access them.

John cited one example of a colleague who was in San Francisco when he met two app developers who created Partender, an app that allows people in the bar and restaurant industry to get the full inventory of an entire bar by using a smartphone camera.  In speaking of thier success, John said that these two developers, “didn’t think outside of the box, they created their own box,” adding that “that’s really what you have to do today because there is so much competition.”

John cited apps like AirBnB, HotelTonight, and Chewy as being successful because of their simplicity and efficiency.

He went on to discuss a statistic that indicated a huge market for apps such as these, stating that “this is the best, most exciting time for apps that retailers could ever have.” On a daily basis, the average person uses eight apps; in a month, the average person uses about thirty. Thus, the opportunity certainly exists for retail industries to capitalize on the popularity in general of smartphone apps. John said that for retailers, the key is thinking about what consumers need and how to deliver it to them before they even realize their own need.

John discussed one app, PricePatrol, that allows a person to look for a product in his or her area and compare which retailer has it closest and cheapest (with the goal being to make the product more accessible to the consumer than even Amazon’s 2-day shipping could). John applauded this app as something that is quick, simple, and easy to use.

The big retailers are trying to differentiate themselves from a social media standpoint, working to get millions of users in touch as they post about discount items. As John said, “the mobile shopping revolution is going to be here to stay, and retailers can either beat it or join it.”

John also believes businesses should strive to use apps as a way to enhance the customer experience. BestBuy, for example, has created an app that allows the consumer to scan QR codes, compare prices, and track purchases in a simple way, thus improving the customer experience through an app.

Likewise, the Target app allows customers to set up registries for weddings and baby showers by simply walking around the store and scanning items that they would like. In this way, John believes Target is creating an experience for customers that is simple yet fun.

When asked what his favorite application is, John pointed to PipeDrive, a simple, easy-to-use app that can track all of a company’s deals, contacts, and communication. He also cited HubSpot as a favorite, noting one particular aspect of the app that allows users to schedule emails that need to be sent in the future so that the user does not forget about them.

In conclusion, John said that in this day and age, companies need to be mindful of creating cohesion within their platforms. “All the channels matter so it’s just not going to be apps that matter, it’s going to be store, online, and mobile,” John said, echoing the same ideas of the other speakers from #LetsGetSmart17.

Watch John Sherry’s talk at Let’s Get Smart:

Mary Keough is a recent graduate of University of Virginia, where she earned her bachelors degree in psychology and her masters degree in teaching. She is looking to pursue a career in elementary education. She can be reached at [email protected]

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Data Must Drive Customer Engagement

#LetsGetSmart – Data Must Drive Customer Engagement

 28th June 2017    Mary Keough

Craig WoodCraig Wood, Vice President for the Western Region for AMP Technologies focused his talk at #LetsGetSmart on using digital technology to improve the retail sector.  AMP Technologies,  is a cloud-based real estate asset management platform based out of San Ramon, California. Craig has been working on the technology side of retail for nearly twenty years. Before joining AMP, he worked with AT&T on the partner side of the business helping early stage companies.

Craig began his talk by discussing the idea that although many people have recently made claims about the decline of physical retail, it is by no means a “dead” industry; rather, it is merely changing as our society moves from an industrial one to a technology-based one.

While Craig credited some companies like Amazon for making online retail fast and convenient, he also points out that humans are by nature social creatures and that many researchers are coming out with studies that point to the negative effects of sitting in front of a computer for hours on end.

In fact, Amazon itself is working on creating physical retail in addition to its online presence, recognizing that while shopping over the internet is convenient there is no replacement for the social interactions a shopper gains from going into a physical retail space. Thus, the challenge for businesses today is to figure out the optimal balance of online retail and physical retail.

Craig used the example of the changing look of physical retail to transition into one of his main points: in a technology-based society, the real key for businesses is data. “What matters the most is who has the most data, who has the greatest insights, and most importantly who can execute on that data the fastest,” Craig claimed.

In a marketplace that is changing quickly, Craig encourages businesses to streamline their data and assess how quickly they can access and respond to it. “I have come into the real estate world and the retail side of things from a technology background, and what has been most amazing to me is the lack of automation that exists in the real estate side of things.” Craig believes that many businesses can cut out manual data-sharing and move toward unified insights that allow them to access their data in an instant. Optimizing data in this way allows a business to quickly access the information they need, allowing them to be more nimble and efficient as they work to outperform opponents.

In general when it comes to handling data, Craig claimed that “those who can move fastest will win.”

As Craig concluded his talk, he opened up the stage to the audience members to ask questions, who focused their questions on how businesses can use technology to their advantage in today’s industries.

One member asked Craig how he thinks companies can continue to use data to improve, citing that Walmart has been using real-time data from its stores and warehouses for years. Craig explained that in this sense, an area that retailers will move toward is the “instant fulfillment” model; he predicted retailers will spend more money in the future on expedited delivery options (in a similar way to UberEats’ recent rapid delivery model).

Another audience member asked Craig more broadly how businesses can use technology to their advantage while competing in the market today. In response, Craig made three suggestions. First, he pointed out that businesses need to look at their data in-house and figure out how to optimize how quickly their team members can respond and collaborate within their platform. For example, businesses should look to cut down on emails and attachments and replace them with the collaborative tools available today. Second, Craig suggested that companies make having a successful online presence a top priority, especially in terms of boosting web traffic. Lastly, Craig suggests that businesses focus on and evaluate how all of the aforementioned aspects of their business come together cohesively.

Finally, Craig responded to a question from an audience member by discussing what he views as successful tactics from online retailers today. Craig discussed that smaller brands that focus heavily on consumer engagement are seeing some of the greatest successes online today, which can be a more difficult aspect of business for the larger companies like Amazon and WalMart. Lastly, Craig pointed out the importance of working against what he calls “cultural inertia” within companies, meaning that company leaders should continue to be open to new strategies and perspectives rather than get stuck in their old ways.

Watch Craig Wood’s presentation at #LetsGetSmart:

Mary Keough is a recent graduate of University of Virginia, where she earned her bachelors degree in psychology and her masters degree in teaching. She is looking to pursue a career in elementary education. She can be reached at [email protected]

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A DATA-DRIVEN LOOK AT THE FUTURE OF RETAIL

#LetsGetSmart – A Data-Driven Look at the Future of Retail

 13th June 2017    Ben Perlmutter

Pamela FloraPamela Flora discussed various trends in retail that her research has uncovered during her #LetsGetSmart17 talk at ICSC RECon. As the director of research at Cushman and Wakefield, a global real estate services firm, her work involves conducting general research that identifies trends in retail and publishing analyses of this information.

Pam began by  discussing the media’s negative coverage of retail. According to the media, the state of retail is dark: “it’s the armageddon, the apocalypse, and the world is coming to an end.” Her vivid description of the media’s take on retail drew laughs from the crowd.

Supporting the media’s reports of doom and gloom, Pamela noted that retail stores closures are at their highest since 2010. Four thousand stores closed last year and over 8,000 are projected to close this year.

Despite these dark figures, There are things to be hopeful for in retail, Pam reassured the audience. While many big stores are closing, there are many new concepts coming out in the food and entertainment sectors that are promising for retail.

Such changes are occurring because the economy is fundamentally moving in a new direction. The closures are not a reflection of mere economic cycles.

The United States has had an “over-retailed” market, according to Pamela. The country has significantly more retail space per capita than every other developed country. American retail stores consequently have the lowest sales per square foot.

The rise of ecommerce has fundamentally disrupted the American market. Online sales now account for approximately 30 percent of GAFO sales.

Some online retailers are even moving into physical spaces, like Warby Parker and Bonobos. This development further cuts away at traditional retail stores.

The categories that have taken the biggest hit are media, sporting goods, and hobbies. Over half of sales in these categories are from ecommerce. The video store chain Blockbuster is possibly the most notable retail store in these categories to have gone under because of the transition to ecommerce. People stopped wanting to go to Blockbuster to get their movies when they could get it more cheaply and easily online.

Ecommerce sales also account for 20 percent of sales for apparel and furniture.

The giant of ecommerce, Amazon, dominates digital sales.  Amazon has a market capitalization higher than the next top eight retailers combined, Pamela noted. Last year, Amazon accounted for 43 percent of online sales. Its dominance is only increasing, with 2016 revenues up 26 percent from the year before. Much of this growth is from selling products that they directly own.

Traditional retail is not without hope, Pamela reassured the audience of people almost exclusively involved in the retail sector. Stores like Nordstrom, TJ Maxx, and Marshalls are doing well. Shopping at these places is “like a treasure hunt.” Consumers go through all the racks to find what they need. Such sensory experiences cannot be duplicated online. If current trends continue, TJ Maxx could actually become the top seller of apparel within a few years.

Grocery and dollar stores are also growing. The top five dollar store chains have opened over 7,000 numbers in the past five years.

Different types of retail spaces will be affected differently by ecommerce. Neighborhood centers are probably going to fair the best because they have stores that are less susceptible to having business taken by ecommerce, such as drug stores and restaurants.

Power centers are probably going to have a lot of spaces opening as big box stores close. Between 1,000 and 1,500 big box stores are projected to close soon.

Many of these big box stores will be filled by entertainment stores, though. Dave & Buster’s has recently taken over the space of some recently closed Sears.

A large sector of growth will be what Pamela calls “Surban” places. These places are walkable and have an urban feel, but are in a suburban area. Urban developments are mixed use, with apartments and stores that the people in the apartments use like restaurants and gyms.

Food halls are also increasingly popular. The mammoth World Trade Center in Manhattan even has a food hall now.

Pamala also said that craft breweries are becoming more popular as anchors, with the caveat that their technical equipment requires an industrial-specific space. Many shopping centers do not have the facilities to house a craft brewery, Pamela cautioned. 

Pamela mentioned a few other experience-based stores that herald the future in retail. These include full service movie theaters, escape rooms, Dave & Buster’s, and bowling alleys.

In the question and answer portion of the talk, the audience wanted more of Pamela’s opinion of the effects of ecommerce on retail.

When the subject of malls came up, Pamela opined that people are going to the mall these days for food, entertainment, or to buy a specific thing. Gone are the days of old when people would make a day out of wandering around the mall shopping. Regarding people’s mall going habits today, Pamela surmised, “they’re not making the trip to the mall to buy the thing that they could buy online otherwise.”

The audience was particularly captivated by the question of why this revolution is coming to retail so fast. Pamela did not have a full answer to this difficult question, but she offered that internet sales have gotten much better and more accessible in recent years. These recent improvements in ecommerce have accelerated a trend that was already underway.

Watch Pamela Flora’s presentation at #LetsGetSmart:

Ben Perlmutter is a freelance writer and English teacher in Seoul, South Korea. He can be contacted for inquiries at [email protected]

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The Evolution of Retail: Gatherers Become Hunters

#LetsGetSmart – The Evolution of Retail: Gatherers Become Hunters

 7th June 2017    Ben Perlmutter

Liz HollandPrior to ICSC RECon, David Perlmutter wrote an article, “What’s Wrong with ICSC RECon?,” which challenged ICSC’s leadership to make Wednesday at ICSC better than it has been, and how the #LetsGetSmart17 Speaker Series was a grass roots effort to do just that. Liz Holland, the CEO of Abbell Associates, a real estate investment and management company based in Chicago and 2016-2017 Chairman of the International Council of Shopping Centers (ICSC) accepted the challenge.

During her term as ICSC Chairman, Liz has focused on whether internet sales are really killing brick and mortar stores, as so many media reports lead us to believe. In her talk, she analyzed whether online sales are really killing physical retail to the extent that it is so often presented and how the internet is changing people’s shopping behavior.

Liz began by discussing a talk that she had with representatives from the U.S. Census Bureau. Their meeting was to analyze the data that the Census Bureau has about retail.

The meeting revealed that the Census Bureau’s data does not reveal as much about the real estate as was hoped. The data was more about the economy and information that could benefit federal policy. This is not the information that is most beneficial for the retail industry. Moreover, this information is often misrepresented (unintentionally or not) in a way that makes the retail industry seem to be doing worse than it actually is.

To explain why the data was insufficient, Liz provided the example of the often-cited statistic that 9.2 percent of retail sales are no longer coming from brick and mortar stores. This number may sound relatively large, but when broken down into its component parts, it becomes less intimidating. For example, a tenth of the number accounts for shipping costs, like FedEx and UPS. Mail order accounts for a further third of the statistic—and half of this is for mail order prescription drugs. These numbers, according to Liz, put serious dents in the idea that ecommerce is rapidly replacing traditional retail.

Even Amazon, Liz noted, barely makes a profit from its ecommerce business, and these profits have been shrinking in recent years. In the past couple of years, Amazon has entered the brick and mortar retail business, opening large stores in major cities.

Liz discussed at length the Amazon store in Chicago, her home town. The 6,000 square foot location uses the vast troves of digital marketing data from its website to know which books to stock. With the demographic information about the online book choices of the area, Amazon can stock probably only a quarter of the books stocked in a traditional bookstore. This creates synergy between data and physical retail and could prove to be a powerful force in retail going forward.

While Amazon’s physical locations have a long way to go before matching the company’s digital revenue streams, the brick and mortar stores “create customer loyalty and brand identity,” according to Liz.

Ulta, a chain of beauty stores, is another example of a company that utilizes digital technology at its retail locations to improve the customer experience. If a customer who is a member of the frequent buyer program logs into the store Wi-Fi, they will get a notification telling them which of their previously bought items is on sale.

As these examples demonstrate, the internet is not killing brick and mortar retail as much as it is changing how retail is done.

In the past, said Liz, “there used to be two kinds of shoppers: there were hunters and there were gatherers. Hunters go into a store knowing what they want, buy the product, and leave. Gatherers have a less purposeful shopping mindset, going store to store while looking at a broader selection of products. After lots of looking, gatherers finally make their purchase.

The internet has led to many more people “hunting” rather than “gathering”. People can suss out what they want beforehand online, and then go shopping for the specific product they they know they want.

Consumers are now “channel agnostic”, according to Liz. They care much more about the product that they buy more than where they are buying the product.

This new paradigm of retail requires greater coordination between landlords and retailers than in the past. There needs to be communication about inventory to ensure that the hunters can get the products they seek. Liz said, “technology can go such a long way to supporting shopping in what we all invest in as real estate people.”

Liz cited Homeplus, a supermarket chain in South Korea, as a model example for integration of digital technology in brick and mortar retail. Homeplus plastered subway stations in Seoul, South Korea with pictures of the shelves on their grocery stores with QR codes next to each item. People could scan the QR codes with the Homeplus app on their phone to put items in their digital shopping cart. Then, they could choose a time to pick up their items from a physical store or have the groceries delivered to their home. Liz emphasized that this very novel idea was done completely with very much established technology, meaning something like this is very possible in the United States as well.

After Liz finished her talk, the audience engaged her with various questions about the ICSC, large malls, and using social media to reach millennial users. The audience was particularly interested with Liz’s knowledge of millennials. They discussed how the rise of social media has made everything part of people’s “personal brand”, making people identify more with the things they buy. This further accentuates people’s “hunting” mentality.

In parting, Liz shared some thoughts on how best to reposition retail for the future. As millennials are more likely to shop online then their older counterparts, they crave shopping experiences. So, popular stores for millennials, and growth sectors as millennials become more established consumers, are things like craft breweries, bowling alleys, and movie theaters.

Watch Liz Holland’s talk at #LetsGetSmart

Ben Perlmutter is a freelance writer and English teacher in Seoul, South Korea. He can be contacted for inquiries at [email protected]

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copy-of-are-you-optimistic-about-the-future-of-the-shopping-center-industry

Poll Results: Are You Optimistic About the Future of the Shopping Center Industry?

 30th May 2017    David_Perlmutter
Voting Machine

Are You Optimistic About the Future of the Shopping Center Industry?

Last week we conducted a poll, “Are you optimistic about the future of the shopping center industry?” Respondents voted by dropping their business cards into the voting machine at our booth at ICSC RECon at the Las Vegas Convention Center.  The voting machine was on a coffee table located at the seating area at the front of our booth. It was the subject of much curiosity and a great conversation starter with booth visitors and passers by. Thanks to all of you that stopped by to participate. There were four possible answers, Yes, No, Maybe, and Ask me again next year.

There have been a lot of stories in the press recently about retail. Most of them, it seems, center around store closings or how internet retailers have been disrupting traditional retail. This is not “fake news,” but it does not tell the whole story. If your only exposure to this story were from the media, you might think that the shopping center industry was in a precipitous free fall. However, as a thirty year retail veteran, this is only one of many shocks our industry has undergone in that period. It is unlike the previous ones, but none of them have really resembled their predecessors. Each time, the industry has reemerged, and we have delivered a product that better meets the current needs and wants of our customers.

On the last day of RECon, Wednesday, we hosted the #LetsGetSmart Speaker Series at our booth. Our speakers led us on a deep dive that was a nuanced exploration of the state of the retail industry. Over the next several blog posts, we’ll take a close look at their presentations. If you can’t wait, and want to view their talks first, you can watch them by clicking HERE.

 

 

As for our poll, here are the results:

YES – 74

NO – 8

MAYBE – 12

ASK ME AGAIN NEXT YEAR – 7

With an almost 3 to 1 ratio of Yes votes to all other options combined, RECon participants appear to be optimistic about the future of the industry. Is it that we have blind spot? Do we see the glass as half full, rather than half empty? Or, is it that we don’t have scales on our eyes, we have the knowledge of past disruptions, and we are the engines of change?

Join us on this journey as we explore the contents of the #LetsGetSmart videos over the next couple of weeks.

We’d like to know what you think about the future of the shopping center industry. If you are willing to share your thoughts, fill out the form below:

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