With online sales set to account for 25% of non-food retail before 2020* the role of the store is changing, but so is the role of the venue and the experience it must offer.
The topic of digital strategy has been a constant theme at the autumn thought leadership events and at many of my recent client meetings. The conversation and (sometimes heated debate) has focused on what is the role of the landlord versus the retailer and which destinations currently have the best digital strategy.
So I have compiled 10 points that destinations should consider when developing their digital strategy.
1. Are you clear how your digital strategy fits into your existing business
Our industry is finally speeding up the pace in embracing technology; “Labs” is a zeitgeist phrase for landlords, we have apps offering geo-location, advanced loyalty systems both in app and physically, affiliate website models, customer mapping and better interrogation of big data analytics. The danger is that without a clear digital strategy, initiatives lack cohesion, or in the worst case prove counter-productive to the core bricks and mortar business.
In the past the role of a landlord was to get customers to a physical threshold – today I believe it now includes the digital threshold but there are a myriad of options where a company could invest its capital. Boards need to be clear about where the digital strategy fits into their business model, the level of investment required and what expected returns they will achieve. They must define whether the investment in technology is to create new revenue streams, a strategy to secure higher rents over time or frankly just the cost of doing business today to compete against pure-play retailers?
2. Are you clear how your business model needs to change and how technology will play a role?
The industry needs to alter its business model in order to serve tenants and consumers whose needs are different than they were in the past. With the physical store set to take less money, but play a bigger role in sales for a catchment, new approaches to leases, turnover, lease flexibility are some of the seismic shifts required. (See my next blog: Landlords are now media owners out Nov 26th).
3. Technology should enable more experimentation – Are you breeding a culture to harness the opportunity it provides?
Culturally this is a big challenge for our sector. Technology means we can try 4 versions, get data, adapt and go again, this is exactly how tech start-ups operate – get to a minimum viable product and test it quickly (It requires a different mindset to deciding where entrances or escalators go, it definitely does not need 5 layers of hierarchy, a 10 person steering group and 13 weeks securing board approval). It also means we can Fail Fast – when was the last time you approached an initiative with that a test-mindset and celebrated a good fail where you learned something invaluable?
4. Are you developing your C-Level execs to think like Business Angels?
The future success (or survival) of your business may well rely on being more entrepreneurial, we all ignore this at our peril, but how many of us can say that we really create an entrepreneurial environment or actually have the skills to create one?
Boards need to build this into senior team skill development programs at pace and establish financial support, however small to allow innovation to come from anywhere in the organisation.
5. Data is a new asset class – How do you currently value it?
Many landlords are grappling with exactly what the final value of data will be and how to use it most effectively, but I believe in 2 years when you sell an asset, the data will have a tangible value in the sale price.
The data will need to be relevant, and rich, (and not just competition entries). Organisations will need to maintain and grow it, and to do that they will need to remember the following point……..
6. Data is NOT the new oil without emotional engagement
Ever since retail began, the idea of getting to know your best customers has rung true; Technology allows you to identify, understand and personalise communications, building strong loyalty with your best customers, but without brand engagement it is just a list of tailored offers (and some of our industry fail to even tailor offers currently)
7. Data analysts may well be the next Marketing Rockstars
A while ago Digital marketing managers were key new hires, people to help navigate a changing digital landscape. Today in the leading landlords, more and more of their marketing team is made up of Data Analysts.
Ask yourselves how much data do you currently collect and how many people do you actually have to make sense of it? In my opinion, it is the
Analysts role to help make sense of the data, use insight to shape business strategy then test it to be sure. In addition, allowing analysts time to uncover insight they weren’t originally looking for is where the pure gold lies!
8. Is Wi-Fi the foundation or the pinnacle of your digital strategy?As a destination, offering great Wi-Fi where you can watch TV or price compare is not the end game; True it may be good for entertaining blokes dragged out for a Saturday morning but it should be the platform (alongside 4G) to build an engaging, relevant personalised experience.
9. Are you using Technology to take the friction out of the shopping experience?The consumer should be at the heart of everything we do, and true omni-channel gives the customer what they want, where they want and when they want it.
We must relentlessly look for what is important to them and, where relevant, how technology can help deliver it. (Delivering what the really customer wants will often require more of point 3!)
10. Landlords and retailers both need to collaborate moreLike it or not, there is no such thing as a Single Customer View, especially in shopping malls, but retailers and landlords can combine forces to create a powerful view of their shoppers behavior and create a truly omni-channel experience; An online retailer knows where a customer visited, how long they stayed, the conversion rate, where they left from and what brought them there in the first place – all this information is available to retailers and landlords but more collaboration is needed to unlock it into a powerful view of the customer.
With a clear digital marketing strategy then the rationale for a either a database sending better personalised content, a new loyalty program or better customer tracking (OK, and yes, even investing in improved Wi-Fi) become clear, with the investment easier to justify, the returns easier to measure and the strategy easier to explain.
*(Conlumino report 2015)