Can Data Save the Mall?

'Smart Malls' Turn to Data Troves to Enhance Shopping Experience

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In the new Fashion District at Westfield Garden State Plaza in Paramus, N.J., stand a half dozen seven-foot-tall touchscreens. The larger-than-life displays have games, movie trailers, retailer catalogs, interactive directories and other applications. The digital storefronts are among the latest efforts from Westfield Labs, an innovative digital arm of the high-end mall operator, aimed at drawing more traffic to malls and keeping them there.

The digital storefronts at the Westfield Garden State Plaza display games, movie trailers, retail catalogs, interactive directories and other applications.
The digital storefronts at the Westfield Garden State Plaza display games, movie trailers, retail catalogs, interactive directories and other applications.

The misfortune of the mall has been well documented -- according to a Green Street Advisors report, since 2010, more than two dozen enclosed shopping malls have been closed and another 60 are ready to follow. But top-quality malls, like many of those operated by Simon and General Growth Properties, are doing well -- both reported higher sales in 2014 -- and are hoping to continue that trajectory with some high-tech help.

Developers like Westfield, one of the world's largest mall operators with 435 million customer visits last year, are exploring services that merge the digital and physical worlds to further engage shoppers. These "smart malls" feature digital storefronts, free WiFi, beacons and electronic parking assistance. "It's important for us to stay at the pace of cultural and technological changes," said Beth Ann Kaminkow, exec VP-CMO at Westfield, which is testing not only beacons and WiFi, but Bluetooth, LG and 4G technology, as well as platforms like Snapchat and digital displays.

In doing so, mall owners are gaining access to troves of data that offer insights into mall-goer habits. And they are starting to tap into that data to enhance their advertising, loyalty and traffic-monitoring efforts.

Free WiFi, for example, helps mall operators monitor traffic. The networks show where shoppers are from, how frequently they visit, how long they stay and offer a means of communicating through basic information collected upon log-in, like a ZIP code or email address. Search histories also provide a snapshot of shopper habits.

At Palisades Center in West Nyack, N.Y., which is owned by Pyramid Management Group, the data helps attract retailers. The shopping center builds broad profiles of its shoppers, which it shares with potential tenants. So, health-conscious shoppers may lure a new health-food restaurant to the food court, or moviegoers may inspire a cinema to open.

"It's always in the back-end of the conversation," said Natalie Tronolone, marketing director at Palisades Center. "It's concrete data that shows what they're interested in."

But there are limitations. Owners cannot distinguish between visitors and mall employees who use the network without shopping. Operators are also wary of looking beyond traffic flow and other broad-level data unless opt-in terms are in place. "Privacy is of utmost importance," said Ms. Kaminkow. "We're getting the data ... but we're still in the early days of being able to get true value from that."

Third-parties like StepsAway are bridging the gap by helping retailers act on the information networks collect. The web-based app, which is currently deployed at Taubman and Starwood Retail Partners locations, works with mall owners and national retailers like Express and Sephora to offer deals by tapping into the WiFi network. The promotions appear when users open their browsers and are organized by categories such as women's, men's and kids or by store.

"What we've become here is the digital handout for the mall," said Allan Haims, president-CEO of StepsAway. "We have this WiFi. How do we actually use it to help your business and incentivize shoppers to buy?"

With StepsAway, retailers can offer custom promotions, like flash sales or mall-specific deals, and shoppers can easily find what they came for. The endgame is to increase sales per square foot, which means mall operators can lease their spaces for more money.

Similarly, Simon shoppers can opt-in to receive personalized offers and other information from retailers and mall apps through Bluetooth-enabled iBeacon technology. It uses Mobiquity's Mobi-Beacon network to reach visitors on their mobile phones when they're in the mall.

Westfield is exploring ways to engage consumers with its app, which launch last summer, before and after they shop.
Westfield is exploring ways to engage consumers with its app, which launch last summer, before and after they shop.

Mall apps also include other tools like interactive maps that give step-by-step directions designed to encourage shoppers to download the apps.

The Westfield app, launched in August 2014, offers a more personalized experience each time it's used and is most popular with frequent shoppers, Ms. Kaminkow said.

Next, the company aims to engage consumers with the app before and after they shop. One way would be allowing customers to search for products. For example, a customer could search for perfume, see that Macy's, Sephora and some smaller boutiques sell it, and learn where those stores are located. Then she could receive a deal or be alerted to a beauty event at the mall. After the visit, Westfield could follow up and invite her to share information for more personalized offers.

Pyramid's app, which also launched last year, lets shoppers set GPS, photo, voice and text reminders of where they parked, among other services.

But data gathering is only one part of the equation -- one of the biggest challenges and opportunities lays in the ability of mall owners and retailers to seamlessly share that data.

Imagine knowing when a guest arrives who purchased something for in-store pickup. Operators can guide them to the nearest parking spot and alert the retailer to prepare their item or offer a promotion. If the visitor is part of a mall loyalty program, they could also be greeted by a personal shopper.

Some of that technology is already in place. Some malls have features like Park Assist -- available at select Westfield locations -- that guide visitors with overhead lights that indicate available parking spaces. Digital signage displays the number of open spots.

But mall operators are just beginning to negotiate with retailers on sharing data. When that gateway is opened, more opportunities will arise to engage with retailers and shoppers at a deeper level. Possibilities include live retailer feeds of in-store merchandise, in-store virtual reality and robotics that help with retailer fulfillment, said Ms. Kaminkow.

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