30 Sep How malls become ‘Smart Malls’: using technology to bridge the gap between online and offline to drive conversion from the connected shopper.
By Jasper de Vreugt, CEO – Mall-Connect
With Chinese between 16-24 years old now spending more time consuming web TV and doing online networking than watching TV, we can be sure that the future of advertising – and shopping – is online. E-Commerce players have been reaping the benefits of this ongoing trend for years, showing skyrocketing revenue growth. How can shopping centers bridge the gap between online and offline? And what challenges do they face when they connect to consumers directly?
E-Commerce players have become so successful for one simple reason: they know their customer, and they know them very well. Online stores need to know their customer’s name, address and email account in order to ship the goods or provide a download to a digital product. But it does not stop there. By collecting information about past purchasing behavior, online stores are able to predict almost exactly what their clients’ next purchase will be. As a result, online stores are able to send highly targeted communications to consumers at the right time, leading to great email-to-purchase conversion rates.
Malls, on the contrary, have focused on tenants as their customer, not the consumer. Even though mall owners know exactly how many consumers live within their catchment area, and what demographic profile the mall caters to, they cannot reach these consumers with one-to-one communications. Why are malls so bad at communicating to consumers?
‘Mall marketing is undergoing a rapid change. In the future, malls will become more like e-commerce players. Malls will become ‘Smart Malls’
Smart malls are present in the process of online orientation. Roughly half of all physical purchases are influenced by online orientation. Therefore, smart malls are present in online search, so they are found whenever consumers are looking for a specific product or brand.
Secondly, smart malls build up a database of shoppers, and engage shoppers with personalized communications. This is where malls are different from e-commerce players: while online stores can reach out to anyone in the world, malls are bound to their catchment area. In order to make a difference on their footfall statistics, malls should aim to get more than 20% of consumers within their catchment area into their shopper database.
Smart malls are all about data
By collecting data from each and every consumer interaction malls are able to collect data about shopper demographics, shopping interest and actual shopper behavior. Imagine the following shopping journey:
‘Anna has a coffee meeting with her friend Bree. During the same visit she wants to visit Baby Gap to pick up a funny T-Shirt she saw in a local ad. She adds Starbucks and Baby Gap to her shortlist.
She also wants to know what parking to use, so she opens the mall mobile app and searches for ‘Starbucks’. The app points her to Main Parking, level 3. When she arrives, she gets a welcome notification on her app ‘Welcome to Smart Mall, slide this message to start indoor navigation to Starbucks’. Within minutes, the app guides her to Starbucks.
After 30 minutes she gets a reminder about the special offer at Baby Gap, including a member-only coupon. As she is 50 loyalty points short to redeem the coupon, she uses the Smart Mall mobile app to send Bree an invite to join the loyalty program as well. By inviting Bree to the program, Anna gets 100 points.
Anna walks to Baby Gap, and – using the mobile app – redeems her member-only offer. While she is a bit in a hurry to get back home, she forgot where she has parked her car. She opens the app and starts ‘find my car’. Within minutes, Anna is guided to the parking where she can pay for parking using the app, avoiding the queue at the payment terminal.
Happy with her purchase she leaves the mall and drives home.’
What data did we derive from this customer journey? Well, Anna logged in through Facebook connect, so we’ll know she is female, 28 years old and lives in Manila. We know she likes Starbucks and Baby Gap. It is likely that she has at least one child. And she arrived by car, so likely she owns a car. Anna is an active loyalty member as she invites people and redeems coupons. We also know when she last visited the mall, so we can re-invite her if she has not been to the mall for some time.
We have now logged the following from her visit:
|Female||Starbucks||Arrived in car parking|
|28 years old||Baby Gap||Time stamp of arrival|
|Car owner||Fashion – Children||Opened coupon|
|Loyalty program member||Invited new loyalty member|
|Visited Baby Gap|
|Used in-app payment for car parking|
|Time stamp of departure|
Smart Malls convert online engagement to offline purchases
Malls have an important advantage over online stores as they can offer a sensory experience: there is sight, sound, motion and smell. Smart malls combine this sensory experience with highly targeted in-mall communications to shoppers. Based on a wealth of data collected, smart malls can send the right communication to the right shoppers at the right time.
There are several direct channels to reach shoppers when they are at home or in the mall. Depending on the location of the shopper, smart malls can reach consumers using email, standard in-app push notifications or iBeacon push notifications.
By targeting communication well, and keeping the number of messages to a minimum, the mall can help its tenants to drive more traffic to their stores. Doing so, the smart mall offers more than just leasable area to its tenants. In fact, it offers tenants a large database of potential shoppers that they can reach out to with attractive offers and member-only privileges.
Smart Malls continuously optimize their marketing efforts based on data
Any mall, or portfolio of malls, has a large number of data points that can provide data to optimize marketing efforts. However, not many malls are capable of combining data from all data points, for example comparing footfall data with promotional activities, turnover data or simply the weather and traffic situation. All of these data points have a large influence on footfall, dwell time and spending, and it is essential to understand the relationship between the data in order to extract patterns and make recommendations for marketing activities. Smart malls connect all data points to a single reporting platform, so they are always up to date on the latest marketing performance. And by having a single reporting dashboard, they will save up valuable time for actual marketing activities.
Who benefits from the Smart Mall?
- Anna gets peace of mind. She can find stores – and her car – using wayfinding, and she enjoys member-only promotions from the stores she likes most.
- Tenants can reach out to a large database of shoppers, promoting their products to a targeted audience, driving store traffic.
- The mall manager benefits from having actionable insights in the actual marketing performance of the mall.
- Mall owners benefit from increased store turnover and cross mall insights, leading to higher turnover rent income.
 Source: GlobalWebIndex Q1-2 2015