Despite the meteoric rise of e-commerce, physical retail still accounts for the vast majority of purchases —14% e-commerce vs. 86% physical retail —which means six of every seven retail dollars are still spent in a store. Shopper journeys often combine online research with real-world brand interactions before deciding to buy. This omnichannel approach has led forward-thinking retailers to adapt and reimagine their customer relationships—to create a holistic experience both online and off.
By now, we know that those traditional brick-and-mortar retail brands which haven’t been able to adapt to this new paradigm have been hit hard. Department stores as big as Macy's and Sears, and brands including Abercrombie & Fitch, have experienced tough declines in revenues and customer loyalty as a result of not moving fast enough. This in turn has had a drastic effect on shopping malls, where many of these brands have been anchor tenants.
Whenever an anchor store closes, mall operators must quickly find a creative new way to increase their Net Operating Income (NOI.) There are typically two ways to increase NOI: monetize existing traffic, or bring in new traffic. Both techniques rely on having access to accurate, current data.
Monetizing Existing Traffic
To effectively monetize existing traffic, the leasing team needs to understand in-mall shopper traffic flow and storefront capture rate, so they can optimize and support their existing tenants. Cross-shopping data answers tenants’ core questions: Do I get the right kind of traffic to my storefront? What percentage of traffic comes from the nearest entrance? Do my customers also visit similar stores in the mall?
Similarly, the marketing team needs to understand how in-mall shoppers engage with various marketing events and activities. Are these tactics working? Do they move folks through the mall to discover new brands and offerings?
In our conversations with mall operators and owners, it became clear that essential data was often completely lacking—a black hole in the funnel, if you will, or patchy at best. We saw an opportunity to capture and analyze customer journey information, and then provide those insights ‘as a service’. Today, we are running a number of pilots with leasing teams at top REITS who are excited to understand what Omnee’s cross-shop and storefront capture data tell them. More important, the teams share those insights with their brand tenants. The net effect is that operators and owners can quickly gauge and support tenant health, drive higher occupancy, and boost NOI.
Marketing teams, with access to the same information, can understand the flow of traffic and which brands complement each other—thanks to cross-shopping insights-- so they can enhance the in-mall shopper journey and prove marketing ROI.
Monetizing New Traffic
Introducing a new tenant to the mall is always a critical decision. The leasing team needs to understand the right tenant mix to ensure success—a mix that promotes cross-shop draws more visitors for the experience, as well as adding to per-visitor sales. Again, Omnee’s data proves invaluable. Revealing direction of travel and cross-shop patterns allows operators to plan and forecast tenant success, which in turn drives occupancy and builds revenue.
We’re seeing an increase in experiential marketing with live events and attractions. The marketing team needs to understand how many new shoppers these events drive to the mall, and which retailers benefit. Again, Omnee’s data proves incredibly insightful in helping to understand direction of traffic and storefront capture data. Our tools also visualize new shopper uplift to exact locations in the mall, again helping to prove marketing ROI.
If your current analytics solution is not able to identify existing versus new traffic, analyze cross shopping behavior, or map out the customer journey flow in your mall - let’s discuss how Omnee can help.