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Recession Coming? Here's How Mall Operators Can Prepare

October 23, 2019

Three out of four economists predict a recession will hit the U.S. economy by the end of 2021, according to the National Association for Business Economists, and mall operators know that a recession threatens both current and future business. A national brand that had planned to open a dozen stores in California may decide to go with only two. A few current tenants may decide it’s financially better to terminate their leases early, and pay the penalties, rather than keep operating in a downturn. That can even affect other tenants who have co-tenancy clauses in their leases—if a specific store closes, they can opt out as well.

One Solution: Offer an Unfair Advantage

How do you stay on the list of new openings, and stay off the list of early closings? The best way is to have an unfair advantage—something other operators at other locations can’t offer. Omnee lets operators offer hard data—collected in real time across the entire venue—on shopper patterns and trends. Instead of claiming numbers, you can quote them from dashboards and reports. 

  • How many people pass by the location, and when? 
  • What are their travel patterns throughout the mall like? 
  • Which stores do they cross-shop at? 
  • How much time do they spend onsite? 
  • How many are families with children versus lone shoppers?

Intel like this isn’t just good for making informed decisions. It gives the people who represent your tenants downside protection for their own careers. With hard numbers in hand, they can justify decisions as data-driven and can quote metrics and include numbers in their own internal proposals and evaluations. 

The drive to make real-world retail more data-driven was what led us to found Omnee in the first place. Our venue-wide system not only puts real data in your hands, we also have industry expertise working with the leading operators on their newest location openings and upgrades. Omnee’s team know how best to use our data to court prospective tenants, turn around struggling stores with proven strategies, and learn to use real data to make more informed, less risky decisions going forward.

Court Digitally Native Brands

Iconic anchor tenants have been going bust one by one for years, but a new crop of retailers are coming in: Online brands like Warby Parker, Peloton and Casper are aggressively opening brick-and-mortar stores and pop-ups for two reasons: First, these companies are still in their growth phase, with the promise of bigger and better days still ahead for them. Yet at the same time, they’ve seen their online-only retail models shift from explosive early growth to slowing growth. Today, it might cost an online brand $200 to acquire each new customer. If the customer only spends $150 in the coming years, it makes sense to look elsewhere for a more cost-effective, more profitable way to bring in new customers. Shopping centers are proven to work, and as you’ve learned already, online retailers are the most data-driven of brands.

Brands Now Travel in Packs

Today’s shopping center dynamics have evolved from a few giant anchor tenants bringing foot traffic to smaller stores, to one where groups of smaller stores seek locations populated by groups of brands they’ve learned will drive cross-shoppers through their own doors. Shoppers themselves are aware of the pattern: If there’s a Peet’s, they can guess what other franchises are likely to be a few doors down, and which are probably at another mall with a Dunkin’ instead. For brands forced to limit their new store openings, sticking with the pack is another form of downside protection. 

Where does Omnee fit in? By giving you an advantage to offer to online brands and other data-driven tenants, we give you an early-mover advantage to bring in key members of these brand tribes, and grow expertise in data-driven operations at a time when brands are looking for signs of economic predictability in choosing locations. 

Be an Early Adopter of the New Retail

Nobody likes a recession, but a slowdown in shopping can force both brands and operators to focus on what really works, and make the changes necessary to keep up with the changed (and still changing) nature of retail. You see that happening already: What worked so well for Sears for decades makes no sense to a new generation of consumers. They want a different experience and a different way of shopping and buying. 

We specialize in measuring behavior and results in the real world, just as online retailers have been doing for years. Omnee brings the online world’s unfair advantage to the real world, so mall operators and their tenants can turn an unavoidable recession from an end to a new beginning. Reach out to learn more.

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