LONDON — The world’s largest mall owners are harnessing digital technology to stem an erosion in their tenant base caused by online retailing, and to keep shoppers coming to their centers.
London-based Hammerson plans to use software that tracks visitors to its malls using the signal from their mobile phones. Australia’s Westfield Group has set up a virtual mall and landlords Simon Property Group of Indianapolis and Paris-based Unibail-Rodamco are encouraging shoppers to add new and more sophisticated smartphone applications.
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“The big beasts of the jungle are showing that they are alive, ready and willing to embrace these trends,” said Joshua Bamfield, director of Newark, England-based Centre for Retail Research. For some town-center shopping streets and smaller retail centers, “it’s another nail in the coffin.”
Online shopping is helping retailers reach their customers with fewer stores, making them pickier about the amount of space they lease and where shops are located.
Mall landlords, seeking to grow rental income and raise property values, are using technology to attract more visitors and track the habits and movements of shoppers to better meet the needs of their increasingly selective tenants.
Global spending online rose more than fourfold to $855 billion in the decade through 2010, trade organization Interactive Media in Retail Group said.
Forrester Research Inc., a technology and market research company, predicts Internet retail sales will increase by at least 10 percent annually through 2015 in Western Europe and the United States, with even faster growth in the Asia-Pacific region.
New mobile technology won’t necessarily give big malls an insurmountable advantage, said Patrik Karrberg, a researcher at the London School of Economics’ Information Systems Innovation Group.
“These applications are pretty simple to create,” he said. Similarly, independent retailers can drive sales by signing up to services like Groupon’s online coupon program.
The rise of Web shopping means that going to a store will become a leisure activity or a quick visit for a last-minute purchase, Gerard Groener, chief executive officer of Corio, said in an interview. That’s pushing landlords to make malls more compelling or closer to transportation hubs, he said.
Corio, the Netherlands-based owner of 45 malls in six countries, plans to create a club membership with smartphone applications to compile a database of consumer spending that it may go on to sell as a service, Groener said in an interview.
Collecting information on customers’ shopping habits helps mall landlords decide where to locate retailers to create mutually beneficial clusters of tenants. That’s prompted Hammerson to test software developed by Path Intelligence to track visitors’ movements around a mall using the signal from their mobile phones.
“There is nothing ‘Big Brother’ about this,” Lawrence Hutchings, Hammerson’s managing director in charge of retail, said in an interview. “It has nothing to do with personal data. It’s just the signal.”
Simon Property, the biggest U.S. shopping-mall owner, last year introduced the shopkick Inc. smartphone application that alerts visitors to promotions available from retailers. The application complements Simon’s mobile shopper club.
The speed of adopting the new technologies depends on the size of online retail and the sophistication of smartphone use in a country.
Westfield in November opened its online virtual mall serving Australia and New Zealand, offering shoppers a price comparison tool to search for goods and services carried by 130 retailers. The service provides a single checkout and links on social network sites for shoppers to give feedback on merchandise and service quality.
“Just traffic is not enough,” Michelle Vanzella, Westfield’s director for business development, said in an interview. “It has to end up with sales.”
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