CREJ - Retail Properties Quarterly - February 2017
The window to bury your head in the sand has now closed. If technology is not moving toward the forefront of your shopping center operations arsenal, you aren’t maximizing netoperating income as efficiently as you could, and investors and owners will soon take note. The word “technology” and its comrades “internet” and “smartphone” have oft struck fear into the hearts of shopping center owners. Shopping center industry disruptors – online shopping, show rooming and Amazon – have been written about, panel discussed and highlighted extensively. Although consumers have shown they absolutely want value, convenience and efficiency, they continue to prove experience is vital. Successful shopping centers provide all of these elements. Now is the time to leverage technology along with all it has to offer the shopping center developer, owner and property manager. Forward-thinkers always have led the shopping center industry, and the present time is no exception. While many have focused on developing a defensive strategy, retail property owners can benefit from a wealth of offense-driven tools aimed at improving the performance of shopping centers. • More efficient operations. Operational teams can benefit from the time and cost savings of automation programs. For example, irrigation systems can send text alerts when a leak occurs and usage is exceeding preset thresholds. Site lighting timers can be overridden remotely from a cell phone to facilitate daylight work, avoiding the need to travel on site and manually override. Keypad entry doors can wirelessly generate one-time-use codes to avoid key check out for roof access. Roof inspection vendors may not need access, however, as inspections can be completed by roofing professionals manning drones that generate detailed, high-resolution imagery for historical documentation, along with infrared mapping that can identify moisture problems before major issues occur. Shopping center portfolios can be seamlessly tracked with software overlay technology, like Datex Property Solutions, which we developed to mesh data from accounting programs, property management and lease administration software. A dashboard view can show how a Subway operator in one location compares to 15 others in the portfolio and how its occupancy costs compare to other sandwich quick-service restaurants. Technology can be leveraged to capture data formerly compiled manually in piecemeal spreadsheets and can make that data available within minutes on your smartphone, on-the-fly, before an important meeting. The interface technology dashboards have access to the full spectrum of operational data, including viewable documents. It can aggregate the data within portfolios to generate key performance index factors encompassing all operational segments with a click, rather than with hours spent running multiple reports to compile a new spreadsheet when an analysis is needed. Projects, which typically are created off line by multiple users for essential tasks like property management reports and annual operating budget drafts, are centralized with workflow automated to communicate when certain tasks have been completed. This avoids the need to email drafts back and forth or use a collaboration tool outside of the accounting and property management software. • Improved marketing results. While indoor centers have long benefitted from people counters at doorways, outdoor centers have struggled to accurately capture foot traffic data in a cost-effective manner. Marketing directors want to accurately show the results of their hard work, but are frequently left to estimate attendance or pull information from tenants. With the penetration of smartphones reaching an all-time high and the availability of proprietary Wi-Fi analytics programs, the marketing director can watch counts tick up live during major events direct from an iPhone. The director can compare the numbers to the previous year’s event and the last 10 Saturdays and see what percentage of visitors is new to the center. This technology not only enables wiser marketing decisions, but also helps shopping centers elevate experiences to further distance themselves from online counterparts. Although they may have a higher upfront cost and require more maintenance, a Wi-Fi-enabled digital directory offers an opportunity to merchants and guests that goes beyond static, printed versions. Directories can be updated with no lag time. Video packages from sponsors can be integrated into displays, and rotating between merchant content becomes as easy as the click of a button, rather than the struggle of how to be equitable with limited, stationary opportunities. • Leverage technology’s worth. Technology doesn’t just make things easier; the latest tools make centers and services more valuable. The opportunities to increase revenue include the ability to provide hard data to those interested in leasing space and create low-cost or no-cost opportunities for merchants to promote their business and increase sales. Property managers who offer these tools, in conjunction with their experience, communication and attention, offer a distinct advantage to property owners and occupants. Although new tools often come with a high upfront cost and the occasional kink, the long-term cost savings and efficiencies are demonstrable. • Don’t forget the basics. Technology can make decisions more informed, workflow more efficient and outcomes clearer. It cannot, however, make things right with a customer, develop an employee or form a relationship. Outfitting a brand-new skier with Olympic-grade skis won’t make her Picabo Street. However, property owners and managers who have a solid foundation of excellence who employ technology to accelerate superior performance have a clear advantage. As the shopping center industry continues to change, technology is not the foe, but rather an ally in enabling survival during a rapid evolution.