Setting the scene - why make these changes?:
With Covid-19 cases continuing to grow in RSA, India, the USA and elsewhere, the upcoming months present a major challenge for business-continuity and success, especially for retailers and mall owners, as both sectors have suffered significant losses due to the pandemic.
Retailer and mall owner losses have been substantial and manifold: loss of sales and rental revenues, unsold merchandise, forced-write-downs and special-offers, customers under the worst duress ever. Besides drying revenues, retail companies in the country are also scrambling to cope with an accelerated evolving customer requirements and the inevitable cash-crunch. Against this background, retailers and mall owners area adopting advanced technology to optimize their operations, inventory, rebuild customer confidence and improve sales. Starting from the way they operate their business, to the way they acquire customers, tech-based solutions will help them adapt to the new challenges while safeguarding both their employees, contractors and customers.
To-date, many sprigs of improvement to the business environment are evident, as are the many technology-related responses that are being applied to ensure that retail spaces and malls can be accessed and used, notwithstanding the ravages of Covid-19.
In this short article we explore the specific areas where technology is enabling business continuity; we also highlight the unintended consequences of an all-too-rapid embracing of technology.
Technology as the enabler:
In a post-COVID world, contactless entry systems will be a standard practice. Equipped with temperature screening with facial and mask detection features, these systems will enable retailers and mall owners to protect their staff, minimize human intervention and assure their customers about the in-store and in-mall safety protocols. It is expected that customers will remain sceptical about visiting physical stores and malls for the foreseeable future, and only retail outlets and malls with a contactless entry mechanism in place will manage to regain their confidence.
We are already seeing contactless systems being applied in washrooms, elevators and in F&B public areas.
Are we seeing (as inspired in Star Trek) contactless identification and payment systems adopting insertable devices, linking identity and payment capability to a device that has been inserted into a finger, under a fingerprint?
Physical density measurement is critical in slowing an epidemic and if malls and retailers can control the access and egress of people through their spaces, the epidemic has a good chance of being slowed and stopped. Malls and Retailers have begun to retool their traditional footfall technology systems to count and to manage people-density within their premises creating safer environments and encouraging customer-confidence.
The rise of the Virtual Store (and Walk-throughs)
With physical distancing in place for months to come, virtual reality (VR) and augmented reality (AR) technologies will allow mall and retail businesses to provide their customers with the experience of shopping without them (actually) being present. For example, virtual store walkthrough-apps let buyers enjoy a no-contact, hassle free shopping experience. Similarly, virtual-trial-rooms allow customers to try out apparels and accessories virtually.
A new form of service - AI Customer Engagement
Most business sectors have reaped the benefits of incorporating AI into their operations, and mall-management and retailing is also benefiting from this technology, albeit slowly. With AI-based chatbots, for example, businesses can cater to their customers' queries "24×7". These chatbots are programmed to answer repetitive queries, resolve simple issues and also make product recommendations based on the customer’s previous purchasing patterns. The instantaneous responses of AI bots make them a perfect aid for mall and retail companies during this pandemic.
Service Kiosks - Self-Checkout Points
While self-service kiosks do not qualify as a novel solution, they are playing a crucial role in the retail environment to minimize human interactions. Automated self-service (and easy to clean) kiosks offer customers detailed information regarding the mall’s services and retailer’s product catalogue, promotional announcements (discounts and special offers), and the payments and checkout procedure. Deployment of this technology further enables optimization of the operational space, reducing the number of people on the floor at any given time, and overall, enhancing the customer experience.
Measure retail sales, in real-time
How can something as important as retail sales management not be monitored on a daily basis!? This is alas how most malls are managed, where there is a void of real-time sales data being studied and used by mall owners. Imagine knowing how successful an event has been or, how well retailers are performing. Imagine NOT (being able to do!)
Unsurprisingly, there is a raft of point-of-sales-management systems available to apply to malls and their retailers. Its been proved globally that the effort to implement these systems is well worth it, yielding data that supports decision-making, including inter alia trading density, conversion, trajectory of trade and rental-hot-spot-determination.
The rise and rise of Supply Chain Logistics and Mall Re-Purposing
Retailers are now spending a lot more on their online infrastructure in order to give them stronger foundations upon which to roll out a 'just-in-time-of-ordering' omni-channel experience for the customer. The lockdowns everywhere have migrated a lot of people to try online ordering for the first time and most of these people are very happy with what they received; the service was there when they needed it most, resulting in substantial growth in the eCommerce space. This trend slated to continue. The logistics sector will continue to move closer into our urban environments too, to be closer to their urban customers, offering mall owners some very interesting re-purposing options within their existing malls: storage spaces, ecommerce fulfilment and (smaller and more localised) distribution centres.
Businesses and banks have aggressively been promoting the use of non-cash digital methods of payment in the wake of Covid-19. Most online retail platforms have already removed their (older) COD (cash-on-delivery) option to facilitate a contact-free delivery experience. More and more, we see offline retailers asking their customers to use digital payments systems exclusively On the surface, this not only limits physical contact but will also enable a faster checkout procedure.
A cautionary tale
As when we are hiking, "moving as fast as the slowest", there is an unintended consequence lurking in the underbrush. Societies cannot afford to alienate, ignore nor exclude members and at the speed technology is moving, there is a distinct risk that the poor, aged, disabled and the very young may unintentionally be excluded. Sweden’s recent realisation that the poor, aged and the very young may have been detached from their planned movement towards 'cashless' has meant a substantial rethink in respect to how these sometimes marginalised groups can be included into the inevitable wave of innovation.
It seems that the Covid-19 response has accelerated a technological response years in the making, to just a few months. Apart from the technologies mentioned above, there are several other areas where technology is being deployed to ensure the seamless operations of malls and retailers. As long as previously marginalised groups are not excluded, and despite the recovery from Covid-19 taking some time it is clear that malls and retailers will recover and regain their lost customers.
And, The convergence of two worlds: "the tomorrow-world of applied PropTech."
Technologic advancement leads the way to new business prospects within the real estate industry. Mobile phones represent only one component, while a diverse array of technology tools and solutions capable of disrupting the real estate market altogether are a click away.
The PropTech economy is the confluence of two great bastions of investment and enterprise: technology and the real estate industries. It touches everything in society, from how we work, live, and play to our investment decisions. Even before the onset of the Covid19 crisis, real estate practitioners were enthusiastically engaging with and applying the broader principles of technology to benefit their built environment assets.
It is noteworthy of mention that when properties and portfolios have a high degree of PropTech exposure, greater than their peers:
- They achieve better valuations
- They enjoy extended lifespans
- They survive longer lifecycles, remaining relevant to their tenants, users and the broader community for longer