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Retail Real Estate’s Compounding Digital Debt

Category
Mar 5, 2022
Date
Blog

Retail Real Estate’s Compounding Digital Debt

By Peter Tonstad, CEO Placewise


Though they are not alone, the Retail Real Estate industry is facing an ever increasing amount of what I  call “digital debt”. The definition of digital debt is the investment needed to bridge the gap between the current digital experience and the ideal digital experience.  Just like fiscal debt the more we “kick the can down the road” the greater the compounding effect, and the larger the investment necessary to close the gap will become. 


Just think about your favorite airline, or your bank. How many gaps can you identify in the digital user journey? Why are they not recognizing your client status in all touch points when they have all the information needed from your profile and behavioral data? There are typically three reasons for these gaps.

 
1)The digital solutions are fragmented, often single point, solutions with little or no integration resulting in multiple stand-alone databases, dashboards, and reports, significantly limiting the potential value of the data and ensuring an inconsistent customer experience.


2) Inadequate or spotty integrations due to technology limitations and/or cost effectiveness of integration of legacy solutions. 


3) Lack of neutrality -The people who are responsible for the digital user journey are also evaluating the user experience, rather than completely relying on the data and customer feedback. 


If there is a silver lining for our industry’s generally accepted reputation as slow tech adopters, it is that the lack of technology makes the path to reducing our “digital debt” more straightforward.   Fewer legacy solutions, mean less energy and investment needed for upgrades or integrations to outdated tech, and an obvious opportunity to get the digital customer journey right from the start. 


Reducing “digital debt” can be the single most effective tool for increasing customer and retail tenant satisfaction and asset value.  To get started, consider your goals and platform requirements, get input from your team and ask lots of questions.

Define Value -Define the value proposition of your digital offering for shoppers and tenants. Test and get feedback before implementing.

Flexibility - Choose a platform that is open and capable of hosting all your different types of data in one database, social media to parking, customer brand preferences to center visitation - All in one place.


Scalability -Make sure scalability is available from day one. How will things work when your data is tens, hundreds or thousands of times more than it is today?

Usability - Choose a platform (CDP, CRM, operational, e-commerce or other) that has a well-documented and an "open" API so that you can work with third parties and partners painlessly, keeping all of your data in one place, without expensive custom integrations.


Monitor & Optimize -Survey your shoppers and tenants on an ongoing basis regarding the quality and results of your digital offering. A digital solution is per definition never complete, and maintaining a great experience is a process of continuous improvement.


Invest & Upgrade - Consumers will demand the digital user journey to continuously evolve. What was good enough two years ago, will not match their latest expectations or demands. Make sure you allocate budget to continuously upgrade and expand your digital offering.


Avoid DIY  - Work with an external partner and platform. This may sound self-serving and an obvious recommendation coming from me, but the reality is I have never seen an industry “in-house” tech project last more than a couple of years. They always take more time and become more expensive than expected, and in the meanwhile the initial plan has become obsolete. There is a reason why platform companies employ tens or hundreds of tech developers. 



Have your goals and platform sorted?  Great, now look objectively at the digital user experience from your customers perspective. 


Exclusive content
If the content you’re serving your shoppers is not regarded to be unique your digital program will never scale. Offers and benefits need to be available exclusively to consumers who opt in.


Optimized onboarding

If the onboarding process demands one or two more clicks than absolutely necessary -  the consumer is gone. Digital patience is generally very low.  

Consents

Make sure every aspect of your digital user experience is GDPR compliant. Make sure “asking” for consents is built into your consumer onboarding experience. If you don't get consents for data driven marketing, the data becomes more or less useless. 


Be Channel Agnostic

Don`t have favorite digital channels. Be where the shoppers are. If they like TikTok, do things on TikTok. In digital it is always the combination of many small contributors that add up to bigger results.


Keep It Fresh

A digital program always needs to be interesting and up to date. It's an ongoing thing not something you work on once a month or even once a week. Somebody needs to be proactive all day every day.


Set Targets

A digital program should never be launched without having very specific targets. Typical targets that matter are the number of new members, share of active users, and number of retailer redemptions from the database for example. To be sustainable over time the digital program must deliver monetary value to shoppers, tenants and the shopping centre. 


In a recent survey we did among consumers in the US only 15 % said the shopping centre experience is better now than 5 years ago, 49 % said it's worse. At the same time 87 % said they are interested in an e-commerce offering from their shopping centre. Generally the survey identified a gap between shoppers' expectations towards the digital offering from shopping centres compared to what they are offered. There are proven solutions in the market to bridge all these gaps. It is all about actually getting new interesting experiences out to the shoppers sooner rather than later, and creating future proof shopping centres as the ultimate goal.


Download the pdf here:
Retail Real Estate’s Compounding Digital Debt