Expert Insights on the Future of Retail
Using technology and data to enhance customer experience became a key theme Tuesday at TCB Talks: Retail 2030. Experts in commercial real estate, e-commerce, branding and mall development joined Twin Cities Business and a sold-out crowd at Mall of America for a conversation about the future of retail, moderated by editor-in-chief Allison Kaplan. Here are a few key takeaways.
The data goes both ways. The interactive directories that Mall of America installed two years ago do more than help customers navigate the mall more efficiently. Every search term entered is being analyzed by the mall, says Jill Renslow, senior vice president of business development and marketing at MOA. That data helps MOA prioritize the most important categories to shoppers, or specific brands that are in demand. “Being able to really read the data is very important for the future,” Renslow says.
Know the why with tech. “Tech shouldn’t lead; it should help the experience,” Renslow says. And it isn’t a gimmick, adds Michelle Mesenburg, Target’s senior vice president of marketing retail brand experience. “Technology is foundational…the power is in the knowledge.”
Negotiating retail leases isn’t just about terms anymore. “Increasingly, my role is to be a consultant,” says Tricia Pitchford, senior vice president of leasing for Mid-America Real Estate-Minnesota. That means helping retail centers re-imagine their property and even suggesting to retailers ways to make themselves a bigger draw. “We’re constantly now consulting. We’re taking risks on the little leases. For landlords that are willing to be open minded and take risk, I say that long term those are the ones that are going to be successful.”
Know your value proposition. “People either want a deal, an experience, or something they align to,” says Jeremy Segal, founder and CEO of online daily deals site Proozy. “Sustainability is huge. Cause marketing is huge. Amazon has changed the game for consumers where people now expect fast service, they expect great service, and it needs to be purchased through a very credible company. We want people to trust us.”
Prioritize discovery. “Guests come to the store because they need something, but they really come to the store because they want to discover something,” Target’s Mesenburg says. “The experience at Target has changed over the last three years.”
Be open to change. “What we’re finding is the experiences are changing every few years, and that makes things a little challenging for us,” Mid-America’s Pitchford says. “We used to do 5-10 year leasing. Now, some things don’t have the staying power for long leases. So then we’re trying to kind of match up spaces with users and economics and trying to figure out what is the best fit for the property? You have to understand what drives traffic and sales at each particular property.”
What a retailer needs to succeed: “To be successful with a storefront, they have to be successful online,” Renslow says. “It’s not necessarily about the sales by square foot anymore, it’s about making sure you really know your customer.”
Adds Mesenburg, “People also need a sense of community and connection, and that’s what storefront retailers have as a competitive advantage.”
Segal’s advice: be nimble. “Learn your customer–where they shop, what they do, how they behave—that’s really critical. Pivoting is a big deal. It also helps to have a lot of cash.”
The future of retail is…
About convenience. “It’ll really be about centralizing services so that you don’t have to go to ten different stores to pick up items,” Renslow says. you can go to one place, grab your stuff, and then go have experiences with your family. Because time is money.”
About connections. “I think the answer is we don’t know. I think what we do know is that digital has disrupted—people are looking for ease and options,” Mesenburg says. “But the more they’re online, the more they need connection and socialization and so that’s where brick and mortar aren’t going anywhere. We need to pay attention to what’s important to people: sustainability and climate change, for example.”
About data. “There’s such an opportunity to grow a business based on data,” Segal says. “In a way, it takes the risk out of it and there’s nothing better than taking the risk out of business.”