By now you are probably familiar with the term ‘big data’. But what does it actually mean and how can retail and leisure landlords harness and analyse the figures available for the benefit of their schemes?
Tracking product sales information is a good example, and perhaps the simplest, of how big data can be used in the retail sector. Yet the potential scope is almost unlimited, encompassing everything from live information on retailer turnover and tracking click and collect use to monitoring the impact of online shopping on physical sales.
All of these can help to determine the value bricks and mortar stores play in generating additional sales which don’t necessarily go through the physical tills.
Big data can also be used to monitor footfall, customer spend and conversion rates, better informing landlord decisions on how a retail destination should be marketed to attract the widest possible shopper demographic and appeal to new tenants. For investment sales, it can provide potential buyers with an in depth insight into the performance of the asset. Equally, big data can be used as a leasing tool by showing new retailers why a particular centre should appeal to them.
Insight on individual tenants, such as monitoring when lease breaks are coming up or identifying poor trading performance and potential solutions, can be a very valuable tool for asset managers. Analysing service charge information and occupational costs can also be used in the benchmarking of shopping centres.
While proper analysis is required to use big data effectively, we have found that simple presentation in a shareable format is best received across the board. With that in mind, Savills is currently in the process of developing an app which can be used to track big data across all 140+ of our managed shopping centres. Another challenge can be retailer buy-in, as some are still nervous about sharing information on sales and other aspects of their performance.
Of course, big data comes with some challenges, too. The complex nature and volume of figures involved means that the biggest test lies in ensuring that landlords, retailers and agents involved with a scheme actually understand the data.
Ultimately, big data is not a standalone solution to a successful shopping centre as customer experience, retailer engagement and quality of physical product remain key. However, it can play a vital role in ensuring all of these reach their maximum potential.