2020 is the Year of Physical Retail (r)Evolution

FOOTPRINTSFORRETAIL.COM

2020 is the Yearof Physical Retail (r)Evolution. HERE’S FOOTPRINTS' IMPERATIVES FOR #FUTUREOFRETAIL

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THE #COVID-19 PANDEMIC WILL CAUSE A LASTING CHANGE IN THE WAY WE SHOP

The survivors of this Retail Apocalypse will need to address the new shopper behavior, the ‘new normal’

At this pivotal moment, when the economic & social environment changed globally, not by choice, but by legal enforcement, only those retailers will survive that can adapt best to the new business environment by transforming their model. Failing this, they risk driving into extinction.

“ Shopping habits are all about convenience. And

there was a moment when convenience changed a

new paradigm. Digital models took over our

expectations about what convenience is.

THE NEW NORMAL



Evolution is driven by an ongoing need to adapt to a changing environmentEVOLUTION

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The evolution of the physical retail means a revolution of their perspective over the value they generate for their shoppers.

We are sure you find all of this very familiar. It is the same call to action for change like all the other before the lock-down. Nothing new here. Just the same old statement that something old, as it becomes deprecated, needs to adjust to the present and, even, to the future.


EVOLUTION

» this call to action is lacking meaning for the majority of physical retailers, in the same way a word loses its meaning if you repeat it too many times over and over again;» most physical retailers won't learn anything from this COVID-19 situation, and this is good;» evolution is about a few survivors, the best fitted and the bravest, not about everyone; if everyone survives, we would end up in the same old world;» a revolution is a must for a new world to rise;» a revolution is NOT about comfort, habits, and familiarity;» a revolution is about blood, brains, and sweat;


FROM THIS PERSPECTIVE, WE DO BELIEVE THAT

This is a time to study, test, do iterations and take risks. This is not a time for “make it simpler for me to understand it”. Only familiar, validated models are simple to explain. And for all physical retail, all validated models are just collapsing. And the new ones are not discovered and validated yet.



Those physical retailers that will find meaning behind this call to action of change, those that will do the hard work to search for new forms, to use science, to have the patience to listen and test all perspectives, to challenge anything that looks familiar to them or make them feel comfortable, to be afraid of anything that comes out of their own office instead of being generated by insights from real shoppers.

Those physical retailers that will be ready to lose some more money just for the chance not to lose them all.

These retailers will be the most prepared to enable the accelerated digital transformation of retail as we know it. And they will be the ones that will survive.



FOOTPRINTSFORRETAIL.COM ‣

HERE'S A FEW NOT-SO-OBVIOUS PERSPECTIVES

THAT WE AT FOOTPRINTS BELIEVE THEY SHOULD

BE CONSIDERED AS IMPERATIVES

BY THE PHYSICAL RETAILERS,

AS THEY ARE GENERATED

BY REAL BEHAVIORAL DATA FROM

REAL SHOPPERS.


1ST IMPERATIVE

Learn about Proxemics

If you are a physical retailer, you are in a business where you do profits based on the physical interactions of humans with and within a physical, usually indoor, environment.

“ Proxemics is the study of the nature, degree, and

effect of the spatial separation individuals naturally

maintain (as in various social and interpersonal

situations) and of how this separation relates to

environmental & cultural factors.

MERRIAM-WEBSTER DICTIONARY


PROXEMICS

PROXEMICS


COVID-19 JUST MADE THE HUMAN USE OF SPACE THE CENTER PIECE OF A GLOBAL LEGAL ENFORCEMENT.

Physical retail property investors, architects and retail experience designers will need to learn more about Proxemics before investing in retail properties.

Edward T. Hall, the cultural anthropologist who coined the term in 1963, described the interpersonal distances of a person in four distinct zones:1 intimate space2 personal space3 social space4 public space


PUBLIC SPACE

25 FT( 7.6 M )

12 FT( 3.6 M )

4 FT( 1.2 M )

SOCIAL SPACE

PERSONALSPACE

INTIMATE

SPACE

PROXEMICS

It is obvious that, not matter the culture, these 4 zones have now become much larger, taking up more space, because of COVID-19.

This is why the idea of the intimate and the personal space is now a critical part of the shoppers' expectations around convenience. The design of a future-proof, sustainable and profitable shopping experience will need to start with Proxemics and the study of how space is used by people living in a particular catchment area of a retail property.

This is why, if you are involved in physical retail, Proxemics should be a new word and a new concept you must learn about today. Expectations shoppers have around their comfort zone are not to be taken for granted any longer.

PROXEMICS



2ND IMPERATIVE

Start looking for the right sign (a reference to Semiotics & KPIs)

SEMIOTICS & KPIS


A sign stands for something. We communicate indirectly through signs, and make sense of our world by interpreting signs into meaning.

In business, signs and symptoms indicate an existing or potential economic reality. Whereas a symptom is subjective, that is, apparent only to the business itself, a sign is any objective evidence of an economic reality that can be observed by others outside that business.

We have very nuanced ways of interpreting the world. For example, blue is a dichotomous color because it represents trust and serenity, but it can also symbolize depression and loneliness.

SEMIOTICS & KPIS It’s all about culture. And sometimes, it’s all about business-driven culture.

Only in the 1940s manufacturers settled on blue for boys (and pink for girls), after being vice — versa for decades in the sex — appropriate color charts.


girl boy

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KEY TAKE-AWAY?

The meaning of signs is relative. And you need to explore more for those signs that have real meaning for your business model.

The right sign will tell when you’re generating true value for all your stakeholders: your shoppers, your tenants, your employees, your shareholders.


SEMIOTICS & KPIS

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WHAT IF

THE TRADITIONAL SALES STRATEGIES

ARE ACTUALLY A SYMPTOM?

WHAT IF THE TRADITIONAL SALES STRATEGIES ARE ACTUALLY A SYMPTOM?

What if when your retail property is the place where more sales are happening, that is just a symptom of unsustainable sales strategies emerging. More sales do not necessarily imply better value for your shoppers.

In the same way promotions would drive short term sales, but they would eat out from your longer-term perceived value and profits.

In this scenario, it would mean you will be out of the retail gravitational pull as soon as those tenants and their short-term driven sales strategies will fail to deliver sustainable value to the surrounding community of shoppers.


SEMIOTICS & KPIS

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WHAT IF

THE FOOTFALL TRAFFIC IS

ANOTHER SYMPTOM?

WHAT IF THE FOOTFALL TRAFFIC IS ANOTHER SYMPTOM?

Your footfall counting system is like “The Game of Likes”, isn’t it?

In Social Media everyone is running for more Likes, while in return that has nothing to do with the engagement rate and neither with conversions. It is a great way to communicate success to your competitors. Maybe this is similar when counting your retail property visits with basic counters.

You are used to having very large numbers that are always growing on an annual basis so you can keep your tenants happy and your competitors upset.


SEMIOTICS & KPIS

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WHAT IF THE FOOTFALL TRAFFIC IS ANOTHER SYMPTOM?

Is this telling something real about your long — term success? How is this going to play out when it comes to post-COVID regulations?

This is the case when the weaker aspect of footfall counting becomes visible. There are going to be a lot less numbers than before.

While, in reality, each visit of each shopper will most probably be more valuable because everyone entering your retail property will have a stronger sense of purpose and purchase.

This will mean less people wandering around your premises without spending money.


SEMIOTICS & KPIS

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OUR SUGGESTIONS

YOUR RETAIL PROPERTY AND ITS ENTIRE ECONOMIC

MODEL IS DRIVEN BY BEHAVIORAL ASPECTS.

THE MOST RELEVANT PERSPECTIVE IS THE BEHAVIORAL

ECONOMICS OVER YOUR VERY COMPLEX ECOSYSTEM WHERE

SHOPPERS HAVE VERY COMPLEX DYNAMICS IN RELATION

TO WHAT YOUR PREMISES OFFER.

START LOOKING FOR BEHAVIORAL DATA DRIVEN KPIS AND

START CONSIDERING NET PROMOTER SCORE AS AN INDICATOR

OF SUSTAINABLE BUSINESS PROPOSITION IN RELATION TO THE

COMMUNITY LIVING IN YOUR CATCHMENT AREA.


3RD IMPERATIVE

Design your shopping center’s experience around Social Business

Your shopping center is a Social Business by its very nature. The initial key purpose of the shopping centers, besides the convenience, was to become the “third place”.

In his book “The Great Good Place”, Ray Oldenberg defines the “third place” as:

1 if home is the ‘first place’,2 and work is the ‘second place’,3 the ‘third place’ is an informal gathering space where people can mingle outside the realms of the first two environments.

SOCIAL BUSINESS


Convenience is still the central concept in the design and development of shopping centers. They are designed in the first place as a one—stop—shop for shoppers to buy everything in a single place. And their target audience is defined by the concept of the catchment area, which is the community that surrounds the shopping center’s physical location and its value proposition. These two aspects merge into the concept of “retail gravitational pull” and it is currently still the most important success criteria when investing in any type of retail property.

This logic applied in the new context is prone to generating problems. Convenience is still king among consumers — but shopping centers can’t compete with the internet. This may be one of the more insidious effects of online shopping on the retail property landscape.


SOCIAL BUSINESS

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While the needs around shopping are lessened, consumers’ need for a “third place” is still very real. This is an insight for shopping centers to grasp and translate it into a key differentiation for the long run.

The need for a “third place” is actually an old concept. Shoppers in urban areas had been flocking to large department stores for over a century. But the development of suburbs in the mid—20th century created new needs. In many cases, suburbanites also needed places to hang out, and emerging shopping malls, from the very beginning, functioned as both retail destinations and town centers.


SOCIAL BUSINESS

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Besides being good for the community, third places can be cash cows; it is the reason why Starbucks worked the concept into its mission statement. And pioneering mall owners are following suit, creating mixed—use spaces that provide reasons for consumers to visit regularly, and whenever possible, linger.


SOCIAL BUSINESS

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What is Changing?SHOPPING CENTERS ARE BEING FORCED

TO REDOUBLE THEIR EFFORTS

TO OFFER MORE THAN AN

OPPORTUNITY TO SHOP

The moment of change in the expectations around convenience, generated moments of dissatisfaction.

Shoppers now expect instance & memorable experiences as their needs are outsourced to algorithms, automation and smart devices.

Retail property owners and operators need to deliver a shopping center design and a shopper experience that is in line with the purpose of the “third place”.


WHAT IS CHANGING?

Shopping centers need to become Social Business by Design. This means rebuilding their entire economic model around:

1 Identities — who the shoppers are; what they want and what are their expectations; what they search for; what they shop and how they spend their leisure time;2 Interactions — how the shopper interact with one another and with their preferred brands and what’s the shopping center’s role in these interactions;3 Communities — what are those shared interests they have with their own community; what are their affinities, passions and preferences as expressed by the online communities they are part of; and how can you benefit from this knowledge within your ecosystem.


WHAT IS CHANGING?

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Shopping centers must evolve from performance — centric (footfall traffic and sales) to purpose, experience and community-centric.

Shopping centers must benchmark themselves against other online marketplaces and online retail ecosystems, instead of their offline competitors.

» Every time someone in your catchment area performs a search and you are not the source of the response, you lose;» Every time someone in your catchment area looks for some fun thing to do and you are not there you lose;» Every time someone in your catchment area registers their data and provides access to their needs and expectations to some other retailer, you lose.


WHAT IS CHANGING?

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This is exactly the reason why the new reality of retail properties is where physical shops are a “Customer Acquisition Media Channel”, not a distribution channel. Sales, per se, are not the main objective (hence beware of the allure of “turnover rents”).

The aim of a shop is to inspire a shopper and to learn valuable knowledge about the shopper’s behavior and needs.

Thus, the two main focus points when aiming for a continuous improvement of a retail property’s economic model are: shoppers’ behavioral analytics & digital asset management.


WHAT IS CHANGING?

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FOOTPRINTS IS THE ADVANCED

AI MARKETING PLATFORM FOR BEHAVIORAL

PROFILING OF PHYSICAL SHOPPERS,

ANTICIPATING THEIR NEXT MOVE AND

IMPROVING THEIR CUSTOMER

EXPERIENCE.


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2020 is the Year of Physical Retail (r)Evolution