Top Takeaways from The Connected Mall of the Future ?· 2017-09-10 · Top Takeaways from The Connected…

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  • 1 DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright2017TheFungGroup.Allrightsreserved.

    September7,2017

    Top Takeaways from The Connected Mall of the Future

    TheFGRTteamattendedTheConnectedMalloftheFuture,theinauguraleventofaseriesofcollaborationeventsbetweenFGRTandtheUrbanLandInstituteAsiaPacific,whichfocusoninnovationinretailanditsapplicationstorealestate.

    TheKeyTakeaways

    1) Chineseconsumersaremoretech-savvyandwillingtotryoutnewdigitaltools.

    2) Consumersarenotcautiousaboutgivingawaydata.

    3) Shoppingcentersshouldhavetheirownapps.

    4) High-endmallsoutperformandthereisopportunityintier-2andtier-3cities.

    5) Shoppingintheconnectedmallofthefuturewillbesocialandseamless.

    ThethemeoftheeventseriescollaborationbetweenFGRTandtheULIAsiaPacificisRetailRevolution:DisruptorbeDisrupted,andthevariousconferencesandpanelsplannedthroughouttheregionaremeanttoshowcaseinnovativesolutionsintheretailspace.Theinauguralevent,TheConnectedMalloftheFuture,focusedonconsumer-facingtechnologiesthataugmentcommunicationandengagementwithcustomers.

    Duringthefirstpartoftheevent,DeborahWeinswig,ManagingDirectorofFGRT,presentedontherecenttrendsinretailtechnology.Herpresentationisavailablehere.

    Inthesecondpartoftheevent,WeinswigwasjoinedbytheCofounderandCEOofActiMirrorVictorRuizandtheFounderandCEOofNeomaFrancoisChabaudieforapaneldiscussion,whichfocusedonconsumer-facingretailinnovationsthatarerelevantforrealestatecompanies.

  • 2 DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright2017TheFungGroup.Allrightsreserved.

    September7,2017

    CompanyBackground

    ActiMirrorhelpsstoresbecomeomnichannelhubsbycreatingapersonalizedconsumercommunicationchannelandenhancingtheoverallguestexperience.

    Neomahelpsshoppingmallscreate,launchandpromotebeacon-poweredandaugmentedreality(AR)applications,andhelpsretailerswithinthemallinspireandattractcustomersassoonastheyenterthebuilding.

    KeyTakeawaysfromthePanelDiscussion

    1)ChineseConsumersareMoreTech-SavvyandWillingtoTryOutNewDigitalToolsThefirstquestiondiscussedbythepanelistswasrelatedtothedifferenceinshoppingbehaviorsbetweenmarkets.BothRuizandChabaudiesharedtheopinionthatconsumersfromMainlandChinaaremoreforwardwhenitcomestointeractingwithtechnologyduringaretailexperience,mostlybecauseoftheiruseofappssuchasWeChat.

    Forexample,lastyearNeomasupplieditsbeacon-poweredtechnologysolutiontothedeTourHK2016festivalinHongKong,whichhosted110,000localandinternationalvisitors,andfoundthatChinesevisitorsexperiencedsignificantlyhigherlevelsofengagement.However,consumersfromHongKong,aspointedoutbyRuiz,havebenefitedfromandexpectin-personassistancefromsalesstaff.Chabaudiecommentedthat,inmarketssuchasIndia,connectivityisstillaproblemwhichpreventstheadoptionofretailtechnologies.

    Source:FGRT

    ThepanelistsalsoagreedthatretailexperiencesintheUSlagbehindinretailtainment,whichpresentsabigopportunityforrealestateoperators,retailersandtechcompaniestomakeshoppingfunandexciting.

  • 3 DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright2017TheFungGroup.Allrightsreserved.

    September7,2017

    2)ConsumersAreNotCautiousAboutGivingAwayDataActiMirrorsdigitalmirrorsuseface-recognitiontechnologytocreatepersonalizedexperiencesforconsumers.Inoneinstance,thecompanyranaselfieapplicationthatrequiredconsumerstoacceptthetermsandconditionsonActiMirrorswebsite,and,notsurprisingly,fewconsumerstookthetimetodoso.Fromthisperspective,Ruizobservedthatconsumersarenotcautiousaboutgivingawaydatawhenengagedininteractiveexperiences.Atthesametime,startupcompaniesneedtopayparticularattentiontoprivacylawsandtomakesuretheyarecompliantwithregulations,becauseanylargefineorsuitcoulddramaticallyimpactthesurvivalchanceofastartup.

    Source:FGRT

    3)ShoppingCentersShouldHaveTheirOwnAppsThepanelistsdiscussedwhetheritmakessenseforshoppingcenterstobuildtheirownapps.Usersarereluctanttodownloadandusemultipleapps,soatthefaceit,theinvestmentdoesnotseemjustified.However,ifonetakestheviewthattheshoppingcenterisaretailplatform,thenamobileappcanaddsignificantvaluetotheconsumer,especiallyifnotallshoppingcentertenantshaveadigitalfootprint.WeinswigfurtherelaboratedthatthecaseforbuildingappsisevenstrongerforlargerREITSwhichoperatemultiplelocations.Theycanuseanapptocommunicatewiththeirvisitorsinadirectfashionandfurtherestablishtheirbrands.InChina,shoppingcenterscanuseWeChattoachievethesamepurpose,whilebenefitingfromtheapps963millionuserbase.

    4)High-EndMallsTendtoOutperformandthereIsOpportunityinTier-2andTier-3CitiesWhenaskedabouttheretailoutlookforshoppingcenters,Weinswigcommentedthathigh-endmallstendtooutperformthemarket.Forexample,AmallsintheUShaveperformedstrongly,seeingdouble-digitsalesgrowthinrecentyears.Thatbeingsaid,propertiesarestillfacingchallengesfromdecliningfoottraffic,duetotheexpandinge-commercesegment.Weinswigalsocommentedthatthereisanopportunityintier-2andtier-3cities,especiallyinChina,wheretherisingmiddleclass,higherexpectedlevelsofurbanizationandshifttoaconsumption-driveneconomyareexpectedtosupportretailprojects.

  • 4 DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright2017TheFungGroup.Allrightsreserved.

    September7,2017

    5)ShoppingintheConnectedMalloftheFutureWillBeSocialandSeamlessThepanelwrappedupwithadiscussiononwhattheshoppingmallofthefuturemightlooklike.Weinswigcommentedthattheshoppingcenter,whilemoreconnected,willbeaplaceforsocialconnectionsandcommunityactivities.Chabaudieremarkedthattheshoppingcenterwillprovideaunifiedshoppingandcommunityexperiencetoconsumers,whiletechnologysolutionswillbeabletomeasurethesatisfactionofvisitorsandsupplyrelevantdatatoshoppingcenteroperatorsandretailers.Ruizconveyedthatwiththehelpofinnovativetechnologies,consumerswillhavetothinklesswhenshopping.Instead,theywillgetwhattheywant,whentheyneedit,inaseamlessfashion.Inaddition,withasizablemillennialpopulationglobally,thefocusondeliveringmeaningfulexperienceswillonlyamplifygoingforward.

    Source:FGRT

    DeborahWeinswig:TheRetailRevolutionandtheFutureOutlookforShoppingCentersAttheevent,WeinswigpresentedFGRTsworkontheevolvingretailmarketandthetechnologicalinnovationsinthespaceastheyrelatetotheshoppingcenterindustry.Shepointedoutthreeglobaltrendsimpactingthefutureofshoppingcenters:1)urbanization;2)demographicshifts;and3)thehyper-connectedconsumer.

    1.UrbanizationUrbanizationisoneofthemostimportantdemographictrendsfortheretailsector,with66%oftheglobalpopulationforecasttobecomeurbanizedby2050,accordingtotheUnitedNationsWorldUrbanizationProspectsreportreleasedin2014.Urbanareaswillaccountforallpopulationgrowthacrosstheworld.Forexample,peoplelivinginChinesecitieswillgrowby100millionbetween2014and2019,andby292millionbetween2014and2050,accordingtoUNforecasts.

    Oneimpactofthisurbanizationtrendisthatnewinfrastructureprojectssuchasmetrolinescreatemorelocalcommunitieswithnewopportunitiesforretaildevelopment.Atthesametime,morepeoplelivingincitiesmeanssmallerlivingsspaces,andthisnecessitatesmoreplaceswherepeoplecanspendtimetogetheroutsidethehome.

    Source:FGRT

  • 5 DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright2017TheFungGroup.Allrightsreserved.

    September7,2017

    2.DemographicShifts

    SilversThesilverpopulationaged65andoverisforecasttogrowfrom8%oftheworldspopulationin2015to13%in2035,andisexpectedtoaccountforover33%oftotalpopulationgrowththrough2035,accordingtothePopulationDivisionoftheUN.Thesizeandgrowthrateofthesilverpopulationandofthesubgroupswithinitvaryconsiderablyacrosskeyregions.By2035,Japan,SouthKorea,WesternEurope,NorthAmericaandChinawillseesilversaccountforthehighestshareoftheirpopulations,atmorethan20%ofthetotal.

    Silversaredrivingahugelydisproportionateshareofconsumer-spendinggrowthinmanykeyregionsglobally.Insomemarkets,theyaredrivingnearlyallsuchgrowth.

    Retailersareoptimizingstoredesignsandlayoutstocatertotheneedsofsilvers,aswellasopeningsmallerstoresclosertowheretheylive,astheytendtotravelshorterdistances.Silverswillalsodrivee-commercegrowth,duetotheirlimitedmobilityand,consequently,theneedfordeliveryservices.

    MillennialsandGenZersThesedemographicgroupscomprise43%ofthepopulationintheUSandmajorEuropeanmarkets,accordingtodatafromEurostatandtheUSCensusBureau.Thisisasegmentofgrowingvalue,sincemillennialsareenteringthehigh-growthphaseoftheirearningspotential,whereasGenZershaveagreatinfluenceonfamilyspending.

    InChina,millennialsnowaccountforover30%ofthepopulation,representing415millionconsumers.ThisismorethantheworkingpopulationoftheUSandWesternEuropecombinedundoubtedlyaneconomicforcetobereckonedwith.

    Figure1.PopulationSizein2014,byYearofBirth(Million)

    Barlabelsrepresentthe%ofthetotalpopulation.Source:NBS/Euromonitor/GoldmanSachsGlobalInvestmentResearch

    11%

    14%

    16% 16% 16%

    12%

    7%

    4%

    0%

    2%

    4%

    6%

    8%

    10%

    12%

    14%

    16%

    18%

    0

    50

    100

    150

    200

    250

    Popu

    laZo

    n(M

    illion)

  • 6 DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright2017TheFungGroup.Allrightsreserved.

    September7,2017

    Figure2.ChineseMillennialsAreaBiggerDemographicthantheTotalWorkingPopulationoftheUSandWesternEuropeCombined,2014

    Source:Euromonitor

    AccordingtoastudybyBostonConsultingGroup,by2020,annualconsumptionbythoseaged1830inChinawillincreaseby14%peryear.Thisisdoubletherateofthepreviousgeneration.

    ChinesemillennialsdoappeartobemorewillingtospendmoneyonluxuryproductsthantheirAsiancounterparts.AreportbyMasterCardin2015,foundthatChinesemillennialsplantospendanaverageofUS$4,362onluxurygoodsoverthecomingyear,farexceedingtheluxuryspendingbudgetsoftheircounterpartsinSouthKorea(US$2,638)andtheAsianaverage(US$2,584).

    3.TheHyper-ConnectedConsumerIsAlwaysOn:MoreInformedandwithGreaterAccessConsumersareevermoreconnected,bothphysicallyanddigitally.AccordingtoresearchfromBoeing,airtrafficisexpectedtoincreaseatanannualrateof4.8%between2016and2035.TheGSMAssociation(GSMA)forecaststhatby2020,therewillbe5.8billionsmartphonesglobally,leadingtoa49%increaseindatatrafficbetween2015and2020.Thispaceofgrowthinconnectivitymeansanexpandingconsumerbaseforbrands,retailersandshoppingcenters,yetitalsospellsamorecompetitivelandscapeaswellasanincreasinglysophisticatedconsumer.

    Figure3.EstimatedAnnualGrowthRatesforPassengerAirTrafficfor20162035,byRegion

    Source:Boeing

    415

    353

    300

    350

    400

    450

    ChineseMillennials Totalworkingpopulalon

    Popu

    lalo

    n(M

    illion)

    TotalWorkingPopulalon

    3.1%

    3.7%

    4.8%

    6.0%

    NorthAmerica

    Europe

    World

    Asia

    WesternEurope

    USA

  • 7 DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright2017TheFungGroup.Allrightsreserved.

    September7,2017

    TheEvolvingRetailLandscapeandChangingShopperExpectationsCallfortheShoppingCentertoReinventItself

    ReinventingtheMallExperienceMalloperatorsarerethinkinghowtheydeliverexperiencestoconsumersandhowtokeepoccupancyrateshigh.

    Curationandnovelty:Pop-upsareusedtocreateacuratedmixofsmallerstoresthataddasenseofnoveltyandurgencytothemalloffering.

    Contentandevents:Artexhibitions,performancesandexclusiveeventshaveproveneffectiveindrivingtraffictoshoppinglocations.

    Locallygrownandmade:Consumersareseekinggoodsthataregrown,madeandproducedlocally,andthatincorporatemoreregional,artisanalflavorsanddesigns.KimcoRealtyhasexpandedaprogramthatofferssmallbusinessesoneyearoffreerentandreducedpropertycharges.

    Convenience:E-commercecompaniesarepartneringwithmalloperatorsonmorecompellingomnichannelofferings,includingadriveup,pickupserviceatmalls.

    ReinventingtheRelationshipwiththeConsumerMalloperatorsmustrethinkhowtheyengageandretaintheirvisitors.

    Tech

    Experiences&Entertainment

    NewTypesofTenants

    ConnectwiththeConsumer

    Conversations

    PersonalizedServices

    Community

    TheConnected

    Mall

  • 8 DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright2017TheFungGroup.Allrightsreserved.

    September7,2017

    ReevaluatingHowTheyThinkAboutTheirTenantsMalloperatorsmustrevaluatewhotheirpotentialtenantsmightbe.

    Onlinegoingoffline:Fore-commerceretailers,physicalstoresaremarketingassetsthatsupporttheironlinebusinessmodels.Theyrequiremoreinnovativeleasingmodels.

    Officeandwellnessservicebusinesses:Co-workingspacesandgymsrequireflexibleaccessschedulestooffermoreconveniencetousers.

    RethinkingHowTheyApproachTechnologyREITsandshoppingcenteroperatorsareturningtoinvestmentsinstartups,andrunningacceleratorprogramsasawaytoaccesstechnologyinnovationandfutureprooftheirbusinessmodels.Overthepastfiveyears,companiessuchasWestfield,theSimonPropertyGroup,GGPandMacerichhaveinvestedinretailstartups,whileWestfieldLabs,partneringwithR/GAVenturesontheConnectedCommerceAccelerator,openedaretaillabinSanFrancisco.

    PartneringwithTechnologyCompaniestoBridgetheGap:AGlobalOverviewofSolutions

    Entertainment:Location-Based,Fully-ImmersiveVirtualReality(VR)

    DreamscapeImmersiveisanewLosAngeles-basedstartupforlocation-basedVRthatisplanningtoopenaVRMultiplexinLosAngeles.

    NomadicVRisaCalifornia-baseddeveloperofVRgamesthatcanbetouchedandfelt.ThecompanyreceivedaninvestmentfromHorizonVenturesanddemoeditstechnologyattheWonderfulWorldsoftheWhampoamallinHongKonginJuly2017.

    Security:RobotsinShoppingCenters

    ThePrudentialCenterinBostonandtheWestfieldValleyFairinSanJosehavepilotedsecurityrobots.

    TheK-5robotbyKnightscopetakespicturesandvideo,andcandetectheatandCO2.Itleasesforamonthlyfeeofabout$8,000.

    Security:UsingCrowdsourcingtoCatchShoplifters

    SpotCrowdisanonlineplatformthatstreamsexisting,real-timefootagefromretailstoressurveillancecameras.

    LoyaltyandRewards

    SpringMarketplaceisusedat75livemalllocationsintheUStodate.ClientsincludeSimon,Taubman,Macerich,PREITandGGP.Whenconsumersusetheircreditordebitcard,Springtrackstheirspendinginrealtimeandofferspersonalizedmarketingandrewards.

  • 9 DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright2017TheFungGroup.Allrightsreserved.

    September7,2017

    FlexibleSpaces

    WithMe:Pop-upstoresaredesignedtobeassembledquicklyfromthegroundup.ThecompanyhaseightlocationsintheUS.

    Storefront,anAirbnbforretail,isarentalplatformoperatingineightmarkets,includingHongKong.

    OmnichannelSolutions:SolvingtheIssueofSame-DayDeliveryandEasyReturns

    HappyReturnsacceptsin-personreturnsfromparticipatingonlineretailersatsixmalls.

    ShopRunBackisanon-demandreturnsservicefore-commercebusinesses,whichoperatesreturnsdrop-offpointsaswellasanetworkofdeliveryprofessionals.ThecompanycurrentlyworkswithMangoinEurope.

    ShopTurn,aTechstars-backedcompany,isanon-demand,returnsserviceenablingconsumerstoreturnpurchasesdirectlyfromhome.

    OLAMisatechnology-enabledlogisticsplatformsolutionformall-basedretailers,providingconvenient,same-daypurchaseoptionsforshoppingmallpurchases.Thecostperpickupis$5.

    Hassle-FreeCheckouts

    ShopicisaQRcode-based,expressself-checkoutapp.ThecompanycollaboratedwithTycoonanapplicationthatenablesconsumerstoremovethesecuritysensoronit...