By: Brad Howarth, researcher, speaker and author
If the emergence of ecommerce has at times presented an existential threat for brick-and-mortar retailers, then the same must be true for those organisations to whom they pay rent.
But despite the growth of online retail and the arrival of US behemoth Amazon on Australian shores, shopping centres have proven remarkably resilient, with retail floorspace in Australia continuing to grow.
And it turns out one of the key factors fuelling that growth is the same one that has helped propel ecommerce companies forward – data analytics.
"Data is now seen as a strategic enabler for the business, and we are continuing to gain new investment internally."
This is certainly the case for Melbourne-based Vicinity Centres, which operates or manages more than 80 centres around the country, including the nation’s largest by sales in Chadstone. In recent years the company has made significant investments to improve its ability to harvest and analyse data, under the stewardship of its General Manager, Data Science and Insights, Genevieve Elliott.
Elliott says while real estate investment trusts (REITs) have traditionally focused on their B2B customers (the ones who pay them rent), they are no longer their sole concern.
“The consumer is now in the driving seat and is the key driver for the product we need to develop,” Elliott says. “But when we looked at what we actually knew about our shoppers, it was not a lot.
“So if the customer was going to be the driver of key business outcomes in the future, then we needed to invest in getting to know them, and making sure that whatever we did in the future was relevant to them.”
That has meant significant investments in audience segmentation around shopping drivers, and the beginnings of an NPS program. But the greatest change has come through investments in data gathering technology.
"In some ways it is being forced on us and in other ways we are driving it"
Traditional methods of shopper engagement involved an intercept survey of 700 to 1000 shoppers, conducted every three years, with potentially biased results.
Now Vicinity has installed a single Wi-Fi network throughout its properties. And while this provides free high-speed bandwidth to shoppers, it also provides a trove of anonymised data thanks to the unique MAC addresses of the mobile devices shoppers bring into the centres with them.
“Whilst we can’t identify individuals, it gives us metrics we have never seen before – things like dwell time and frequency,” Elliott says.
From an original Insights team of three Elliott has grown a data science function of nine people that works side by side with a talented team of five data engineers. She has also ensured the function has its share of storytellers.
“I have some really awesome analytics capability, but they are also very good at making these concepts simple,” she says. “From the point at which we started until now there has been a complete mindset change around data.
“Data is now seen as a strategic enabler for the business, and we are continuing to gain new investment internally. For example, another business area has offered to fund a resource into the team because they can see the value of a really strong analytics capability combined with complicated data sets and being able to make sense of those.”
Ultimately the insights they uncover will help Vicinity as it strives to build out an increasingly compelling offering for shoppers.
“Our role is to aggregate an audience into a marketplace so that commerce can take place,” Elliott says. “The fact that most humans react positively to in-person connections means that physical environments will stay relevant, but how relevant is the next question.
“And so our job is to make sure that we take that consumer mindset, in terms of assessing trends, desires, and satisfaction, and feed all that back in to make sure our offer stays as relevant to consumers as it can.”
The investment is also to the liking of Vicinity’s commercial clients, who Elliott says have been rapidly building their own data capabilities.
“In some ways, it is being forced on us and in other ways we are driving it,” Elliott says. “We have to stay relevant to our retailers, because they are the ones with the choice between digital and physical space and importantly, aligning both. And we need to make sure we are keeping pace with them in terms of how we are thinking about data.”
Genevieve Elliot, General Manager, Data Science and Insights, Vicinity
Although an accountant by training, a stint at JP Morgan in Europe saw Elliott exposed to the analytical side of marketing. After moving back to Melbourne she took a finance role with a commercial property company and found herself attracted back to the marketing role.
“I’d made enough observations about how marketing could be rethought in shopping centres that I was asked if I would take on the marketing function,” Elliott says. “It is still a very strategic function. It has to look at solving business problems, but doing it in a way that is evidence-based.”