Retail has long been one of the sectors most under fire from tech. How are agents adapting to protect their clients’ assets and stay relevant in an ecommerce world?
PlaceTech spoke to:
- Enrico Faccioli, chief operating officer of Gyana, big data startup
- Stuart Mitchell, director of NewRiver, retail and leisure investor, manager and developer
- Martin Summerscales, head of retail analytics at CBRE
What are the new skills that retail agents will have to learn?
CBRE: All the things that make a great agent: knowing the market, being great with people and having a deep knowledge of retail as a business – those softer skills won’t fundamentally change. But it’s all the additional skills that need to be brought as well. Clients are more data-hungry, analytical and focused than they were 10 years ago. Back then, most conversations were based on opinion from previous experience, it was largely anecdotal, but now people want to see how data allows them to make more considered decisions. There are some clients who want really sophisticated regression modelling to take place, to forecast what the likely success from a sales perspective of a new site is. We’ve seen a huge shift, but there is still a real spectrum of sophistication among different clients.
Gyana: Most retail agents are not as tech savvy as we would expect them to be, in terms of data they are using. At the most, I see them using static datasets, such as transport data and other retail offerings in the area. We think this is not enough, especially at a time when retail is struggling. We need more live data. Retail agents need to understand the people moving in and out of an area, to be able to match physical space with ideal occupiers successfully. Looking at Bicester Village on our platform as an example, we’re able to see car preferences, if a customer is driving a Mercedes, they’re more likely to prefer luxury brands. The retail agents who can show all this data, as proof to be able to convince investors and occupiers that having a data-driven approach to matchmaking is really powerful, will be in a strong position.
NewRiver: Retail agents and retail investors are having to look more into identifying alternative uses to fit into what would be traditional retail space. At present, 18% of all UK retail sales are currently done online, and that is forecast to increase to approximately 30% by 2030. Consumer habits are changing, choices are expanding, they want more convenience at a cheaper price – they want everything now. It’s about adapting to and understanding that. Investors like ourselves are working much closer with retailers directly, forging strong relationships.
What does a retail agent’s daily routine look like in 2040?
Gyana: There will potentially be a marketplace based on the retailer’s needs, where they can input parameters, and based on their offerings will be matched with their ideal location. The relationship side to the role of agents will still be important, but they will need to have those softer skills complemented by data and have that maximised by artificial intelligence.
CBRE: Human machine interaction will play a big part in the day job. Currently, it’s largely about person-to-person interaction. This will still be hugely important but I do think AI will touch our sector. There will be a much greater interaction between human and machine, whereby you might ask a database, maybe even verbally, what the key trends are, what rents are being paid, what’s going on. However, that interpersonal explanation of data and having that ability to sit down and talk through what these things mean will be an incredibly important part of the job.
NewRiver: Retail agents will still be needed in 2040. A good example of that is really down to relationships, and whilst we are all in favour of using tech and IT to speed up processes and make our day-to-day business more efficient, there is always so much more you can counter from a face-to-face or telephone conversation between interested parties, much more so than data inputted into an app or a website.
Are there examples of tech already impacting the role?
CBRE: We’re seeing technology assist with structuring and formalising data collected by agents in their day-to-day, in a much more considered way. Historically, it was all done by word of mouth or personal relationships, with information tending to be held in people’s heads or shared in meetings. Increasingly, we’re seeking to capture that data, store it, and organise it in a logical way so that it is much more easily accessible across the business. It’s much easier to store and capture data than it was 10 years ago. We’ve moved towards graph orientated databases, which allow us to link lots of different unconnected data together. Twenty years ago, CBRE used to put a survey in Reader’s Digest, which asked 100,000 people where they would go shopping. Now we can access data from consumer mobile devices and we can see millions of responses in real-time, because the data is collected in a 24-hour cycle.
NewRiver: Retail agents have been using data to provide insight for years, it’s nothing new. However, I think retailers’ sales are under more scrutiny to make the right decisions, so the more support and data backup we can provide the better. Retailers want to be 100% when they’re coming to open a store or to remain in an existing store, and I think data plays a large part in that. As well as measuring footfall, how people access our retail parks, we also commission a lot of retail research on our retailers and their requirements for our shopping centres and retail parks to identify where the demand is, and ultimately to make sure that we’ve got the right retailers in the right assets.
What will be the benefits of going digital?
Gyana: Agents will get more business from being able to differentiate themselves, by increasing their quality and increasing their reputation. It will allow them to show value as an agent, not only by filling a space but with the right occupier that will thrive in an environment where not a lot are doing well.
NewRiver: The benefits are ultimately improving speed and efficiencies. We feel that tech has an important role to play alongside traditional face-to-face relationships.
CBRE: The greater quality of data we have, the more robust we are in adhering to the advice we’re giving to clients. From a client perspective, we would be able to drive better value for them, respond more quickly and in a more consistent way – our quality of service should improve and the speed in which we deliver it should come down.
When do you expect to see the tipping point for adoption?
Gyana: We’re already seeing willingness from agents, with some already using Gyana and others in the process of being onboarded. The shift is already happening, especially in large companies where there’s definitely more budget available for these initiatives. However, as technology gets cheaper and more accessible, I can see more adoption over the next couple of years by smaller agencies.
CBRE: Real estate will be an industry that is a late adopter of technologies. The more numerate professions, like accountancy and law, have greater opportunities to automate processes and bring in technology. It’s difficult to put timelines on it, but for example the legal sector, we’re already aware of people using natural language processing to look through evidence and case law to find relevant bits of information that can then be assessed by lawyers. The technology there is effectively replacing the work of paralegals. From a real estate perspective, looking at lease consultancy to provide professional advice on a lease, the technology employed will be very similar, however at present that’s something I’m not aware of being used.
Who will be the winners + losers?
Gyana: The ones that fail will be the ones who adopt a very short-term approach, they will try with connections and relationships as the main driver, but as we move forward there will be data and insight counterbalancing the whole relationship game. The ones that will be the winners will be those who are able to match relationships between occupiers and asset owners with a data-driven approach.
NewRiver: The attributes of a successful agent in a tech world are those that are able to embrace the new technologies that are available to them as well as harnessing strong existing face-to-face relationships. Those relationships are between the consumer, the retailer and the investor. Those that will fail will be those that are slow to react.
CBRE: As the world’s largest commercial real estate advisor, we have a much greater visibility of what is happening on a global scale. Being able to collate that data should become a really core strategic, competitive advantage for those big firms that have that global coverage. I think for the more niche practices, it may become harder for them to compete for those globally focused occupier instructions. Having said that I’m not in any way suggesting that in 2040 niche practices will be no more, but they will have to be local experts, perhaps they will have to partner up with a network of similar practices across the world.