Proptech has the potential to create the theatre and experience needed to reinvigorate our stores and shopping destinations. The Internet of Things will be the pivotal architecture to achieve this; data the new energy to fuel a transformation that is customer-centric and personalised. Revitalised strategies and clever applications can help deliver better returns, lower risk and reduce vacancies.
While online is a clear change factor, engagement technologies such as virtual reality and augmented reality will give rise to immersive in-store experiences. As more activities shift to online and virtual spaces, more activities will become geographically disconnected; the boundaries between physical and digital less and less distinct. Consumers will not just be doing things differently, but doing them in different places. This holds as true for pure online retailers as it does for traditional ones.
Every technology needs to be considered as part of an overall digital strategy; it is no longer a matter of picking a few. The gap between “what is possible” and “business as usual” is in many cases widening. This represents different thinking from even five years ago and will test the strategies of physical retailers. It also has implications for online retail space as not all tech experiences can be realised online.
By 2030 more than 66% of purchases are forecast to still occur in physical stores and an even greater percentage influenced by in-store experiences. With less than 10% of stores, according to consultants McKinsey, deploying personalisation beyond their digital channels, there is plenty of room for proptech to shape a better physical future. Advance analytics can improve service. Facial recognition, location recognition and biometric sensors will become increasingly used in a digitised environment. In Asia robots are already being used to answer shoppers’ questions, find locations and provide other forms of information. This AI concierge is also collecting and analysing shopper interactions to turn their date into useful analytics for tenants. As technologies evolve these robots could become recommendation engines based on personalised inputs, helping find the best deals and providing coupons for use throughout the mall.
Facial recognition can be used to track customers and collect basis demographic data. Appropriately handled and with consent, such data could form the basis of new services offered to tenants, boost traffic and help give physical environments not only the “me too” features to compete with purely online retailers, but perhaps a superior local segmentation category.
Either way, an intelligent real estate strategy, together with smart buildings and some sort of shared data architecture across multiple stores could help deliver revenue improvements and improve the data available to investors. Such data could ultimately improve real estate valuation and the platforms needed for this could increase real estate liquidity.