It might seem hard to believe at times, but not all new and interesting technologies in retail real estate start with "www" and end with "dot.com." Shopping center owners and developers are adopting a wide variety of high-tech tools to improve client development, customer service, security, market research, site selection and other fundamentals. From human resources intranets to online leasing systems, these technologies enable users to save time and money by, in effect, transcending the boundaries of time and space.
Executives with Chicago-based General Growth Properties examine flood damage near a mall, not by hopping on an airplane, but by dialing into live, web-enabled digital cameras. Clients of New York City-based Garrick-Aug & Associates evaluate properties, not by driving to multiple locations, but by visiting Garrick-Aug's technology center, where a database provides instant access to street maps, traffic counts, demographic data, and detailed photographs.
Some of these tools seem straight from a James Bond movie. If General Growth executives want to know what radio stations customers prefer, for example, they don't have to conduct an extensive survey. The company now employs a device that records exactly what radio stations shoppers are listening to as they pull into mall parking lots.
Beefing up customer service An industry publication recently ranked Jacksonville, Fla.-based Regency Realty Corp. as the No. 1 developer of grocery-anchored shopping centers in the country. Regency Realty attributes that success in part to its 2-year-old Premiere Customer Initiative (PCI). The internal database - which combines customer profile information with other market demographics to aid retailers in site selection - has helped the firm find new ways to improve customer service, says Mary Lou Fiala, president and chief operating officer.
"Our goal is to be easy to do business with," Fiala explains. "We want to serve our employees, service our retail customers, and serve our shoppers. We have what we believe to be the best retailers in every category sorted by use: the best coffee shops, the best gift stores. What we have done is to collect customer profile information from those retailers. Who shops in their stores? How old are they? What is the average household income? What do they do for a living?
"We take all that information and marry it to the information we have for our individual centers," Fiala continues. "This is a proprietary technology. We understand from the retailers that no one else has it."
Regency Realty uses the PCI database in different ways depending on its relationship with retailers. If there is a retailer Regency Realty wants to do business with, for example, it will set up a meeting and present a book filled with information drawn from the PCI database. With this data, Regency Realty can show prospective customers locations within the firm's portfolio that most closely fit that retailer's needs.
"For instance, last November we went to Seattle and met with Starbucks. We already had 16 Starbucks locations at the time out of our 218-center portfolio," Fiala says. "Based on the PCI database, we were able to present to Starbucks an additional 60 locations that technically Starbucks should be in based on customer profile, demographics, co-tenancy, etc. Starbucks came back to us and approved 44 of those locations, and we have already opened five of them. Typically, this is done business-by-business, market-by-market. Thus far, we have had 29 such meetings with retailers across the country."
The PCI database also allows leasing agents to best fill vacancies in a shopping center, Fiala notes. They can find the best tenant mix for the center based on PCI's supply-demand forecasting system.
Fiala attributes Regency Realty's recent success to the company's disciplined investment strategy and the services provided by the PCI database. "Last year we developed over $100 Million, and we were 98% leased upon stabilization of our developments," she says. "Today, we are 70% pre-leased prior to construction on our developments."
Other aspects of Regency Realty's focus on customer service include its human resources intranet and its online leasing system, which is in the developmental stage. Fiala estimates that by putting lease agreements online, the overall process of completing a lease agreement will be reduced from a month or longer to about one week.
Minding the store in real time General Growth Properties recently began integrating advanced security camera systems throughout its portfolio. These remote video monitors offer many benefits over traditional closed-circuit televisions, says David Levenberg, corporate security director.
The remote video technology allows General Growth to hook a modem to the mall video system, giving executives the ability to dial in through a desktop or laptop modem. The system transmits live video via a telephone line. "Let's say that I get a call that there has been a natural disaster or an explosion at a particular property," Levenberg explains. "It could be across the country, but I can still dial into that camera system and actually view live video of what is going on. I can talk to someone at the site to give him advice and act as a resource. I can also record parts of the transmission for insurance or legal purposes."
Digital recording is another aspect of this technology that is an improvement over traditional security systems. "It allows for saved time because you do not have to search though a lot of tape to find the few seconds you need to see," Levenberg notes. "Instead, you can type in a time and it will go right to it. The video is also crystal clear once you get to it instead of the distorted images the traditional cameras provide."
Levenberg offers the example of a recent flood at a property adjacent to a General Growth mall in Michigan: "There was a lot of water damage and some automobile damage too. One of our attorneys had to write a letter to the owner of the adjacent property. Before, she would have had to travel to the site to look at what happened. Instead, she and I were able to dial into the cameras and see live images of the damage.
"We were talking to someone on site who was looking at the same transmission so he could describe to us what happened," he continues. "The attorney could immediately respond to the property owner with concrete knowledge of what happened instead of having to make a guess or travel to the site."
Two General Growth shopping centers now use this technology, but the company plans to install it in all new properties. "This will be the standard for all new camera installations," Levenberg says. "We are also going to retrofit some of the existing systems."
The savings in time and travel costs far outweigh the added expense of remote video monitoring. "Basically it is just the modem and the software - that's pretty much it," Levenberg notes. "Some of the Internet-based sites may be a little more expensive, but the cost difference is really negligible."
Don't turn that dial General Growth also uses cutting-edge technology to assist in market research. Produced by a Birmingham, Ala.-based company, the Mobiltrak systems gives General Growth the ability to monitor the radio stations customers are listening to as they drive into mall parking lots.
General Growth's Altamont Mall near Orlando, Fla., began using Mobiltrax a few months ago. The system uses solar-powered monitors that are strapped to light poles in the parking lot. As cars approach, the monitors measure and record the radio frequencies emanating from car stereos. The system captures measurements for about 20% of the cars coming into the mall, so it is a very large sample, according to Kristen Moore, marketing director for Altamont mall.
"Every week I can look and see what radio station my customers are listening to. I can do it by time of day and by entrance," Moore explains. "We also haveseveral monitors pointed at the main road in front of our property. That way I can tell if there are any differences between those turning into the shopping center and those who go by it."
Mobiltrak helps Moore choose which stations would be best to have onsite for remote broadcasts during promotions. "If I have a radio station on site for a remote or for a promotion, I can see how effective that promotion was by whether there was a bump in customers listening to that station during that time period," she says.
The mall spends $250,000 each year on radio advertising. In the past, it has relied on a commercial ratings service for information about radio listeners. But that approach is limited, Moore says, noting that the ratings service "measures the whole market; it does not allow you to get to the detail of your customers.
"Mobiltrak allows us to understand not only what stations our customers are listening to, but also the time of day in which it would be best for us to buy radio time," she says. "I think it is so exciting to not just guess on where to place your media dollars."
Location power The Northeast's largest retail brokerage firm, Garrick-Aug, recently invested more than $1 million on an extensive technology center. It enables Garrick-Aug executives to simultaneously present multiple layers of detailed site information to clients. "This is a proprietary technology. It is all in-house," notes chairman Charlie Aug. "We created it during the last two years, and we were awarded a patent for it in March 2000.".
Garrick-Aug's database includes a broad range of criteria needed for informed site selection decisions, including street maps, highway, pedestrian, and subway traffic counts, demographics, and photographs. "We even have aerial shots taken from a helicopter of locations and surrounding retail districts," Aug explains. "Clients also can see what the district would look like if they were driving down the highway."
Garrick-Aug compiles information from the database and presents it to clients in a room designed specifically for multimedia presentations. "It is a very comprehensive plan," Aug notes. "Let's say that we have 10 sites we want to show to a client in three states. It might take us the better part of a week to drag them around to all the sites. Well, we can put these projections into our technology center, and the client can view them and compare them all in one day. Maybe there are things the client doesn't like about a site. Maybe he wants to be closer or farther away from competition. Maybe he doesn't like where the curb cut is. If he can see all this information, plus the demographics, he might decide that he doesn't want to see a few of those sites. That can save him a quite bit of time."
Among industry insiders, the consensus appears to be that retail real estate has been slow to embrace technology, but it's clear that such attitudes are changing. Observers say technology will continue to develop at an exponential pace, becoming more useful and less expensive. And judging by current trends, the shopping center industry will become as hard-wired and tech-savvy as any other sector of the new economy.