Retail Destination Live relocated to Old Trafford Cricket Ground in Manchester to welcome even more delegates, helping people discover, connect and celebrate the retail destination community. Darren Pearce, Centre Director at Meadowhall, returned to host an energetic Revo conference that sparked debate and learnings about the industry’s pressing topics and trends.
From challenges to opportunities, the morning focused on environmental, social, and governance (ESG) and anti-social behaviour with difficult and emotionally charged sessions, before moving on to the evolution of places and AI’s role in that journey, where the mood was upbeat in embracing change through collaboration.
Gareth Jordan, ART’s Director, chaired a reflective session following AI presentations from Alex McCulloch, Director at CACI and Ross Powell, Technologies Director at JLL. The panel discussion delved into current approaches to insights and strategy through data and a grounded view on how that continues to evolve for both the full price and outlet sectors. It was important to debunk some myths surrounding AI to understand its capabilities and limitations for retail destinations. Aside from agreeing that AI is not about to replace our jobs, it could be said that jobs might be taken by people using AI! Seriously though, the consensus was to enhance roles, rather than replace them, with new technology, making tasks easier and decisions better and faster.
Alex Petit, Head of Data & Insights at Global Mutual, set the tone in answer to Gareth’s first question about the key components of active management. “We’ve spoken a lot about data, and data can be scary, but I wanted to make a point about active asset management and the success factor is you in the room.” Alex elaborated: “The last 12 months have seen a lot of activity from an investment perspective, and a recurring question I always get is around measuring the value of active asset management. This is where Retail Advantage is a valuable tool and other data pointers, which are really helping us to measure value. So understanding how a centre is performing, what’s happening from a turnover perspective, what sales coverage you get… so I think it’s a good way to introduce the subject – yes it’s about data, but it’s about you, because you are the ones producing the good work, and we are just here to measure it.”
The discussion moved on to the important KPIs when approaching Sales Performance insights and how data is being used on a daily basis to inform decisions. Glynn Edwards – Trading Director at Landsec, explained that while they use fairly traditional KPIs like sales, density, and things you would expect to see, Landsec has made good headway in the volume of data with AI, bringing better coverage. “But when you look at sales, one thing that has changed quite dramatically is what is included in that number. You look at the introduction of click & collect, digital sales in a physical store, and all of a sudden the success of a particular store is a lot more confusing. You may have a brand that does not make significant money from the store, yet they consider it a successful store, so you need to look at the value from a different perspective. That has been a fundamental change, so understanding the ‘halo effect’ through footfall monitoring and customer data is important.”
Alex answered next, “Just to add to that, it’s super important to understand what’s happening within the four walls, but it’s also very important to triangulate sales with catchment data – demographics, mobility and banking data. People who know me know I am the queen of bad analogies, so I’m sorry, but I am living up to my reputation. First, it is really important to understand what slice of the pie you have. In a cost-of-living crisis, the pie may have shrunk, so understanding that the slice of the pie isn’t growing is an opportunity to understand what really matters to you, your investors, or your shareholders. So it’s great to know what’s happening inside the box, but relating it to the catchment is really important to measure share of wallet evolution.”
Kenny Murray, General Manager at McArthurGlen Cheshire Oaks Designer Outlet and Regional Retail Lead for UK & Canada, brought in the evolution of how we treat data: “Cheshire Oaks Opened 29 years ago this month, and in the old days, the data we used to get from brands was very transactional. You take the sales data to calculate the rent, but I think because we are retailers, we are naturally curious, and we realised there was much more we could do with that data. And it wasn’t just about density and sales return; it was also about what the store commercial was like, what the units they were selling were, and what the average selling price was. What would we see happening in terms of average unit price – was it going up? Or was it going down? And also looking at things in terms of asset management, which Alex touched on, the importance of understanding the capture rate.” Kenny explained that this approach is fundamental to their relationships with brand partners, enabling them to understand and resolve any issues.
Gareth raised a question around regional comparisons and whether this was a useful performance metric. Kenny said, “I think that’s an interesting thing for us, and I think over the last few years, we’ve gotten much better at looking at things from a regional perspective. We’ve identified that the more we can work with a brand partner on the numbers, not just on one location of the business, but across multiple locations, brings a real big opportunity to drive performance overall.” McArthurGlen’s Friends and Family marketing campaign gave a good opportunity to share how they work with brands around KPIs on promotions so that they can understand how to maximise it together. “From day one, when any brand joins a McArthurGlen centre, it’s a partnership,” Kenny added.
Gareth asked Glynn for his take on regional comparisons and whether “local” brands are still having an impact for Landsec at the moment. Glynn explained that “in terms of geography, there is value in those comparisons, but we also have different destinations with plenty of very different guests. So you could compare them, you get some value, but generally, they are vastly different. So you actually find out more about how different they are. We look at our data using geography, end-use and a whole raft of other metrics. Local brands still absolutely have impact – and in many ways, they’re more important than ever. So many of our retail spaces in the UK now have such a similar lineup of brands driven by their global success and appeal. We all want the biggest Zara, we all want the biggest JD, we all want the biggest Next. Unfortunately, that leads to pretty homogeneous centres, so local brands can be the best way to differentiate and stand out from the crowd.”
Gareth touched on a conversation with host Darren Pearce during the break about security, facial recognition and monitoring, leading to the question of the day: “Are we seeing AI replace humans already?”
“Not replacing humans. But I think it is making us slicker in terms of the way that we operate,” said Kenny. He described the efficiencies made possible through innovation and the way that the outlet sector has transformed their deliveries of stock – dramatically reducing stockroom size thanks to the use of technology providing up-to-the-minute visibility on the stock movement.
Alex followed with another compelling example: “We are talking to an F&B operator, and the brand’s background is interesting because the founder used to be an analyst in the banking sector. We are helping him understand and predict the footfall pattern for the F&B unit he’s looking at. Given that he’s using all fresh ingredients, understanding how much to buy on which day or how much could be wasted makes a massive difference between a super profitable unit and just breaking even.”
Glynn also raised the increasing connection surrounding insights: “I think we probably share more data now than we ever have with brands – and with that, you get far more collaboration.”
Gareth moved on to a potentially divisive question about outlet vs full price, but no boxing gloves were required. Kenny commented, “I think it’s the detail at which the outlet sector works with brands is a big distinguishing difference… I think the full price market has followed for sure. You can definitely see that, but I think we’re still further ahead. And I think that ties into the question you asked about looking at things from a centre perspective or are we looking at things more regionally? If you look at McArthurGlen we are looking at things centrally, we are looking at things regionally and we’re also looking at things at a group level. Brand partners really want to work with us because they understand that we will help them maximise the potential within our centres. And I think that’s the part that outlet retailers need to continue to do, and you see full price working more in partnership with the brand partners, too – looking at how they deliver events and experiences that will drive footfall into the stores.”
Landsec has a mix of both outlet and full price, and Glynn gave his perspective next: “I think they’re probably more similar than they’ve ever been before; people could be in an outlet now and not necessarily realise it, the lines are being blurred, so people just want to shop brands and it does not necessarily matter.”
Alex agreed that they are getting closer and closer and raised the benefits of Global Mutual having full price and outlet destinations with the technologies that cover both. However, she raised one big difference in how valuers value outlets vs full price: “Full price is seeing more and more turnover rents, and if you think of churning tenants in an outlet, it is something that is viewed very positively because you can keep on growing your densities. Sadly, when it comes to shopping centres where most investors want longevity and a very stable income, having that churn means that valuers take a dimmer view of that. So the valuation system needs to evolve.”
Apart from the light-hearted questions Gareth finished on courtesy of AI using ChatGPT, Glynn ended with an interesting point comparing the last decade’s predictions around the death of bricks and mortar due to online shopping with fear surrounding job losses from AI. He quoted share of market statistics from an earlier presentation, explaining that the opposite has happened and that online sales have been going down for the last three to four years. “We will find a new balance between the two, but the reality is that we learn to adapt to it; we have brought it into our everyday lives, and the same will happen with AI,” concluded Glynn.
Whether you want to understand how to get more from the data you collect or learn more about how the industry is using AI-enabled tools to simply and quickly achieve connection and collaboration, let’s discuss.
Stay tuned for next year’s line-up for Retail Destination Live