In the lead up to Christmas shopping centre landlords across Australia, and as far off as Norway, have started using a little known app designed by Brisbane business Norbit as their first line of defence in the battle against the rising power of online retailing.
The threat of Amazon and online retailing has taken a while to change traditional mall owners’s appreciation of shoppers, but with the Lowy family selling out of Westfield earlier this year, landlords are taking the threat more seriously and are now scrambling to adapt the latest technologies to ensure they keep hold of their retail customers.
Norbit managing director Gerry Mezzina has created an app which tracks shopper’s spending habits in a way that tips the power back into landlords hands.
“There is a lot of talk about Amazon. Everyone says Amazon has done so well because they are online, but really, they win because they know their customer – they have been tracking their customers since 1996 and the big landlords haven’t,” he said.
“I think the market – the shopping centre landlords – are a bit behind in terms of where the customers want to spend money.”
And tracking customers is exactly what the Norbit app does for landlords.
The shopping centre landlord pays to rent the white label app at a low cost and then gives the app its own name – such as that of the shopping centre. It then encourages shoppers to download it with the incentive of discounts and points. As the shoppers use the discounts and chase the points, they are tracked.
In most shopping centres these days landlords don’t get access to details about shoppers because such details (if any) are usually held by the shops – the retailers who rent from the landlords.
But with the app landlords get a rapid new source of information that helps them drive sales that can ultimately be reflected in higher turnover rent.
One of the first shopping centres to take up the app Capalaba Shopping Centre in Brisbane saw 20,000 downloads, using it for two-three minutes and opening it all the way through to midnight.
The app is now used in 20 shopping centres in Australia, one in the Philippines, one in Norway and one in South Africa. Another two shopping centres owned by global shopping mall giant QIC Global Real Estate have also taken up the app in the last fortnight. Shopping centres such as Pacific Fair on the Gold Coast – one of the top five in Australia – is trialling it.
“The target market is any shopping centre in the world not collecting such detailed tracking data,” Mr Mezzina said.
And that very detailed information includes the names, age and gender of people, their addresses, their contact details, their spending habits and what promotions attract them, when and where they open the app, where they have travelled and the list goes on.
“There is a stigma that aps don’t work, but unlike credit cards landlords can now get access to the data on spending.”
The points-based system is key. Shoppers can get five points just for showing up to the centre. As the points build up the app user gets more discounts, more give-aways, more encouragement to spend.
“The psychology of points is that it does change the way the brain works. We have had customers say that they will spend over if they get points,” Mr Mezzina said.
One of Mezzina’s early investors in the app is the family behind major real estate broker McVay Real Estate.
Sam McVay says the app will significantly change the way landlords compete.
“For the first time, shopping centre owners can now truly understand who their customers are,” Mr McVay said.
“This becomes a really powerful tool in everything from curating a tenancy mix through to how the Centre is marketed.”