Thinking about what is important to our shoppers, I recall a column written by Bernard Salt, columnist for The Australian, recounting a story of McDonald’s opening in a small town on the England-Scotland border. It was a big deal at the time, because it was a town where nothing-much ever really happened. Six months after the McDonald’s opened, there was a conspicuous spike in complaints about service at the local post-office. What McDonald’s had introduced to this small town, was to raise the bar in terms of service expectations. It was a clear-cut example of what has made McDonald’s such a global success, not only in fast-food, but as a business behemoth. The company capitalised on its founding view, that the most important thing to the modern household is time.
Never before have we lived in a world where nearly anything we desire is available at the click of a button, nor have we ever felt so time poor. Digital advancements have made it easier to save time, but as a commodity, time has never been more scarce. Think Uber, Facebook, Spotify, internet banking… Why fumble around for cash, schedule time to call friends, buy CDs or visit the branch when you have the above? Customers have benefited from these disruptors which has resulted in a convenience revolution. The demand for convenience has created a market in which online businesses can thrive by offering immediacy across a broad range of products and services.
Despite all of that, customers are also craving connection and respite more than ever. Recently, GPT conducted research which confirmed customers are looking for a place where they can achieve a sense of wellness and community; a place where they can come and shop for necessity and pleasure, to dine out, to socialise or to exercise in a vibrant social space for which they have an affinity.
Looking at these developments as a shopping centre owner, GPT knows it is facing a dynamic future. It is a statement of the obvious that retail is currently in a period of transformation. But at the same time, the changes that have been disrupting retail also present enormous opportunities. Retail sales last November recorded exceptional growth mainly driven by the events of ‘Black Friday’ and ‘Cyber Monday’, both phenomena started online and then naturally extended into bricks and mortar stores. The digital technologies which are being employed to lure customers online, can also be used to attract, connect, and keep those customers coming to our shopping centres.
GPT is embracing advancements in digital technology by using artificial intelligence to assist with our decision making. We use AI and data analytics to dive into our customers’ consciousness to learn their shopping preferences and behaviours, which further allows us to create the optimal shopping outcome. It is a constant and persistent process, but GPT knows that the same digital technology that is changing retail behaviour can also be used to improve the experience for shoppers at our centres.
By using data we can be agile when it comes to the operation of our centres. No longer is it a ‘one size fits all’ approach to retail. Part of this is mapping and tracking our customers’ “pain points”, enabling us to convert this in to a positive experience. We have used data analytics to revise trading hours, address and remove customer friction, and employ targeted marketing campaigns directly linking insight to behaviour. The key for shopping centre managers and retailers today is to be agile, flexible and quick to market.
The desire for convenience has been a big driver of shoppers going online, but we have used insight to exploit a weakness of online shopping, being the consumer’s inability to quickly return a purchase. At Melbourne Central we developed a campaign that allowed customers to return any online purchase during the busy Christmas period. Customers were able to exchange their unsuccessful online purchases for a Melbourne Central Gift Card preloaded with cash. This attracted customers to the centre, promoted conversion and capitalised on the frustration that can come with online shopping.
Another initiative of ours has been to define and categorise the shoppers within our trade areas in to 16 consumer groups. We then classified the three most important groups which represent approximately 75 per cent of each centres’ customers. These shoppers are the voice of our most valuable customers and they communicate to us amongst other things, the way in which they like to park, enter a centre, walk through a centre and enjoy our amenities (or not). Their voices enable us to amplify and replicate what’s great and amend or remove what’s not.
Although there is a “data” focus to how we re-invest in our centres, we also employ good old-fashioned retail common sense to align our product with consumer behaviour. It would be futile to invest in analysing data if we are not prepared to invest in the asset and evolve the retail offering so that it remains relevant. We place importance on first to market retailers aligned to the needs of our customers and creating places and experiences that inspire and excite people.
For this reason we are continuing to invest in our assets. We understand what the customer is telling us, however, we also try to decipher what customers’ think they want and deliver an experience that exceeds their expectations. Investment focus on elements of modernisation, experiential outcomes, art, technology, landscaping and light. The elements of surprise and delight are fundamental as we evolve the design and development of our precincts.
At Melbourne Central, we have invested approximately $70 million, and another $65 million at Highpoint to further evolve our offering to create inspiring places for our retailers and shoppers. Last year we were excited to launch two new dining precincts at Charlestown Square and Melbourne Central, which capitalised on underutilised and underperforming sections of the respective centres. Amalgamating a host of local and hero food and beverage operators, the precincts reflect the unique food culture within their respective trade areas, with both trading strongly since opening. Using a mix of traditional and non-traditional research methods to capture a wide range of customer demographics, we were able to confidently invest in bespoke and localised offers from both a retail and ambience perspective.
Looking ahead, we are very excited about the upcoming developments at Melbourne Central and Rouse Hill. At Melbourne Central, GPT is well progressed with planning the addition of two retail levels as part of a $250 million mixed use development, that will include a 7,000 square metre retail, dining and entertainment precinct, and a new 20,000 square metre office building known as the FRAME. In line with GPT’s commitment to target a carbon neutral portfolio by 2030, this project is at the forefront of environmental sustainability, targeting a minimum 5 Star NABERS Energy and Water rating, and a 6 Star Green Star rating. In addition, the building is designed to achieve a WELL Gold Standard rating, a global measure of health and wellbeing in buildings.
At our Rouse Hill Town Centre, we are building upon one of Australia’s best examples of mixed-use developments where we will be delivering a $200 million redevelopment including 20,000sqm of retail and commercial space, integrated residential and a world class town-centre starting this year. With the introduction of leading public amenity, a higher proportion of mixed-use and an enhanced retail offering anchored by an iconic collection of first-to-market brands, the reinvestment is a great example of how we are responding proactively to the spending behaviour of the Rouse Hill customer.
GPT’s objective is to have the highest possible quality portfolio, which we define as having the best assets in strong growing markets. We don’t have the largest retail portfolio in the country, but we do have the retail portfolio with the highest sales productivity in the country. We will continue to focus on being better equipped to deliver greater convenience for the modern customer and removing the pain points that some customers didn’t even know they had.