Cases / Case 1
Global Real Estate Investment Manager Case
Sales growth from using the Mallsence by 30%
Hines is a leading global real estate investment manager. We own and operate $93.0 billion* of assets across property types.
The “problem” group of tenants missed high-demand items, resulting in fewer transactions and lower revenue. The insight was surprising, because the primary analysis showed the similar level of all the metrics: conversion rate, capture rate, avg check, units per transaction, which made us think that could be a reason for different performance of same chain stores in two malls.
Problem
Few months ago, a leading European shopping centre developer with five malls and 600,000 sqm under management asked us to help them understand why some tenants of one retail chain had similar performance in two shopping centres, and some of the same-chain tenants performed twice as bad in one location compared to another. With Focus systems, the developer automatically collects tenants’ sales from POS machines and customer movements data inside the malls.
So, the case under research refers to two shopping centres located in one city in different districts: Blue Mall and Orange Mall (names used for illustration purposes). Orange Mall brings less tenant revenues compared to Blue Mall. On the other hand, Blue Mall has higher traffic compared to Orange Mall. Stores operated by the same retail chains in both malls have been analyzed. Some tenants experienced a similar difference (as shopping centres) in sales volume. Some tenants managed to get comparable sales in both malls despite the difference in traffic.
The reason for poor performance for some tenant groups seemed obvious, but why did other groups perform similarly in both malls despite lower traffic in one of the malls?
So, the case under research refers to two shopping centres located in one city in different districts: Blue Mall and Orange Mall (names used for illustration purposes). Orange Mall brings less tenant revenues compared to Blue Mall. On the other hand, Blue Mall has higher traffic compared to Orange Mall. Stores operated by the same retail chains in both malls have been analyzed. Some tenants experienced a similar difference (as shopping centres) in sales volume. Some tenants managed to get comparable sales in both malls despite the difference in traffic.
The reason for poor performance for some tenant groups seemed obvious, but why did other groups perform similarly in both malls despite lower traffic in one of the malls?
Solution
Believing the reason is outside the store (low traffic in the mall), considering no options other than to cut costs in the store, reduce shopper attention and make customers never return. As a result, traffic diminishes instead of rising and the store manager ends up with closing this location.
Result
Data is the new oil; sales data is the pulse of the shopping centre. At a time when tenants are careful about transferring sales data to shopping centres, I would like to share the real case of how both retail and shopping centres did benefit from sales data sharing with malls.
