Alexander Babbage » How Big Data Is Leaving Shopping Centers Holding All the Cards

How Big Data Is Leaving Shopping Centers Holding All the Cards

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Recently, we at Alexander Babbage have been reviewing ROI that shopping centers can reap when they invest in research. Today, we are looking at how shopping centers are using big data to increase their bargaining power.

For years now, retailers have used online sales, member programs and credit card transactions to build sophisticated customer files By combining that information with traditional trade areas, they can determine where their brick-and-mortar stores are going to thrive and make site selections decisions with a higher level of confidence.  It’s put developers at a disadvantage because they don’t have a traditional “customer’—a shopper file with key metrics including frequency of visits or dwell time.

With big data and tools like TruTrade™, developers have access to this information not only for their own shoppers but for their competitors’ centers, too. The ability to compare frequency, spend, and where the shoppers are actually coming from with competing developments allows the pendulum to swing back in the developers’ favor.

What we’re seeing today is that data is an arms race. Retailers have bulked up on customer data, which benefits developers most when there are limited new properties coming to market—something we all saw between 2010 and 2015. But with a lot more development and redevelopment in the marketplace right now, there is more gross leasable area (GLA) coming to market. The smart developers are the ones stocking up on their own arms—in this case, their own data analytics—to put themselves on a level playing field with retailers and to ensure that they are pricing their space correctly. This gets deals done and maximizes their return on investment—not just their investment in research, but their investment in the property as a whole.

Stop bluffing and invest in big data—your deal-making will be better for it.

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