Five Ways The Internet Of Things Is Helping Brick & Mortar Retail
The Internet of Things, in particular search technology, appears to be actually helping brick and mortar retailers and investors in many ways. According to Wikipedia, “the Internet of Things (IoT) is the inter-networking of physical devices, vehicles (also referred to as “connected devices” and “smart devices”), buildings, and other items embedded with electronics, software, sensors, actuators, and network connectivity which enable these objects to collect and exchange data”. Therefore, if it has a sensor on it- cars, engines, wearable devices, and more- then these things can collect and exchange data, and this data is helping retailers to improve their productivity, enhance brand awareness and enhance the customer experience, which ultimately drives traffic back to their stores.
Below are five factors at play when the Internet and search technology are used to attract customers and locate retail investment opportunities.
- Enticing Buyers to Shop
The Internet is making marketing for advertisers more effective and efficient. Marketing messages are everywhere now, like on our phones, on Instagram, in elevators, on our watches, and more. There is a constant barrage of motivation to shop; however marketers who embrace the Internet can dynamically engage the customer, predict their shopping behavior, and personalize their experience. That is what encourages the consumer to spend, and these trends are unlikely to switch direction in the short term, which is great for retail investors and retailers.
- Making it More Attractive to Shop
We’ve developed markedly shorter attention spans and levels of patience. We want to spend on things that can deliver instant gratification fast. Home delivery of just about everything, along with smart home devices, allows instant shopping at any time and increases the likelihood a shopper will buy on impulse. This convenience is what customers seek and retailers who use technology to sell their products will be more successful at driving their customers to do business with them online or in the store.
- Making Physical Locations More Profitable
Some retailers have taken steps to optimize their business operations and their real estate. Those that have chosen to shrink their footprints have witnessed how their remaining physical stores are now far more profitable. Each location has more revenue potential, coverage area, and capacity for serving customers. Many have been repositioned or multi-purposed as distribution centers and showrooms. We now have Amazon lockers, which can deliver items closer to consumers on-demand. Tesla is famous for its showrooms, while keeping customers ordering online. Wal-Mart has begun offering discounts for in store pickup. Starbucks have the option of check and reloading Starbucks card balance through their phone. Customers can also update their profiles, view their earn rewards, and use their reward card to make a purchase.
Accordingly, e-commerce is not the death of brick and mortar, as some will lead you to believe. Optimizing business operations and real estate means that retailers can carry a reduce amount of inventory and work with less staffing and square footage, while serving a larger number of customers. Investors who understand this trend will find many great opportunities to invest in prime retail properties.
- Ease of Investment
On the other end of the equation, the Internet has been making it far easier for investors to invest in great retail properties. For example, in addition to the increase of information about retail sales, market share, brand recognition, and their customer reach, there is also very useful data available for the retail real estate investor. This data can include recent sales transactions near the retail property, traffic flow data of vehicular and foot traffic, population demographics, household incomes and spending patterns, etc.
The Internet has been a driver of localizing the statistics needed to compare investment options and exploit opportunities, and for the retail investor who understand the value of combining and integrating e-commerce and the in-store experience, the more valuable the retail investment becomes for them.
- Efficiency in Property Management
New technology is improving the efficiency of a property manager and empowering associates to use digital tools to improve productivity. As a manager with vacancy, there are many touch points for your target customer and you can use online tools to build a 360-degree view of your target customers, then advertise directly to them. The economic value of that the click of a search button enables improved productivity, more transparency in the marketplace, the discovery of new information, and the ability to connect with the right clients. Such benefits are usually attributed to the Internet. But search technologies are a vital cornerstone of the Internet structure. These tools help to avoid waste, keep timelines tighter, and boost bottom line performance. That all bolsters net returns, and enhance the sustainability of retail investments.
Online search technology is barely 20 years old, yet it has profoundly changed how we behave and get things done at work, at home, and increasingly while on the go. It empowers people and organizations in every corner of the world. Brick and mortar retailers become more profitable when they embrace search technology and leverage these technologies to help their businesses to grow. Savvy retail property investors who understand the needs of their retail tenants, are in a unique position to take advantage of the opportunity.