Shopping Center Business

MAY 2017

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

Issue link: https://shoppingcenterbusiness.epubxp.com/i/817746

Contents of this Issue

Navigation

Page 248 of 334

BIG DATA 244 • SHOPPING CENTER BUSINESS • May 2017 ing process is consistent with the data. It's a big project. The second program has to do with our leasing and how we are looking at the tenant mix. The particular deals we are doing at our centers, from the economic and merchandising stand- points are analyzed. We are starting to test that as we get more information. SCB : What data are you collecting? What are you using to be smarter in your operations? EDISON : We do a lot of analysis on the demographics of a center. We use U.S. Census data. There's a very broad amount of information that we can get from that. Whether we are talking to a tenant about our market or whether we are looking at a project to buy, the demographics are the top driver in that decision process. That data is universally available, but how you look at the data is different. How you look at the data is most interesting relative to how big data can help direct us. How Phil- lips Edison looks at those demographics is different than how another shopping center owner will look at them. How we look at that data will also help determine the merchandising mix that we drive. We can model how a particular grocery store will perform in a market. In addition the demographic data, we also use sales data. When you buy an existing project, you in- herit a lot of sales data that can help you to understand how well the tenants are doing. Having owned shopping centers for 25 years, we have specific opinions about specific retailers and who they are marketing to. That helps us create an im- age of who the shopper is at that center. SCB : How does that help you know that you are finding those consumers and that your retailers are hitting their sales targets? EDISON : With our modeling, we have an idea of which retailers should be doing better and which retailers are exceeding their goals in certain environments. We look at how sales are trending and how retail leasing activity is. That data helps us track where we see the center moving. SCB : Are you also using data to help you find new retailers for your properties? EDISON : We look at our retail tenants as our partners. We need them to be suc- cessful. When we look at our markets and the trade areas, we want to make sure we match a retailer to the center so that both can be successful. We want to ideally drive more traffic to our centers. Data can help us determine which retailers do well to- gether. For the first time, we are beginning to track traffic at our centers. We have eight centers where we are actively moni- toring traffic patterns in the center, as well as traffic flows in and out of our centers. We hope to take that to all of our centers over time and use that data widely. Clear- ly, that information is proprietary, but we would have more information about sales and trends ahead of others because we could watch the number of shoppers going in and out of each of our stores. That could be a tremendously powerful tool if used correctly. SCB : Traffic counting has been around for a long time, but it has gotten more sophisticated. Can you tell us how you are implementing that? EDISON : It is really a cost issue. Traffic counters have come down in price now to a point where they are economical. When you have a 1.2 million-square-foot fortress mall, you have a different cost structure than a 120,000-square-foot grocery-an- chored center. The cost of the technol- ogy has gotten to the point that we can buy the hardware at a reasonable price and create the monitoring system for a reasonable cost. Computers now read data directly from the cameras, which has brought the cost of monitoring lower. We are at the early stages of this with only a few centers activated. I don't know how important this data will be until we get a little further down the line. My feeling is that if you look at your center as a single shopping environment, and you are trying to create the best possible environment for the shopper, understanding how that shopper is working in your center — what stores they are visiting and how often they are visiting them — will lead you to better decisions about merchandising mix. We do a lot of that the old school way today — owners have an opinion about how cer- tain retailers work together, but they have no data to back that up. SCB : Where did the idea come from with- in Phillips Edison to use big data to help your centers and operations? EDISON : Our growth has really driven us to this point. We had the choice of using the technology to improve our system or keep doing things the same old way and adding Old Alabama Square is a 103,000-square-foot center that Phillips Edison owns in Alpharetta, Georgia, anchored by The Fresh Market.

Articles in this issue

Archives of this issue

view archives of Shopping Center Business - MAY 2017