Shopping centres will use enriched data to increase the shopping experience

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Jacob Elkjær

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Interview with Finn Sture Madsen, Chief Operations Officer at “Danske Shoppingcentre”

Finn Sture Madsen is Chief Operations Officer at “Danske Shoppingcentre”, where he is responsible for the operation and development of 17 shopping centres in Denmark. On 1st October 2020, “Danske Shoppingcentre” insourced a long list of functions and employees, that up until that point had been managed by DEAS. This was done in order to create even better shopping experiences, as well as better results for customers and tenants.

In your department, you operate, develop and market shopping centres. How has your business model developed?

“We are on a journey, and we started with a focus on renting out rooms. We have historically used physical space, location and turnover per square metre as the measure of how much a shop has to pay in fixed rent. The next step on our journey is to focus more on the fact that what we actually sell is the customer traffic to the shops, and then it is the shop’s job to convert that traffic into turnover through its various sales channels, be that online or physical.”

Is there another step on this journey?

“There is. Physical retail has changed drastically over the last few years, because omni-channel strategies are gaining ground. Customers can shop in the shop, on the bus, from home, and anywhere in between. It is all melting together. That is why it is all about developing an even sharper vision of what we need to deliver in a shopping centre. What should the overall shopping experience be like for those visitors that choose our particular shopping centre? In order for us to answer that question, we have to know more about the customers we deliver to the shops. What are their personal preferences? Which shops do they visit? How many times do they visit them? Have they been there before? Once we know those things, we can work with the shops and also become even better at interacting with customers. This is the strategic change we are facing right now, and the primary driver is understanding our data.

Does your business strategy raise any new security and privacy issues?

“It most certainly does. We follow the GDPR guidelines, but we also have to constantly govern based on ethical standards for data, so we don’t lose sight of reality and put business opportunities above customer safety. That cannot and will not happen. There is also no need for us to know exactly who visits us. We will be anonymising our data so that it’s impossible to use it to identify a person. But we would like to know certain things about our customers such as their gender, age, where they come from, and if they are a returning customer.”

Where is the primary gain for shops when you roll out an extensive data analysis of a shopping centre?

“It gives us better tools to service them. If, based on data analyses and customer flows, we know how customers move around in our shopping centres, then we can also place our shops in the most suitable locations where their preferred customer segment will have the best opportunity to visit them. A shopping centre is, in many ways, a cross-section of Denmark. Many different people are represented. But it is not all customers that are equally relevant to all shops. The art is to place each shop in just the right location.”

That was the shop angle. What do the customers gain from it?

“Hopefully, a more personalised shopping experience. It might start when you pull into the underground car park and receive a welcome message, which then guides you to an available parking space and perhaps offers you a free cup of coffee. Then you might, for example, receive information about offers on headsets this week at the electronics store you usually visit. Or something like that. The interaction we want to have with customers in the physical world is based on the same technologies that we all know from the online universe and that customers have learned to appreciate.”

How do you find the balance, so that you strike the right note with the Danish public and our perception of good service?

“I think it is important that the interaction and the new opportunities are not introduced all of a sudden, and that there is a clear consent from the customer. But if we show people that we can use their data to provide them with an experience they just cannot have elsewhere, I think a lot more people will take well to it.”

How highly do you prioritise the use of data?

“Very highly. As an industry, physical retail is behind on the use of data. Everyone asks themselves what our justification is in a world that has become more and more digital. I do not doubt that we have a justification. But we have to be extremely smart if we want to avoid becoming superfluous. If, within a few years, we don’t have data insight into the customers that visit a shopping centre, no shops will want to lease space there. It will become just as important as being able to offer water, heating and light. It is indisputable that there will be fewer physical shops in the future. The question will be where the remaining shops want to be located. I think that they will want to be in places that can provide them with the best customer insight and as such the right customer flow for their shop.”

You’ve only just started your data journey. But you have already gained important experience, haven’t you?

“I can definitely conclude that, once you get started, the list of things on which you’d like to retrieve data just keeps growing. With that in mind, it has been important for me to remind people that we also have to be able to use the data we produce. We always have to know how we want to use any data we retrieve and how we want to make said data available to decision-makers. It has to be practically usable. Otherwise it has no value whatsoever.”

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