StoriesBlogBest practicesWhy your shopping center is not succeeding with customer data - And what to do about it

Why your shopping center is not succeeding with customer data - And what to do about it

November 23, 2022

Customer data has become a buzzword in the shopping center industry – but what exactly is it, what can it do for shopping centers and are they focusing on the right kind?

In this blog post, we have a look at customer data, its importance and the consequences of not having it.

What types of customer data are there

Customer data can generally be divided into 3 different types:

Type 1 – The What

The first type of data revolves around what happens in the shopping center, namely simple continuous metrics like footfall and sales results. This is data collected by having people counters, as well as the revenue in the shops.

This type of data does not tell you anything about who visits or why they visit.

Type 2 – The Who

The second type of data is the static customer data. Static customer data gives you access to static information about customers, such as name and address. Data like this is typically collected through avenues such as emails. Another way to collect static customer data is the popular annual customer survey. This type of survey provides the shopping center with an insight into customer behavior at that moment and is usually carried out by a third party once a year.

This data does not give you an on-going, continuous look into how and why these people act.

Type 3 – The Why

The third type of data focuses on continuous customer behavior. This can be how often a shopper visits the mall, what their favorite shop is, etc.

The differences between this data and the annual surveys is that it is continuous, meaning it is measured every single time the shopper interacts, rather than once a year. And it isn’t colored to the same extent as answers in a customer survey is.

Shopping centers’ relationship with customer data

All customer data is equal, but some types are more equal than others.

Shopping centers generally place a lot of focus on the two first types of data. This means they have a general sense of what happens in the shopping centers in terms of footfall and sales, and an idea of what areas their customers come from and who they are.

They do however not have a real grasp of why.

This focus is natural as these are, objectively speaking, the easiest types of data to access. And, while this amount (and types) of data has worked fine for a long while, times are changing.

Customer behavior and demands are ever-evolving and the competition is growing stronger by the minute. To keep up, shopping centers need to start placing focus on collecting data on continuous customer behavior.

While shopping centers' insights into their customers is an annual circle rebooting every year when the survey is made, Ecommerce is continually developing

The consequences of not having the right type of customer data

The perfect cocktail

The rise of Ecommerce has lit a fire under the changes in the retail industry's approach to customer data.

Ecommerce (unlike physical retail) has the disadvantage of not being able to physically interact with their customers. This had created an immediate urgency to collect customer data.

As online businesses are per definition online, collecting data is very accessible to them.

This has created the perfect cocktail for Ecommerce to go all in on using data to getting to know and understand their customers, in order to continually optimize their efforts.

Misconceptions and bias

Unlike ecommerce, shopping centers are able to physically see the customers visiting them. Which means the focus on getting to know customers and understanding their behavior has been relatively limited.

But what about the annual surveys?

The annual surveys can be an important tool, but as they are derived from questioning customers rather than monitoring behavior, they are subject to some level of bias and misconceptions.

Secondly, they’re typically only made once or twice a year. Try to think about it this way – if you had a friend, which you only talked to once a year, would you feel like you had good insights into them for the remainder of the time? Would you feel like you truly knew them?

Considering how quickly consumer behavior is known to change, the long period of time between surveys is an issue. This makes it incredibly difficult to continually act on customer behavior and demands and know, whether ones efforts actually make an impact.

The buying journey starts online

Today’s buying journey has been proved to be starting online.

When customers decide to visit the shopping center this is usually due to already having made that decision after having researched online.

So what does this have to do with customer data?

Well, it means that if shopping centers want to fully understand the customer journey and know what lead the customer to step foot inside their doors, they need to be a part of the journey online to. By having a digital owned media, such as an app, which customers can use before, during and after their visit, it is possible to get much clearer insights into the customer journey through behavioral data.

When you know why customers do what they do, and what exactly it is they like, you have much better options to cater to this, whether that be in terms of continually optimizing marketing efforts or tenant mix.

Acquiring customer data

We’ve established the importance of behavioral data. But, how do you (ethically) acquire it and get it to a stage where it’s possible to derive meaning from it?

Unfiltered data

Customer data is, in and of itself, useless to most people in its unfiltered state. It is simply too confusing and expansive.

It is therefore necessary to set up in a manageable way, such as data dashboards.

Only issue is that doing so is not only incredibly time consuming, it is also difficult. Because, you can collect and create dashboards on a million different things – but what data is actually going to be useful when it comes to understanding and influencing customer behavior? And how do you set it up in a way which is understandable?

Figuring all this out is an artform (and full-time job).

Example: Customer Data Dashboard

Customer data is shady… right?

It certainly has a bad rep. But, it doesn’t have to be that way.

Modern customers know you want their data. In the instance of a loyalty program, they are choosing to trade their data for perks and rewards. The key to it being a fair transaction is for you to be completely transparent towards your customers about what data you collect and what it is used for, which is improving their shopping experiences.

While customer data collection might have been the wild west in the past, important strides are being made to ensure personal data privacy and protection, the most famous being the European GDPR. Keeping up with, and making sure the way you collect data is compliant to data privacy laws is a big task - there is no way around this. What you can do, however is align yourself with a supplier who’s been through the mill before in terms of working with shopping centers who have to live up to these rules and regulations.

Where does this leave shopping centers?

Now, we’ve had a look at customer data as a whole and uncovered why behavioral data is detrimental to keeping up with customer behavior and the industry.

The reason why shopping centers haven’t focused on behavioral data is clear:

From creating a platform to collect it, to making sure it’s legal and deriving meaning from it, it is simply too big a task.

So, what then? Is that just too bad? Should Ecommerce be the only ones who can use behavioral data to understand and influence customers? Should shopping centers just give up in a race they’re not equipped to participate in?

Of course not.

Behavioral data is becoming increasingly important by the minute and shopping centers cannot afford to opt out of the game. What they can do is look into platforms which can help them.

By choosing a loyalty platform, like a shopping center app, which collects customer data, shopping centers can gain insights to their customer before, during and after their shopping trip. With it, they can not only learn about their customers, but also use that knowledge when communicating to customers both in the loyalty app and on other marketing channels, in order to directly influence wanted behavior.

Interested in learning more about the possibilities of loyalty apps for shopping centers?

Read our blog post on the differences between custom developed and SaaS apps shopping centers need to be aware of.

Or explore how 3 different shopping centers are succeeding with loyalty apps.

Prefer to talk? Then book your demo now.

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