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Smartphones, smarter leasing: How mobile data is reshaping retail

Through their smartphones, shoppers can let retailers know what products they want and where they want them—often without even realizing it.

The small, black boxes hiding in pockets and purses across the country serve as 21st-century window displays, catalogs and customer service desks for the world’s retailers. But, with the help of apps that quietly compile data about where users live, work and shop, traffic on this information superhighway flows in both directions.

“Today, this little gadget that we all hold in our hands,” Jedd Nero, head of Avison Young’s New York retail services team, said, flashing a black smartphone, “is the golden key to the consumer and the consumer, today, rules.”

Smartphones are used in various ways to optimize businesses and tailor them to customer preferences but the latest advancement is the use of mass mobile data to develop leasing strategies.

For years, real estate advisory firms have dealt in the art of location selection, gathering up census demographic data, sales reports and psychographic analysis to mock up community profiles and sketch rough commerce zones. Mass mobile data cuts out the guesswork and makes it more of a science.

“We’re taking the objectivity out of data,” Andrew Poncher, a vice president in CBRE’s retail division, said. “We’re creating accurate trade areas using data that is as recent as a handful of days ago that tells us where potential customers are coming from, where they’re going and the types of stores they like to visit.”

Smartphones and other GPS-capable devices beam out steady streams of location information, either by pinging service towers or by exchanging transmissions with satellites. Most service contracts and app downloads include allowances for companies to collect this data along with basic, non-identifying personal information, such as user ages and genders.

Third parties aggregate this information, parse then license it to companies such as CBRE, which incorporated it into its location services platform, Dimension, late last year.

On its own, the data is of little use, Poncher said, but plugged into Dimension, with its mapping system and catalog of information about population density, average income, household breakdowns and more, it can be used to understand the workings of actual trade zones instead of mere approximations.

“The trade area, the real one, not the imaginary one that we used to draw based on driving radius, is usually a little different than you’d think,” Poncher said. “From my experience so far, it’s larger than you’d expect.”

Jones Lang LaSalle also added mobile data to its retail operation at the end of last year, launching a similar program called PinPoint, which captures mobile data through a process called geofencing. Essentially, JLL can draw a digital outline around a city, neighborhood, street, building or even a specific store within a shopping center and get information about all who pass through it.

“The exciting thing about a geofence is you can put it on anything,” Ashlyn Booth, head of JLL’s retail property marketing team, said. “The reality is we’re being geofenced everywhere we go without even realizing it.”

Like CBRE, JLL’s data—which comes from the research firm Alexander Babbage—is anonymized to remove personally identifying information. From a real estate perspective, Booth said it’s more useful to understand how and why large groups act than it is to know details about specific individuals.

“What we get is that there is a male who lives in this block who has come to your property six times this month and his average visit is 25 minutes,” she said. “As a marketer, it’s an incredible tool for understanding how groups of people behave.”

JLL has used PinPoint to help more than a dozen retail clients, Booth said, and the company is exploring opportunities for applications in the healthcare, hospitality and capital investments arenas as well.

However, while some real estate advisors view mass mobile data collection as a paradigm-shifting advancement in the world of retail strategy, others such as Branson Edwards, head of retail operator services at Newmark Knight Frank, have not fully embraced the technology.

Edwards, who opens more than 1 million s/f of new retail space a year, has worked with cellular data in the past, specifically information about service tower use. Though it can be an effective way to gauge traffic, he said it only provides a surface-level reading.

As far as new technology goes, Edwards is more interested in the use of cameras and in-store sensors to monitor the emotional responses stores and products elicit from passersby.

“Retail is about human interaction and what we want to consume,” Edwards said. “It’s a hell of a lot deeper than any set of data that could be the smoking gun or the brass ring in terms of making decisions. Mobile phone data is two or three steps removed from the actual interaction, the actual conversation.”

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