The growth of e-commerce has steadily eroded the popularity of high street retail outlets since the turn of the millennium. In the US, many out of town shopping malls lie unoccupied and iconic brand Sears is in trouble. Wall Street analysts have cut profit forecasts for dozens of US retailers, and Forbes reports that the CEO turnover rate in the region has hit a record high. In the UK, the picture isn’t any better. This year for example, Sports Direct bought House of Fraser out of administration, John Lewis saw its profits fall 99% and Debenhams has had to deny insolvency plans following a number of store closures.
The more agile operators are responding to such structural change by repurposing retail spaces, so that they remain relevant to contemporary needs. The Marlands Shopping Centre in Southampton, for instance, is repurposing 12,500 square foot of its second floor into a co-working space, in an attempt to attract businesses from the city’s growing digital technology industry worth £2.1 billion.
In this climate, heads of facilities management and executives thinking through the capital plans in the retail sector are under increasing pressure to allocate resources more effectively. Executives are looking to software as a means of doing this. In the infographic below for example, 37% of our global survey respondents in the retail and consumer goods sectors said they are either trialling or evaluating an Integrated Workplace Management System (IWMS) solution during 2018 and 2019. What explains this level of interest? IWMS software offers users the chance to centralize information on energy, leases, space, equipment, maintenance and capital project planning across a portfolio of stores of varying sizes.
There are also new areas of innovation that tech-savvy retail directors should consider. Tango, for instance, helps to optimize the selection of new sites for retail outlets by analysing population catchment areas, and can leverage GPS signals of smartphones to provide real estate decision-makers with insight into consumer behaviour that could inform site selection decisions. Nemetschek Group’s acquisition of MCS Solutions joins up an AEC firm, focusing on site development and construction, with an IWMS and IoT solutions vendor that can optimize facilities management during the in-use phase of retail outlets. In a similar fashion the Trimble group provides multiple solutions that work across the whole real estate lifecycle. Others such as Accruent bring in 24/7 monitoring of assets to improve availability, performance and reduce lifecycle costs, which is an intensive but high value proposition.
In a market that is flat or declining, every decision carries a lot more weight as the bad ones will exacerbate an already declining trend, while the good ones will help you stay in the game. Bringing the relevant data and analysis together via real estate software therefore offers huge value to retailers.