We speak to Outlet Evolution, clients of ART’s Retail Advantage platform, to discuss ready to apply analytics and how innovation has proved an essential partner for growth.

Outlet Evolution Services is a specialised company in the Outlet Sector, managing and leasing over five different outlet centres in the Central European Region. By relying on a network of preferred partners, be it advertising agencies or innovative service products like Retail Advantage, Managing Partner Sebastian Sommer shares their strategy of keeping the costs of centre management as low as possible in order not to burden tenants excessively but also not to reduce returns for investors.

“We value partnerships driven by mutual goals, this applies both to investors and our brand partners alike. All growth is targeted to be sustainable reflecting profit targets from all stakeholders. While this may sound academic, it’s actually very specific. From mutual business plans to ready to apply analytics and a very flexible commercial marketing approach, we have gradually evolved our management style over the last years.”

Outlet Evolution Services Managing Partner, Sebastian Sommer

ART Software Group Director, Gareth Jordan has a firsthand view of how the right technology partners can help transform retail spaces and create true destinations. Retail Advantage meets operators’ needs with the data environment and insights to achieve their strategy. Many sites, locations and schemes vary in size, explains Gareth – it might be an inner city space with less than ten shops, where it is about nurturing what is there through a very hands on approach combined with real-time feedback and visibility on what is or isn’t working. Or, the objective might be to increase the  size of the offering, so the analytics need to show you if the brand mix is working and will remain compelling as you scale.

“Retail Advantage is a tool to garner growth on many levels, whether the objective is to grow in quality, in size and breadth, or maintain a relevant offering. We must all be proactive in fast-changing retail places, so data and analytics are central to that. The product grows with the scheme, which makes it exciting as our platforms are flexible and scalable.”

ART Software Group Director, Gareth Jordan

“Reliability and commitment are key to our business. We build and select our partners based on their attitude to our business and the cutting edge it can bring to us. This is exactly how we teamed up with Retail Advantage,” says Sebastian. Elaborating on their work with Outlet Evolution, Gareth discusses how Retail Advantage is being used at the destinations. ”It is always exciting to be a part of these sorts of projects where we are involved from the early stages to help provide visibility and answer questions on what is working. Outlets have long been an important element in retail but you need a strong and very specific strategy. At Hanse Outlets and Fashion Outlet Marl this has been approached in the best way.” 

“Seeing, breathing, and working with a retail mindset is the key for any successful outlet center management. With plenty of years in the retail sector, our team provides such know-how, but only with a flexible technology tool kit that provides quick but granular information, the real impact on the business can be brought to life.”

Outlet Evolution Services Managing Partner, Sebastian Sommer

Hanse Outlets is a perfect example of Retail reinventing itself. From an old retail park with local, convenience driven offers and DIY stores, the area has seen a constant investment and development over the last 6 years. With a total of 13.000sqm GLA and over 45 brands, the outlet has been opening its major Phase II Extension throughout 2023. “By the end of 2023 over 2.3m guests have visited the outlet center, fueling substantial growth with our brand partners and having delivered the best commercial year ever.”

While Fashion Outlet Marl opened right in the first wave of the pandemic, it has yet to realise the traction the outstanding location will achieve. “Its inner-city location connected to a shopping center with over 5m visitors p.a. offers the best of both worlds, convenience shoppers looking for a bargain and day-out travellers enjoying the offers, particularly on Fridays and weekends. Due to intense retail and marketing management, Footfall and Sales have grown 30% like for like since 2022, and we expect that momentum to continue,” explains Sebastian.

Fashion Outlet Marl’s current footprint of 25 stores will see a major development of over 30m€ over the coming 1-2 years, bringing the outlet centre to over 50 stores and making this a true outlet destination within Germany’s most populated region. With a total of over 15.000sqm GLA this outlet can grow up to 80 stores in the near future. 

“Understanding and touching the customer journey while building rapport and loyalty through this has been top of mind for every operator in recent years,” Sebastian explains. There is hardly unlimited growth in Footfall as consumers have plenty of choice; therefore, more than ever before, it is about creating true destinations. “It’s a people business, and by continuing to create memorable moments for our guests, we can’t wait to keep on growing. It is obvious that business decisions should consider a data driven layer of information. Not that data takes decision on its own, but it serves as a value advisor.”

Gareth agrees with this and remarks about the essential shift from descriptive insights to more advanced connected retail intelligence. “Experience and expertise will always be the drivers of success. Then it becomes a question of the clarity that the supporting information provides. Getting closest to the moment with the latest data possible; being able to see what the trajectory is now … Engaging Retail Destinations require a  level of data-driven analysis that reveals a broader picture to operators so they can take their next steps with confidence. As Sebastian says, it’s a people business, so whilst we are understandably excited about the uptake of opportunities from AI and Machine Learning, our clients’ experience and human objectives will always be at the root of our tools. As they grow, so do we.”

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Images courtesy of our client Outlet Evoltuion Services

Glynn Edwards, Trading Director at Landsec & Gareth Jordan, ART Software Group Director

Retail expertise

Gareth Jordan: Can you give a bit of background to your retail experience and how that led to your current role and expertise at Landsec?

Glynn Edwards: So my retail journey has always been primarily grounded in fashion retail with the bulk of it at Ted Baker. The last role I had there before moving over to Landsec 3 years ago was Head of UK Retail where I oversaw the people and operations of around 150 stores, concessions and outlets. Throughout that time I was able to work with a whole variety of different landlords and shopping centre operators across the UK and always had a really exceptional experience with Landsec over some of the other operators. So when I’d decided to branch out away from direct retail operations, Landsec stood out as being a great place to look. I was fortunate that just as I started to look for new roles a Business Development Manager position was created for our full price assets which I was pleased to get. From there the role evolved and now I head up our Trading Team which focuses on the collation of portfolio-wide sales and footfall, which we report on and analyse in order to drive commercial and strategic decisions. This is fundamental in driving one of our key performance indicators which is ‘Data Driven Decision Making’.

Gareth: Do you feel we are seeing a more blended mix between retail and property? 

Glynn: I would say so. One of our key pillars at Landsec is customer centricity and we’ve certainly been able to live this by bringing in a wealth of retail expertise to our teams. In doing so we’ve been able to break down some of the more traditional landlord and tenant challenges and have a much more collaborative approach. More and more now we’re seeing experts in both fields drift between the two disciplines which can only be a good thing.

Gareth: How does technology play a part in your role and communications?

“It’s a huge part of what we do, not just in my team, but as a business as a whole. Specific to my team Retail Advantage is an incredibly important tool, as we use it for the collection of sales data from thousands of brand partners.”

Glynn Edwards, Trading Director at Landsec. Retail Destination Data & Technology Issue 2024

Glynn: Likewise, we use it in many centres as a communication channel although this is often complemented in other ways. In terms of how we present our data internally we’ve been expanding into Microsoft PowerBI, creating a whole raft of dashboards to give our teams access to data that they’d have not thought possible a few years ago. All of this is helping in our ambition to become a more modern digital business.

Retail analytics

Gareth: As you say Landsec uses Retail Advantage to collect and connect sales data. Can you share any examples of how analytics gathered through the tools support you, your brands changing needs and the leasing strategy? 

“I would say one of the key ways in which we’re using this data at the moment is in pursuing a leasing strategy of ‘Fewer, Bigger, Better’. The sales density information we have available allows us to see brands who do not have enough space to fully express their brand or capture the full sales potential of the centre. We’ve been able to work with a whole variety of brands in the last few years to dramatically increase their store size in targeted environments where we have a high degree of confidence that they can increase their sales and ultimately their profitability. Away from just the data, we’re able to leverage our strong customer relationships to understand when a brand maybe doesn’t have sales density as a priority. We have examples in many of our centres where a brand is introducing itself to a new market or maybe a new demographic and so are less focussed on the money they generate, but on the connections they can make with our guests. We’re flexible enough in our approach that we’re able to support them regardless of their end goals.”

Glynn Edwards, Trading Director at Landsec. Retail Destination Data & Technology Issue 2024

Gareth: What are the most exciting trends and are you seeing anything that has the potential to disrupt the sector? What would you like to see more of in the future?

Glynn: As with nearly all industries I would expect AI and machine learning to be quite disruptive. There’s such a huge opportunity for data-led businesses to find efficiencies and ultimately draw statistical conclusions more quickly that can go on to inform their decision making. For example, understanding how our guests move through and shop our assets is vitally important in order to provide them with the best possible experience and right mix of exciting brands. Given our total portfolio can have nearly 200 Million guests in a single year it wouldn’t be feasible for a team member to crunch these numbers and draw useful statistical conclusions, whereby an AI model could quite easily do so. However, it’s important to say there will still be a place for our teams. Ultimately it’s the human relationships and industry experience that would allow us to act on this information in a collaborative way with our brand partners. In terms of what I’d like to see more of in the future, I think it’s further collaboration between retail brands and landlords like ourselves. Retail is a rapidly changing marketplace and I feel that delivering the most meaningful experiences to our guests will be done through the process of collaboration.

Gareth: What would you say to yourself when you started your career if you could offer one piece of advice? 

Glynn: Don’t just embrace technology when it lands but actively seek out the latest in the market. Our industry like nearly all others is changing so quickly as new technology lands it’s important to embrace it rather than be left behind. That and try to have a little more fun; enjoy the journey rather than focussing on the end goal. 

Read the Data and Technology issue of Retail Destination here

From challenges to opportunities, the morning focused on environmental, social, and governance (ESG) and anti-social behaviour with difficult and emotionally charged sessions, before moving on to the evolution of places and AI’s role in that journey, where the mood was upbeat in embracing change through collaboration. 

Gareth Jordan, ART’s Director, chaired a reflective session following AI presentations from Alex McCulloch, Director at CACI and Ross Powell, Technologies Director at JLL. The panel discussion delved into current approaches to insights and strategy through data and a grounded view on how that continues to evolve for both the full price and outlet sectors. It was important to debunk some myths surrounding AI to understand its capabilities and limitations for retail destinations. Aside from agreeing that AI is not about to replace our jobs, it could be said that jobs might be taken by people using AI! Seriously though, the consensus was to enhance roles, rather than replace them, with new technology, making tasks easier and decisions better and faster.

Alex Petit, Head of Data & Insights at Global Mutual, set the tone in answer to Gareth’s first question about the key components of active management. “We’ve spoken a lot about data, and data can be scary, but I wanted to make a point about active asset management and the success factor is you in the room.” Alex elaborated: “The last 12 months have seen a lot of activity from an investment perspective, and a recurring question I always get is around measuring the value of active asset management. This is where Retail Advantage is a valuable tool and other data pointers, which are really helping us to measure value. So understanding how a centre is performing, what’s happening from a turnover perspective, what sales coverage you get… so I think it’s a good way to introduce the subject – yes it’s about data, but it’s about you, because you are the ones producing the good work, and we are just here to measure it.”

The discussion moved on to the important KPIs when approaching Sales Performance insights and how data is being used on a daily basis to inform decisions. Glynn Edwards – Trading Director at Landsec, explained that while they use fairly traditional KPIs like sales, density, and things you would expect to see, Landsec has made good headway in the volume of data with AI, bringing better coverage. “But when you look at sales, one thing that has changed quite dramatically is what is included in that number. You look at the introduction of click & collect, digital sales in a physical store, and all of a sudden the success of a particular store is a lot more confusing. You may have a brand that does not make significant money from the store, yet they consider it a successful store, so you need to look at the value from a different perspective. That has been a fundamental change, so understanding the ‘halo effect’ through footfall monitoring and customer data is important.” 

Alex answered next, “Just to add to that, it’s super important to understand what’s happening within the four walls, but it’s also very important to triangulate sales with catchment data – demographics, mobility and banking data. People who know me know I am the queen of bad analogies, so I’m sorry, but I am living up to my reputation. First, it is really important to understand what slice of the pie you have. In a cost-of-living crisis, the pie may have shrunk, so understanding that the slice of the pie isn’t growing is an opportunity to understand what really matters to you, your investors, or your shareholders. So it’s great to know what’s happening inside the box, but relating it to the catchment is really important to measure share of wallet evolution.”

Kenny Murray, General Manager at McArthurGlen Cheshire Oaks Designer Outlet and Regional Retail Lead for UK & Canada, brought in the evolution of how we treat data: “Cheshire Oaks Opened 29 years ago this month, and in the old days, the data we used to get from brands was very transactional. You take the sales data to calculate the rent, but I think because we are retailers, we are naturally curious, and we realised there was much more we could do with that data. And it wasn’t just about density and sales return; it was also about what the store commercial was like, what the units they were selling were, and what the average selling price was. What would we see happening in terms of average unit price – was it going up? Or was it going down? And also looking at things in terms of asset management, which Alex touched on, the importance of understanding the capture rate.” Kenny explained that this approach is fundamental to their relationships with brand partners, enabling them to understand and resolve any issues. 

Gareth raised a question around regional comparisons and whether this was a useful performance metric. Kenny said, “I think that’s an interesting thing for us, and I think over the last few years, we’ve gotten much better at looking at things from a regional perspective. We’ve identified that the more we can work with a brand partner on the numbers, not just on one location of the business, but across multiple locations, brings a real big opportunity to drive performance overall.” McArthurGlen’s Friends and Family marketing campaign gave a good opportunity to share how they work with brands around KPIs on promotions so that they can understand how to maximise it together. “From day one, when any brand joins a McArthurGlen centre, it’s a partnership,” Kenny added. 

Gareth asked Glynn for his take on regional comparisons and whether “local” brands are still having an impact for Landsec at the moment. Glynn explained that “in terms of geography, there is value in those comparisons, but we also have different destinations with plenty of very different guests. So you could compare them, you get some value, but generally, they are vastly different. So you actually find out more about how different they are. We look at our data using geography, end-use and a whole raft of other metrics. Local brands still absolutely have impact – and in many ways, they’re more important than ever. So many of our retail spaces in the UK now have such a similar lineup of brands driven by their global success and appeal. We all want the biggest Zara, we all want the biggest JD, we all want the biggest Next. Unfortunately, that leads to pretty homogeneous centres, so local brands can be the best way to differentiate and stand out from the crowd.”

Gareth touched on a conversation with host Darren Pearce during the break about security, facial recognition and monitoring, leading to the question of the day: “Are we seeing AI replace humans already?” 

“Not replacing humans. But I think it is making us slicker in terms of the way that we operate,” said Kenny. He described the efficiencies made possible through innovation and the way that the outlet sector has transformed their deliveries of stock – dramatically reducing stockroom size thanks to the use of technology providing up-to-the-minute visibility on the stock movement. 

Alex followed with another compelling example: “We are talking to an F&B operator, and the brand’s background is interesting because the founder used to be an analyst in the banking sector. We are helping him understand and predict the footfall pattern for the F&B unit he’s looking at. Given that he’s using all fresh ingredients, understanding how much to buy on which day or how much could be wasted makes a massive difference between a super profitable unit and just breaking even.” 

Glynn also raised the increasing connection surrounding insights: “I think we probably share more data now than we ever have with brands – and with that, you get far more collaboration.”

Gareth moved on to a potentially divisive question about outlet vs full price, but no boxing gloves were required. Kenny commented, “I think it’s the detail at which the outlet sector works with brands is a big distinguishing difference… I think the full price market has followed for sure. You can definitely see that, but I think we’re still further ahead. And I think that ties into the question you asked about looking at things from a centre perspective or are we looking at things more regionally? If you look at McArthurGlen we are looking at things centrally, we are looking at things regionally and we’re also looking at things at a group level. Brand partners really want to work with us because they understand that we will help them maximise the potential within our centres. And I think that’s the part that outlet retailers need to continue to do, and you see full price working more in partnership with the brand partners, too – looking at how they deliver events and experiences that will drive footfall into the stores.”

Landsec has a mix of both outlet and full price, and Glynn gave his perspective next: “I think they’re probably more similar than they’ve ever been before; people could be in an outlet now and not necessarily realise it, the lines are being blurred, so people just want to shop brands and it does not necessarily matter.” 

Alex agreed that they are getting closer and closer and raised the benefits of Global Mutual having full price and outlet destinations with the technologies that cover both. However, she raised one big difference in how valuers value outlets vs full price: “Full price is seeing more and more turnover rents, and if you think of churning tenants in an outlet, it is something that is viewed very positively because you can keep on growing your densities. Sadly, when it comes to shopping centres where most investors want longevity and a very stable income, having that churn means that valuers take a dimmer view of that. So the valuation system needs to evolve.”

Apart from the light-hearted questions Gareth finished on courtesy of AI using ChatGPT, Glynn ended with an interesting point comparing the last decade’s predictions around the death of bricks and mortar due to online shopping with fear surrounding job losses from AI. He quoted share of market statistics from an earlier presentation, explaining that the opposite has happened and that online sales have been going down for the last three to four years. “We will find a new balance between the two, but the reality is that we learn to adapt to it; we have brought it into our everyday lives, and the same will happen with AI,” concluded Glynn. 

Whether you want to understand how to get more from the data you collect or learn more about how the industry is using AI-enabled tools to simply and quickly achieve connection and collaboration, let’s discuss.

Stay tuned for next year’s line-up for Retail Destination Live

See our top tips to optimise your retail destination’s digital strategy and de-clutter where necessary.

1. Think accessibility  

It’s important to make sure that you are getting the most out of the data you collect and that it delivers value to the people and brand partners working across your retail destination. 

Reviewing the data different partners and teams can access may help de-clutter hurdles that make the analytics less timely and the insights less actionable. 

Data can be very siloed, so through Retail Advantage, we structure data to be consistent. This way, analytics are presented dynamically to different teams, but still working to the same defined standards. This is essential for a portfolio of centres, but it is equally important for individual retail and leisure destinations so that different teams can access the data in real-time. 

2. Prioritise accuracy 

It is no surprise that destinations thrive on accuracy. It is essential to have the most reliable data you can. If you don’t have accurate data then you are making decisions based upon anecdotal information or simply guessing. Data gets old quickly, so it is essential to swiftly collect, incorporate checks and connect the right data points. Understanding the truth about your traffic and the impact of campaigns and other influences gives you the accuracy to target sales and increase performance. 

3. Be active 

Data only drives impact when you use the learnings.  Whether you are measuring the performance of a destination, street or store, get active about what you are measuring and what you aren’t and why. When building a picture of what is happening at a retail or leisure location, it is good to ask:

• What questions does the data answer? 
• What else would you like to know and are there any information gaps? 
• How can you add value for brand partners with a data sharing strategy that helps support shared goals? 

Looking for a digital de-clutter and support with your data strategy? Get in touch or meet us at Completely Retail Marketplace in London on 27 September 2022. If you are attending, we would be delighted to share our experience and demonstrate Retail Advantage at our Stand 114. 

As business leaders in retail real estate plan for a new normal, strategy must shift towards reimagining our industry because as digital communication constantly reminds us #WeAreAllInThisTogether. Lessons learnt from our experiences during this crisis should deliver ideas about how to come out of it. We are sharing ways to ramp up resilience along with inspiring insights from people with experience in their field.

“Bad times have a scientific value. These are occasions a good learner would not miss.”― Ralph Waldo Emerson

This financial and humanitarian crisis is unlike anything we have experienced so it will inevitably teach us new lessons. Creating successful retail and leisure destinations is both art and science and maybe the key differentiator after coronavirus will be how destinations utilise this experience.

Companies must get creative to prepare for the future now. This includes safe and enticing environments for reopening, robust operational practices and strong communication and collaboration with strategic partners. The global mood has shifted and consumers and businesses will be looking to act with a heightened sense of purpose. Immediate access to a unified, accurate view of how retail performs through recovery is essential to give teams the analytics they can and must act upon.

Engaging the tenant community will prove even more important and the need for refined data and strategic visibility will only increase as properties change. No business will get through the pandemic alone, so there is a need to share data, learnings and insights. Practices and technologies that are successfully applied during this time could have a profound effect on the industry’s future. A future none of us want to miss.

Get in touch to discuss the architecture we can help you implement for recovery