Technology and real estate must blend together, mega mall owner says
- Consumers expect technology in stores today, Westfield co-CEO Steven Lowy tells CNBC.
- He will soon help lead a real estate/tech incubator known as OneMarket.
- Lowy aims to create a platform for retailers and their landlords alike to better understand shopper behavior.
Technology and real estate must blend together better today in order to support an evolving retail market, according to one mega mall owner.
"Consumers today expect to be very, very well serviced — with technology," Westfield co-CEO Steven Lowy told CNBC in an interview at the ShopTalk conference in Las Vegas. "They wake up every day with that expectation, and it's essential that the retailing industry really adapts and evolves ... so it can compete better."
Unibail-Rodamco, a Europe-based commercial landlord, recently agreed to buy Westfield for roughly $15.8 billion. The deal should be finalized later this year, and once the transaction is complete Lowy will become the chairman of OneMarket, a network built out of Westfield Labs. Don Kingsborough is the current CEO of OneMarket, which is proposed to become its own public entity in Australia.
"The purpose and vision of that entity is really to create a global network and platform to connect retailers, brands, venue partners (such as malls) ... and of course technology partners," Lowy said.
The retail real estate market has been plagued by store closures within the past few years, including those from Best Buy, Walmart's Sam's Club division and Toys R Us, most recently. Landlords are looking for solutions to lure shoppers back to their properties. More alliances with tech are being proposed as one solution at ShopTalk this year. According to Lowy, "retailers need technology within the store."
"They need technology for financial payments. They need technology for visual merchandising. ... Digital companies today pretty much understand the shopper before they even make a purchase. Physical companies have no idea what the customer is doing before they make a purchase," he said.
"The [retail] world is evolving, and evolving at a much faster pace than most people think," Lowy told CNBC. "We saw this trend more than a decade ago and made a conscious effort to redeploy our capital into the really great malls in great cities ... [and] sell malls that we didn't think had a bright future."
The mall owners struggling the most today are the ones refusing to invest in their properties and ignoring the changing consumer landscape. Real estate investment trusts including Simon, GGP and Macerich have been pegged as some of the best in the business for bringing in e-commerce brands such as Casper and Untuckit, for offering their tenants more data on shoppers' behavior after installing traffic counters and other geofencing tools, and for improving customer service all around.
"The talk of the death of the mall, and many bankruptcies of retailers ... it's basically because [mall owners] are not servicing their customers properly in a way that they like," Lowy said.