Editor’s Choice: Let’s get phy-gital

This whole week my own adaptation of Olivia Newton-John’s ‘Let’s get physical’ has been running through my head.

Endlessly the refrain ‘Let’s get phy-gital’ has been repeating itself as I sat through a conference, first in London on Monday and Tuesday and then in Barcelona on the following two days and learned that the physical and digital realms are converging. I blame it on ICSC Europe and INREV and I advise you to submit a complaint to both of these organisations if you are now hearing the same lyrics.

I have another bone to pick with ICSC in particular. For the first time in my life I feel even more laid back than my fellow average Australian (definitely not Newton-John!) after listening to some of the fastest talking Americans take the stage at the Plaza Parks hotel in London. I am sure I talk – and think – at least three times slower than Sarah Quinlan, global group head of Mastercard, who explained how data on consumer spending patterns can help retailers target their marketing campaigns more effectively.

Indeed, I am quite convinced that Quinlan is one of those multi-talented multi-taskers that I am so envious of as she talked about Americans and their travel bug during her keynote address. ‘We want to travel more than anything,’ she told the ICSC delegates at the fastest rate I have ever heard a woman speak. ‘But you only need to target 27% of the population. They’re the only ones who have a passport. That’s how you can use the data.’

Another American, Bob Welanetz, global retail adviser to The Blackstone Group and ICSC chairman, also gave the London audience food for thought with his insights about the differences between the American and European approach to shopping centre development. And thankfully they were delivered at a pace that I could keep up with.

Convergence of technology
But he, too, reinforced the point that there is no relief for those on the wrong side of the digital divide. Technology will play a greater part in the next generation of shopping centres on both sides of the Atlantic, Welanetz predicted. '93% of shopper decisions are influenced by social media,' he said. 'The convergence of technology is what it’s all about, the engagement channels of MoSoLo – mobile, social, local and how quickly we can adapt and adopt is a challenge for our industry.'

There, you have it, MoSoLo - another example of the Property Speak – or should I say Digi Speak? - that entered my vocabulary this week. Digilogue - where digital and analogue converge - is another.

But there is good news for terrestrial animals, Scott Galloway, professor of marketing at New York University and Founder of L2, a think tank for digital innovation, said during his galvanising keynote address at the ICSC conference. Pure-play ecommerce companies are dead or dying as the ecommerce divisions of 'terrestrial animals' make a comeback, he said. 'The music is stopping for ecommerce firms. The new black in ecommerce is stores.'

Not all the other conference speakers were convinced that click-and-collect is the nirvana for terrestrial retail animals, but there is hope for the brick-and-mortar world, agreed Kevin McKenzie, group chief digital officer at Westfield Labs. Westfield Labs is the brainchild of the company’s co-CEO Steve Lowy, delegates learned. ‘We set up Westfield Labs to solve the needs of the changing consumer,’ Lowy said in a video message shown during McKenzie’s keynote address.

A key driver behind the initiative is the fact that everybody has a mobile device these days, McKenzie explained during his presentation. ‘The management team at Westfield really started to see that the consumer is changing with mobile devices and that they are looking for new experiences created in a physical world.’

Data is key, he added. ‘It’s amazing how well data can inform you. Silicon Valley has an amazing amount of innovation. But it’s one thing to create new technology and it’s quite another thing to have the physical reach and access that Westfield has to so many consumers. When we joined Westfield, we saw the same opportunity in the physical world.’

Great minds think alike
At my next stop in Barcelona, the INREV conference organisers proved the point that great minds think alike with its focus on the impact of technology on the real estate industry. As in London, some of the views expressed during the sessions were consensual, some were conflicting. But with 50% of the world’s 7.2 billion people using the internet and 25% using social media, the impact of technology usage is indisputable, INREV’s chairman Patrick Kanters noted during his wrap-up speech.

Mobile technology is the way of the future, Kanters said, citing the words of Bahram Motamedian, managing director of portfolio management at USAA Real Estate Company. ‘That is just one more reason why we need to take account of it in real estate,’ he added.

Commenting on the key takeaways from the conference, Kanters said that technology is already front and centre of the way that the industry thinks about real estate at an asset and operational level and also in terms of investment decisions. ‘It’s clear that this will only intensify,’ he said.

Kanters pointed to the keynote address of Swedish trendspotter and futurologist Magnus Lindkvist who said technology is the key to what he called vertical change – the mindset that allows us to realise that assumptions may well be wrong, to ‘explore the mountain’ and to ‘make magic and create’ rather than engage in R&D – rip off and duplicate. But, he added, technology must become boring before it can change things.

The dark side of technology
Perhaps the most sobering message from the INREV conference came from Lord Robertson, former UK Defence Secretary and NATO Secretary General. In a brilliant exposé of the geopolitical threats that the world now faces, Lord Robertson reminded the INREV audience that technology may not always be positive and that it has a dark side in the shape of cyber attacks on national infrastructure that have the potential to affect the way we do business and live our lives and destabilise the status quo.

Lord Robertson’s insights into the mind of Russian president Vladimir Putin were also enlightening. Describing his first meeting with Putin in 2000, Lord Robertson said he had no doubt at the time that Putin was committed to changing and reforming Russia and making it part of the international community.

For the past 50 years Russia had been on one side of the argument and in 2002 the western world had an opportunity to embrace the country and allow it to become prosperous, integrated, strong and respected on the world stage. Now things are back to square one, Lord Robertson said: ‘We made a huge mistake by not anchoring Russia in western Europe.’

But despite the problems in Russia and the possibility of a 'Grexit' and even a 'Brexit', Lord Robertson pointed out during his speech that Europe had become a much safer place as the threat of a world war had diminished over the past seven decades. He also ended on a positive note. Quoting the ‘great philosopher’ Charlie Chaplin, he said: ‘I have a great interest in the future because that’s where I intend to spend the rest of my life.’

Thank goodness, as I gear up for a long weekend in Barcelona, I now have the makings of a new refrain running around my head.

Judi Seebus
Editor in chief PropertyEU