Connecting with customers remains one of the key challenges facing retailers and retail property landlords, David Simon, CEO of the US shopping centre giant Simon Property Group, told the ICSC conference in Milan earlier this week.

shoppers

Shoppers

'We're getting better at connecting with clients and that's a big change from where we were decades ago. But we need to take responsibility for driving traffic to centres and that whole process has become much more sophisticated than in the past.'

The transition is by no means complete, he said. 'There's a lot more to come. We have to figure out how to use technology to communicate directly with the consumer and alert them to all that there is to in the mall and how to find things…so far we have just been scratching the surface.'

A big mall in the US has well over 100 stores, and in the past the average consumers might visit six or seven of them. Now with the advent of Internet, consumers do more research before they come and only visit three or four stores on average. They are also doing a lot less browsing. Simon: 'Every minute a consumer is in the mall they spend a dollar. So the question is: how do we get them to go and see X, Y and Z and browse a bit more?'

Follow the millennials
Technology can play a key role in this context, he said. 'Driving traffic to mall can be hard. But it shouldn't be hard to drive consumers once they're in there, and to encourage them to do more than they're doing. That's a big challenge for us. We're experimenting to see what we can do and how we can make it all smarter. Digital and Internet is a powerful force.'

A key group to follow are the 80 million millennials in the US, Simon said. 'It's not just mall operators, all retail clients are trying to figure out how to connect with them.' He added that it was clear that Amazon does connect with them significantly and that the ecommerce giant was 'hugely powerful'. 'We have our work cut out for ourselves if we are not going to cede our business to Amazon. We have to be better operators, and we have to be more experiential.'

Modern retail landlords need to develop the same mentality as the hotel industry, he said. 'We have to spend the money, we have no choice. We have to create a new expense line. There’s too much competition from Internet. Our level of service needs to be better than that of the hotel chains.'

At present too much retail space in the US does not meet customer expectations, Simon conceded. 'We need to make it attractive, and if it's in a good location, it can withstand everything. It will take all of our efforts to connect with consumers, but as soon as they marry and have children, they will become more frequent mall shoppers.'