How smart technology is bringing malls into the digital age

For today's shoppers, going to the mall is more of a digital experience than many might realize through the use of beacons, AI and geofences.

September 12, 2017

As their mobile devices connect to the mall’s wi-fi network it opens up a new channel of direct communication giving them relevant information from where to park to special offers from their favorite retailers to make their shopping experience more personalized, convenient and enjoyable.

In return, malls get a huge hit of data on their customers and their shopping habits which can help them promote products and services more effectively as well as ensure they have the right mix of retailers for the local market.

“Shopping centers are deploying fast-evolving smart technologies to create digital connections that benefit both parties,” says Ashlyn Booth, Director of Property Marketing at JLL in Texas. “With the internet at the heart of the interaction, providing free Wi-Fi is no longer optional for malls that want to attract shoppers and keep them engaged.”

Embracing the digital age

Beacons are an increasing popular option. These internet-connected devices use Bluetooth signals to connect with consumers who have downloaded a specially designed app to their mobile device as they move between different areas of the mall. It’s not a one-size-fits- all approach; using additional data such as dwell time they can send customized offers and messages.

Tyson’s Corner Center outside Washington D.C. for example, used beacon networks to notify parents of their child’s turn to see Santa. In other malls, shoppers entering the food court received personalized coupons appropriate to that area.

Geofences are also becoming increasingly common. Using GPS or Radio-Frequency Identification (RFID) malls and indeed the individual retailers inside can create virtual boundaries that detects shoppers when they move into the area. Once inside, they can receive notifications on their mobile devices about parking, free Wi-Fi and special events or personalized offers. Clothing retailer American Eagle Outfitters increased traffic and sales at its outlet stores by sharing promotional offers with consumers who entered the mall’s geofenced parking lot. Taco Bell boosted sales 6 percent by using geofencing to entice consumers younger than 30 to download an app that allowed them to order the chain’s fast food items from their mobile devices.

It’s not just the invisible tech that is helping to customize the shopping mall experience; artificial intelligence also has a growing role. Fashion Island Mall in Newport Beach, California, and Mall of America in Minnesota used IBM’s Watson to power a chatbot which acted like an enhanced mall directory for shoppers who texted questions to a specified phone number.

“The more customers use these tools, the more AI such as Watson learns and the more accurate it will become,” says Booth. “As AI technology learns to tackle more complex tasks, it has the potential to dramatically change how shopping centers interact with consumers.”

Going beyond the personal touch

Consumers are coming round to the idea of digital interaction and sharing data in return for a better shopping experience. Research from Accenture found that more than 50 percent of consumers will divulge personal information if it means they get a more customized offer. And this data can also go a long way to improving safety and enabling the smooth running of a shopping center’s daily operations.

For example, sensors installed in shopping center parking lots can monitor traffic levels and help direct shoppers to less congested areas during peak times. This use of technology can make parking easier and faster, allowing consumers to spend more time in restaurants and stores.

Malls are also testing out new license plate scanning software which links to a database of vehicles known to be involved in criminal activities while others are installing facial recognition software using their existing networks of CCTV cameras.

Yet for all the advanced tech, simple changes can also help to keep consumers engaged. An example is charging stations where shoppers can juice up their mobile devices’ batteries. “You want shoppers to stay longer?” Booth says. “Give them a place to charge their phone.”

Overcoming the ‘creepy’ factor

Implementation of the fast-evolving array of smart technologies is not without challenges for shopping centers. “There is always a capital investment,” Booth says. “With older malls, it is more difficult, but you to need to be thinking about what will appeal to the shopper.”

Some shoppers find push notifications, AI and similar technologies intrusive or creepy. Booth says the right marketing messages and offers can overcome such objections: “While shoppers are prepared to offer up a certain amount of personal data, shopping center owners and retailers need to make sure they don’t cross a line and alienate their audience.”

Soon, even today’s newest technology might not be enough for malls to fully meet shoppers needs. Malls will need to go beyond free Wi-Fi and charging stations and give shoppers more immersive digital experiences.

“We need to be thinking about how technologies will appeal to shoppers and appeal to children,” Booth says. “It’s more than a soft play area and a couch with a lamp. It’s cool technologies that people can interact with.”

As an example, she points to new mall directory technology. When a shopper approaches the directory, it uses visual recognition software to gather information about the shopper’s gender, age, ethnicity, accompanying children and then display messages and promotions that it believes are of interest. As it collects and filters more data, the system gets smarter.

Such technology is just a small part of the smart shopping experience of the future. In years to come, a trip to the mall could be as much of a digital experience as shopping online.