Just as Cannes spent the week swamped by a swollen mob of cities keen to hoover up investment in the property market, there was similar fervour in Barcelona a week earlier.
The Mobile World Congress is Glastonbury for geeks and has become Europe’s lighthouse for future technology. Calorie-gauging watches, virtual reality goggles and of course Samsung’s new curvy phones are already on my kids’ Christmas lists.
While nobody needs a 55” super-OLED smart TV to point out that property isn’t the world’s fastest-moving industry, innovation inertia will shortly become a real issue for retail property. While the 2000 dotcom crash took out many over-valued tech firms, the resilience of real estate is such that few let anything as inconvenient as a financial crisis stop them coming back for more. But future resilience will need a marriage – nay mash-up – of both sectors.
For some, click and collect – or worse, simple WiFi – is still seen as some amazing revelation. Attend any seminar or talking shop and you will hear gallons of phrases such as “omnichannel” and “customer experience” pour through people’s lips. The essence of these things, as we explored in Retail’s Digital Future, our joint report with BCSC, will come to define retail property.
The days of providing a box for hire to a retailer and coming back 10 years later to renew a lease are long gone. And, like it or not, retail property has unwittingly become a B2C market place.
There is an array of genuine innovations that could enhance the social experience of shopping as one of Britain’s national past-times. As independent cinemas and emerging food operators grow in popularity, the shift of retail towards becoming a full-on leisure experience is profound.
Luxury retailers such as Burberry have led the way with clothes hangers showing Facebook likes while Macy’s, the US department store, have “smart” changing rooms. In practice, the latter is nothing more than an iPad letting you request other sizes. But with augmented reality technology allowing screens to overlay real world images with computer generated visuals, use rather than novelty is not a million miles away.
At the British Museum, one start-up has created an augmented reality game around the Elgin Marbles where kids point tablets around a room to trigger on-screen adventures. The potential to combine this with 3D mapping, to guide shoppers around stores and use beacons to transmit invisible vouchers, is huge.
Much of the short-term change in retail is likely to be centred on cashless payment methods and wearable tech. Google Glass may not have set the world on fire, but people are already queuing for the Apple Watch. Such devices, which connect you to everything everywhere, will leave a valuable trail of data behind. And for the rational-thinking financiers, it is the commercial potential of that data that will create the second-biggest opportunity here, behind direct customer engagement.
While data protection, privacy, financial and reputational risk are all key considerations, they, together with technology itself, are shifting quickly.
Understanding the principles is key. And provided firms keep a smart eye on ever-evolving privacy and data laws, they can begin to keep up with consumers and avoid a close shave as frothy innovations leave a trail of obsolescence behind.
Jane Hollinshead is head of real estate at Addleshaw Goddard
