Overall, real estate is not very far along in its adoption of big data, but one sector where the industry has been active on this front is retail, according to Doug Herzbrun, CBRE Global Investors’ global co-head of research. In fact, he says, retail customers are tracked from the moment they drive into a parking lot.
In the US, where privacy laws are much looser than under GDPR – the European Union’s data protection scheme – retailers are keen to use data from a variety of sources. Meanwhile, data points can help landlords maximize tenant mix and layout, among other benefits.
One of the holy grails of real estate is the utilization of big data. Frankly, real estate is not very far along in utilizing big data. We don’t have historical data sets, we don’t have tracking to do things like machine learning, but the one sector [where we’re really active] is frankly retail. If you look at, for instance, retail landlords – by the way, the buzzword now for retail landlords is placemakers – you want to create a sense of place in your retail center. Retail landlords are now tracking everybody who’s coming into their shopping centers, either through scanning the license plates of cars parked in their parking lots and/or knowing the phones that they’re tracking of everyone who enters the shopping center.
This whole idea historically that we had like 3-mile rings and 5-mile rings to test out your demographics is out the window. You know exactly where your customers are coming from, you know exactly from their addresses what their demographics are. So you can take that kind of data and match up your offerings in your shopping center both in terms of the store mix and even things like experiences, having events, you can match up the demographics of who’s coming to your shopping center.
Once you go into a shopping center, the retail landlord is tracking exactly where you’re going through your cell signals. They know shopping patterns, they know the best places to locate stores adjacent to one another, they know which stores actually contribute to cross-shopping patterns. Again, this helps with the tenant mix, with the ideal layout of the center, not only who do you get in there but where exactly you put them within the shopping center.
Clearly the landlords are using that and the retailers themselves are definitely using it – again, because almost all purchases now are done through credit card, debit card and increasingly they’ll be done on your phone. They know exactly what you’re buying, they know all your shopping patterns, they know how often you may buy a good, they’re tracking as you walk by a store and they can send you a targeted ad.
I guess that’s a nice way to say they’re spying on you a little. They’re customizing, they’re targeting with you. Clearly the retailers and the retail landlords are using this technology in this area.