Mobile revolution

You are rushing to your office. You pass a shopping centre and your smartphone vibrates. You take a look at the screen. "Come over for a cup of coffee and get a free piece of cake," it reads. Since you start your day with a coffee anyway, the temptation of a tasty little freebie leads you to stop at your favourite café chain in the mall. But your smartphone does not stop there - it knows that you are already inside. So it offers discounts on shirts and shoes. "Only for today and for an hour - 30 pct off!" Will you succumb? None of this is science fiction. This is how mobile applications for malls already work in the US.
A decade ago, an age ago
I bought my first mobile phone in 1999. It was a graceless black Motorola with a flip cover. However, it seemed extremely modern at the time. Few people could have imagined that it would only take ten years for a mobile phone to become a mobile computer. A decade ago the opening of a new shopping centre was an event that attracted all the media. Almost every opening ended up with impatient shoppers storming their way into the centre, shop windows and doors got broken and there were more than a few injuries. A few years later the opening of another mall is commonplace. The media barely registers a yawn at the opening of another shopping monster. Today the sort of thing that makes front page news in newspapers is Facebook buying the Instagram application - for a billion dollars! It is an easy-to-use program that allows you to share photos with your friends, and only exists in the world of modern phones (nowadays called smartphones). And what fires up the collective imaginations of economists, businessmen and average people nowadays is the mobile internet. The internet no longer just involves traditional www sites. It also involves (and soon will mainly consist of) mobile applications - for mobile phones, tablets and TVs. So what has this to do with the real estate market? And with shopping centres in particular? A fierce discussion is underway about the future of retail. The once radical opinion is increasingly being accepted that everything will eventually move onto the net. So how can we make sure that in a dozen or so years real-life shopping centres are still being visited by customers, for whom online shopping, consoles and smartphones have become as everyday as watching TV? Real estate specialists are still trying to figure out the answers. To do so they are attempting to classify the new generation, by labelling it and identifying its needs. This is how the recently fashionable reports on the so-called ?Generation Y' have been drawn up. Analysts have argued that new buildings (offices and shopping centres) aimed at this generation should be already under design today. This is a generation that wants more - a better design, friendlier space, freedom and access to the internet - everywhere! In this regard, it appears that shopping centre owners and facility managers have a lot of work to do.
Because customers are traditionalists
Shopping centre managers admit that mobile ?applications are the future. In fact, it is already possible to download applications for Warsaw's Arkadia, Galeria Mokotów and Sadyba Best Mall centres onto your iPhone as well as for Kraków's Bonarka and the shopping centres of the Plaza chain. "Mobile applications are still a novelty. It is worth keeping an eye on them, but it should also be remembered that customers do not use them on a mass basis," claims Andrzej Łapeta, strategic director of Firma Reklamowa Kuc, which provides marketing services for Bonarka City Center. "The Bonarka mobile application is part of our customer communication system. We are still developing it and plan to add new functions," he promises. Their plans involve a code displayed on smartphones to be used as an ID card in the discount machines system (?Rabatomaty'), which has been operating in Bonarka since November 2011, with an individualised discount offer based on a list of favourite shops and discount reservations, which are encoded using QR bar codes in discount machines. Also, the functionality is to be extended - in the future it will be possible not only to save product pictures, but also to share them with friends and include requests to make purchase decisions. Mobile applications are also being considered for Forum Gliwice. Its facility manager is currently focusing on the introduction of multimedia devices in the centre. "A smartphone application will be our next step. At this point we want to make our customers familiar with new technologies and we are developing our loyalty programme," reveals the managing director of the centre, Agnieszka Mielcarz. So-called click machines (?Klikomaty') have been introduced in the Gliwice shopping centre. These are interactive devices which, on the one hand, make navigation easier and, on the other, inform customers about events and allow them to log-in and use the loyalty programme. The devices are integrated with the website. "We would like to use some of the functionality of the click machines in the smartphone application, so we are carefully following all the innovations but approaching them with a certain degree of caution," says Agnieszka Mielcarz.
It is not without reason that shopping centre managers regard such innovations with caution. Customers have simply not taken them up on a mass basis so far. In its first three weeks the Bonarka application was downloaded by around 250 people. But they are the so-called ?opinion leaders' - a crucial group of people for shopping centres. The click machines operating in Bonarka enable customers to print vouchers with bar codes including an encrypted discount. The rebates offered by tenants can also be viewed from the the mobile application. However, in order to use them it is necessary to print them in a click machine. "Indeed, this might seem like a step backwards. But we have to think about our customers above all. Besides, our aim is to persuade as many people as possible to look at the monitors of our click machines, because this is where we can inform them about events and advertise our tenants," explains Andrzej Łapeta, who also emphasises that most customers are still traditionalists.
Millions on the way
There is no denying that some facility managers of shopping centres do not understand what the mobile revolution is all about. None of the Polish applications available on iOS (the iPhone operating system) has a geo-location system. The layout of the centre displayed on our phones is actually a traditional map and viewing this on a small screen is not ideal. How can I get from (for example) H&M to Empik? This is what the mobile applications for Polish shopping centres cannot tell us. Why is there no geo-location in Polish centres? "Because building the infrastructure costs money and there is no guarantee that such an investment would be profitable," the head of one of the shopping centres tells us. And he is right. There is no guarantee. The cost of an application that uses geo-location and text message notifications starts at PLN 150,000. By comparison a simple information application is an expense in the range of PLN 8,000-10,000. But unless shopping centres exploit the possibilities offered by modern phones, the competition will step in - and in fact it has already done so. Advanced applications using geo-location are appearing on smartphone screens, allowing customers to hunt for promotions in the nearest locations. This is how, for instance, Treasure Island works, which is available on iOS and Android. After launching the application the telephone identifies our location using GPS and shows us the nearest shops offering discounts. Discount vouchers can be downloaded onto the phone and you are ready to go to the chosen location. Unfortunately, only 20 brands are covered by Treasure Island so far.
Mobile addition
"Shopping centre owners must not forget about their current customers. This is why traditional forms of communication should be used in marketing and gradually complemented with innovations," believes Marek Thorz of Plus Communication (which works with Forum Gliwice, among others). However, Bartłomiej Juszczyk, president of Agencja Marketingu Zintegrowanego Grupy Adweb, is of the opinion that the smartphone revolution in the shopping centre world still lies ahead of us. "I believe that shopping centres are still not ready for a serious investment in mobile applications. The reason is quite trivial - most facility managers do not appreciate the profits that solutions of this type could bring. The issue is quite a complex one because an application itself is not everything. In order for it to function well and bring benefits, everyone has to be involved in servicing it: the facility manager, the PR departments and - crucially - shopping centre tenants themselves. And this generates costs," remarks Mr Juszczyk. Agnieszka Mielcarz also emphasises the importance of cooperation with tenants. "All activities undertaken by a shopping centre owner are aimed at improving the results generated by tenants. This is why close cooperation is so important. A shopping centre cannot offer a discount on its own. It can be done by a tenant and communicated with the help of tools created by the facility manager," she claims.
So what should a good mobile application contain? "It is worth focusing on geo-location. A customer should have the ability to quickly check which part of the shopping centre they are in. The application should also ?be able' to show the most convenient route to the chosen shop," insists Bartłomiej Juszczyk. What else? "It would be good if the application could communicate with its user. On entering the mall the application should inform us of the current promotions in the nearest shops. The information should be personalised and encourage customers to make quick decisions; for example, to take advantage of a 30 pct discount on shoes in the next hour. Of course, the application needs to be regularly updated, it should inform customers about events in the centre, opening hours and any changes that concern customers," says Mr Juszczyk.
Shopping centre owners are still weighing up whether to enter the world of smartphones or not. The companies that develop such applications are already aware of this. "In the last few months we have received a number of enquiries about the commercial use of mobile applications - from shopping centres, among others - that use geo-location, for example," reveals Bartłomiej Juszczyk. Clearly, the mobile revolution is on its way.