y can post, like, share, tweet, and then retweet its way to success. So I gladly stayed away from that and stuck to some clear themes that are emerging through the hype. Much of the visible innovation in retail over the past 10 years has been in e-commerce. All kinds of novel retail models have emerged – online auctions, daily deals, flash sales, marketplaces, and Amazon Prime, to name a few. E-commerce penetration of retail sales has advanced steadily pretty much everywhere in the world. At the same time, emergent technology has reshaped the way stores and shopping centres are being used by consumers. This has required a response on the part of retailers and shopping centre operators. A key point I wanted to make to my audience was that technology itself is driving that response and it is very likely to do as much for physical retail space in the next five years as it has done for e-commerce in the past five. There has been more progress incorporating technology in market research for new stores than actual technology investment in the store experience itself. Mainstream retailers have been using e-commerce very innovatively for determining hot spots where physical stores are likely to succeed. This benefits the shopping centre industry by giving centres access to new tenants and in some instances a whole new tenant base. (Some international retailers arriving in Australia or planning to arrive would not have done so without advance intelligence from e-commerce.) Mainstream retailers have also been using e-commerce to test new products and businesses before putting them into physical stores. If a product line has been embraced by consumers already then the retailer can more efficiently merchandise its precious store space. It can also choose which stores to place the new merchandise in based on the geographic response through e-commerce. This drives higher store productivity, and again, indirectly benefits shopping centres. Despite this kind of activity, it’s fair to say that from a technology standpoint physical stores have been very, very under invested in recent years, while capital expenditures have been focused on the build out of e-commerce platforms. A lot of the technology that could drive productivity in the physical space has been kept waiting in the wings because of the disproportionate need to focus on e-commerce. Dubai Mall Now that e-commerce platforms have been readied – or near being readied – the innovation pendulum is swinging back to physical space. There is a fresh focus on the store for several reasons, but none greater than the fact that the store is the hub of the omni-channel system. Omni-channel The technology investment in stores will take a number of different forms, but the overarching result is to improve the shopping experience and put it technologically on the same footing as the best online shopping experiences – it will improve visual merchandising, incorporate mobile, robotics, and other technologies. Above all though, technology is being implemented by both retailers and shopping centre operators to soften the pain points of shopping. A key role of technology implemented in physical retail space will be to take away the irritants of shopping. It doesn’t matter whether you love shopping or hate it, some things will always impair the experience. These are the pain points. Pain points include not being able to find a good parking spot. Or not being able to quickly find what you are looking for in the mall because it is large, has multiple levels, and the store locator maps are either not where you need them or too hard to follow. Further pain ensues when you do find the store and can’t find what you want or can’t find someone to ask. Or when you have to wait in a line at the checkout. And so on. All of these pain points have a technological fix. For example, indoor turn by turn navigation systems will enable people to find stores easily and find things in stores easily. RFID (radio frequency identification technology) will help retailers keep things in stock and enable shoppers to wheel their carts out of the store without stopping at a checkout. Customer analytics technologies will help shopping centre operators and retailers alike to better understand shopping patterns – where people tend to go first, where they congregate, what they whizz by and so on. These insights will inform the configuration and merchandising of shopping centres and stores in a more customer-centric manner. By softening or eliminating all the pain points, people will have mostly positive associations with the process of shopping. Retailers, for their part, still have a lot of work to do to become the genuine multi-functional, multi-tasking animals that an omni-channel model demands. Many are striving, but few are actually there yet. As they become part showroom, part traditional store, part warehouse, part other things too, stores will become more productive and valuable assets to retailers than they have ever been in the past. Of course, store productivity will have to be measured differently and more broadly than in the past. We’re going to need new metrics because productivity and value can no longer be thought of as sales per square metre of merchandise that’s moved in transactions with customers who walk in the store. Shopping centre operators need to be at the forefront of creating those new metrics. For them, capturing the true value of real estate services means being accurately able to measure it. Michael Baker is principal of Baker Consulting and can be reached at michael@mbaker-retail.com and www.mbaker-retail.com.