PropTech in Retail: Technology to Drive Profits in the Future

– Anuj Kejriwal, MD & CEO – ANAROCK Retail 

Property technology (PropTech) is a new force that’s taking the real estate industry by storm. It is the  use of information technology to help individuals and companies research, buy, sell and manage real  estate. Just the way FinTech focuses on the use of technology in finance, PropTech uses digital  innovation to address the needs of the property industry.

This trend has gained pace since 2013 with the emergence of FinTech, the growing need for smart  spaces, expansion of online marketplace and automation-linked productivity. Today, every step of the  real estate life cycle is being relooked and tested for redesigning with the help of technology.

Technology has also become the cornerstone of the new retail story in India. From the basic design  stage to creating a superior customer experience, technology is prevalent at every step. Even as it  streamlines and eases the entire process from designing, development, leasing and creating a  customer experience, technology in retail is key to improving profitability.

Technology in Mall Designing 

Developing a mall is not the same as building a residential or commercial asset and requires a  specialised design and layout. This lesson was learned the hard way by mall owners/developers who  struggled with multiple floors, high vacancy rates and failed malls. The last few years have seen the  application of new technologies/ software to understand the design of a mall and make it more  customer-centric.

Gone are the times of basic AutoCAD drawings. Architects and designers have now upgraded to  software such as ‘Revit’ and ‘Archi Cad’ to optimise mall design and focus on customer experience.  Another advantage of using these digital tools is the optimal placement of stores within the mall to  increase visibility and, in turn, enhance customer experience.

Adoption of appropriate technology while designing a mall achieves:

  • High visibility and proper placement of stores
  • Excellent circulation areas
  • More open spaces to create experience centres
  • Better accessibility to avoid traffic bottlenecks outside and optimal flow of footfalls inside

These factors are key differentiators between successful and average malls and also ensure future  profitability by attracting key tenants and running cost-effective operations.

Efficient Mall Development 

It is an established fact that excluding land cost, almost 50-60% of the overall cost of a real estate  project involves the construction process. This makes it imperative to procure the appropriate materials  and use the right construction technique to save costs and increase profitability. In shopping malls  across India, developers have adopted advanced and green materials in order to make their structures  more efficient and reduce environmental pollution.

PropTech is now at the centre of mall development and several of the latest building technologies are  being adopted to optimise construction time and save costs:

  1. Prefabrication: This technique increases the construction speed and helps time valuable time.
  2. 3D printing: By using this tool, mall developers are able to increase construction speed at  lower costs and also achieve better utilisation of space.
  3. Green materials : The use of environment-friendly building material has the dual benefit of  lowering pollution and increasing construction speed.
  4. Robotics: Robotic technology accelerates construction pace and reduces overall cost by  lowering dependence on manpower.
  5. Building Information Modelling : By employing this technique, mall developers are able to  achieve better collaboration and communication along with better pre-construction project  visualisation

Streamlined Operations & Leasing 

Today, PropTech pervades almost all aspects of contemporary real estate development and use, and  is being increasingly used to enhance the operations of shopping malls. Armed with tools such as  Artificial Intelligence, Big Data and Analytics, Virtual Reality and Augmented Reality and Computer Aided Design (CAD), malls owners and developers have optimised operations by reducing the need for  manpower.

Though mall leasing in India is mostly done offline, either through real estate brokers or directly through  the developers, technology is making inroads in this aspect of the retail business as well. Mall  owners/developers are opening up to new technologies such as Blackbird – a VR and market  intelligence tool to conduct real estate transactions. By viewing actual CAD renderings of properties,  they can filter their search using factors such as demographics, tax incentives, transit options, etc.

Access to big data also gives brokers the ability to match investors to property type and streamline the  entire transaction process. ANAROCK uses big data extensively to quickly and efficiently match the  requirements of tenants with specific requirements to existing mall stock in any given catchment and  mall typology.

Enriching Customer Experience  

The retail customer profile is fast evolving and is now dominated by millennials who are tech-savvy and  demand the same from the retail spaces they patronize. This has led to the trend of experiential  shopping that is built around a holistic shopping experience. Mall owners are focusing on different  aspects such as fast-paced check-out to identifying buying behaviour of their customers to create an  integrated shopping experience.

With the rising penetration of e-commerce, the retail industry is facing stiff competition and has had to  combine its online and offline businesses. Major players have developed mobile apps and/or  mobile/computer websites to make the buying decision more conclusive for the buyers.

Fast Forward 

Technology is developing at a rapid pace and the Indian retail sector must evolve constantly to keep up  with not just offline peers but also competition from e-commerce. The key is to incorporate technology  at every step – from mall designing and daily operations to accentuating customer experience. With the  successful implementation of PropTech in Tier-I cities, we are likely to see its impact in smaller towns  and cities – because it is here where the maximum future growth for Indian retail lies.

PropTech is ultimately an investment in the future of Indian retail, and finds application in building better  malls, streamlining operations and creating a memorable customer experience. The initial cost of  adopting the latest technologies may be high, but such an investment translates into loyal customers  and more profitable malls for a lifetime.