Westfield Searchable Mall: Boosting offline sales by tapping online activity
Westfield has found its place in the changing world of retail, as an offline affiliate with an important role to play online.
After a bumpy entrance to online retail in which the shopping centre chain attempted to own online transactions, Westfield has turned itself around to settle in its place as an aggregator and supporter of its retail brands.
The Westfield Searchable Mall is a world-leading website concept that focuses on engaging customers at the discover and find stages of the shopper journey, encouraging visitation leading to offline sales. The website combines social media-like browsing functionality and curated content with practical and timely information to bridge the gap between online and in-store shopping experiences.
A key insight informing this pioneering strategy is the number of offline sales that are influenced by online activity – bricks-and-mortar still account for the majority of purchases for Westfield’s retailers.
Westfield’s director of marketing, Scentre Group’s John Batistich, tells Marketing that the Searchable Mall taps into those profound changes that technology-enabled connectivity has made to shopper behaviour, from the old linear path to purchase model to a new network of connections that make up the shopper journey.
The internet’s disruption of that customer journey has seen it go from this:
Before we launch into this insightful interview with Batistich on retail trends and Westfield’s digital direction, anyone unfamiliar with Westfield’s Searchable Mall will benefit from taking a look at this video:
Marketing: Can we start off by talking a bit about the state of the retail industry in general? It seems everybody’s talking about retail being doomed because of online shopping. Where do you see it all going?
John Batistich: Clearly there’s a profound change in shopper behaviour, driven by technology-enabled connectivity, that now gives shoppers access to retail at anytime, anywhere, on any device. What’s changed is that shopper journey, and what we see is a number of critical new stages that have occurred over the last few years. [Referring to above infographic] Australians have spent, would you believe, less time on the find stage over the last decade as search algorithms have got better and comparison sites have got better. We know the search occurs offline but very much online increasingly. Whether it is subscribing or downloading, or increasingly, click and collect, or buy in-store and get it home delivered, the acquiring stage is being decoupled. We’re seeing increasingly more time being spent at the discovery stage – the whole journey is much more what I would call more snackable.
The key points are the journey’s changed forever and digital is now enabling it to occur online and offline and its now a seamless authentic experience across any channel. So it’s less about what happens online and offline, its more about what channels are creating reach, what channels are influencing the sale, what channels are being used to buy, acquire, and then create a relationship with the brand or the retailer.
And what we know is whilst the conversations have been over the last few years around, ‘Online is this big threat to offline’, we don’t see that at all. And let me tell you, the customer doesn’t see it that way, increasingly. Now a conversation amongst the leading retailers is about how online influences offline, which is the biggest source of value. Because, in Australia, online is still quite small.
M: As in ecommerce?
JB: Yeah, ecommerce alone. Quantium data in December of last year shows online sales represented 6.8% of retail sales in Australia when you exclude cafes, restaurants and takeaway. Interestingly also, the growth rates in 2014 slowed significantly, which did surprise us. But what’s being the biggest driver of growth is our online influencing offline sales. For fashion and beauty it can be anywhere from 40% to 50% of offline sales that are influenced by at least one digital channel. So that’s really where the conversation and the thought leadership is changing amongst the leading retailers. It’s not about online versus offline, its about how online is influencing offline.
M: So with this Searchable Mall you’re getting into the discovery/inspiration stage, right? Obviously consumers are online anyway looking for inspiration but it’s a matter of you getting in there and being involved in that?
JB: Exactly, so the insight that we gained was that people were coming to Westfield.com.au to inform their journey to our shopping centres, and they weren’t in small numbers. We recognised that we wanted to help shoppers find what they want through the lens of their local Westfield. So we know they’re trying to find stores, and they’re trying to find opening hours. And the big insight was they were saying, ‘You know what, we’re trying to find stores opening hours because we want to find products’. it’s obvious now.
So we said, ‘Hang on, why don’t we try to help them find products and find deals around those products, and events around those products? For dining, why don’t we help them find dining options and view menus? For movies, why don’t we help them find movie times and options?’
M: So where did all these questions come from? As you say, when you look back at it now it seems obvious in hindsight – of course that’s what people want. But there are not many other shopping centres that are doing anything like you are. Where did all the ideas come from?
JB: You’re right. No one is doing this here or on the planet that we know of, and we’ve looked at the US and the UK and Canada, and there is no physical shopping centre business that is helping their retailers showcase their products on their digital platforms to help shoppers find what they want through the lens of their local Westfield, and buy in whatever way they choose.
We spoke to our retailers. We spoke to our shoppers with our research. And they said, ‘We believe there’s friction. We go to your site to find stores and opening hours but we do that to find products. If you help us with products that would make sense to us and you’d solve a problem’.
M: Then it works well for the retailers because you’ve got the affiliate deals set up with them, so if somebody wants to make a purchase online then they click through to the actual retailer’s online store, and everybody’s happy.
JB: Exactly. In the past, we tried to take the sale. We’re saying now, ‘No, if the shopper wants to buy it now online, we’ll help you’. They just click out to the retailer, just as we would do in a mall environment. That model, as evidenced by the quality and the range of the retailers working with us, is really starting to work.
M: Fabulous. It’s almost quite a brave move to step away from that and realise actually, ‘We can’t own the sale, we need to play more of a middle-man kind of role’. Shoppers have got to be grateful for that.
JB: And what we did is worked hard to create integration solutions for retailers that were technically easy, efficient, and created for us, a really good quality, almost real-time, product integration feed onto our platform. But I think this is an important point – whilst there are a lot of online affiliates, our focus is we are an offline affiliate. I know that sounds really odd, and we’ve been kind of sharing this with the market. There are very few people who are based upon this insight that whilst online affiliates are important, what’s much more important when you look at the numbers, for every dollar spent on online, online channels are influencing between $6 and $8 offline. We call ourselves an offline affiliate foremost, and an online affiliate secondary.
M: Do you see it as being a situation in that, despite what all the talk is about, people still love shopping in person, and that’s going to continue?
JB: Absolutely. there is this instinct, ‘We want it now, we crave physical experiences,’ and the evidence is irrefutable. Physical retail is growing. Our sales for 2014 are up, our traffic is up in our malls. You can’t consume a haircut online, you can’t at this stage, not for the next decade, see a health practitioner [online]. Casual dining, health and beauty services, leisure and lifestyle, entertainment, happen largely in physical environments. And when you consider Australians spend $270 billion on retail, $255 billion of it is in stores.
M: So the Searchable Mall is driving people to buy more a lot of the time. The research I’ve got in front of me is 72% of shoppers who completed a web event ended up making a purchase either in-store or online. So it’s a matter of getting people engaged and inspired?
JB: Exactly. Monash University, Australian Centre of Retail Studies spoke to more than 3000 shoppers online. They said: ‘We know you called a store, we know you went to a product details page, we know you went to a map after looking at products on the site. So we know you were looking at Cue products, and then you looked at a Cue map. You don’t do that just for entertainment. You’re doing that for a purpose. So what did you do?’
When you looked at all those events, and some of them were higher and some of them were lower, but the average was 72% of those people who did those events said, ‘I bought something’.
771,000 people last year did one of those web events. 82% of those people said, ‘I bought’. But how much did they spend? On average, across that sample, $87. So that one event created $55 million worth of value in the market, and when you look at all the events, it was $343 million.
And [Monash Uni’s] Dr Sean Sands said, ‘I’m putting my name to this. It’s consistent with a whole body of evidence that’s emerging in research around retail and how channels are influencing’.
M: Going back to the idea of inspiration, I noticed on the Searchable Mall there are lots of curated lists and things – gift ideas, outfit suggestions and stuff like that. How much of an increase in investment is that for you if you’ve got a dedicated team to do that? Can you put some numbers around that and explain what it involves?
JB: So we have a content team that partners with our retailers. We have eight people currently and we expect that group to grow.
The real insight we had was about ‘help me find’. What we’re trying to do is increasingly ‘help me discover’.
This team’s role is measured on how many people connect with that content, then go through to make one of those web to mall or online sales-driving events.
The leader of that group was a publisher and a content producer on TV, and we’ve got people who’ve worked in magazines, digital bloggers… so it’s an eclectic mix of people who want to showcase retailer products and bring a curated content story around that. We’ve got a long way to go, we’ve got a long journey but we’re playing in that over the last six to nine months.
M: Does that link to advertising as well? I noticed that Westfield does some retargeting, because I’ve been retargeted to on Facebook…
JB: Good. We only retarget on stuff that you care about.
M: So when I look at specific products with specific colours and sizes I notice them coming back.
JB: Yeah. so we look at people who have gone on the site, exploring the content, but have not done an event that we’re convinced leads to a sale yet. So we try and get them there. We know they’re interested in this brand because they’ve gone in and searched and reviewed that content. We only do that to help our retailers drive sales in our mall.
It goes back to retail is not linear, it doesn’t happen in a sequence.
M: The other thing I wanted to go into was the other digital projects that Westfield is getting involved in. Can you run through some more of what’s in the pipeline; the other areas you’re investing in?
We have areas of significant platform-style investment, and then others that we’re piloting to create real innovation.
We have invested in two pilots very recently. One is ticketless parking, effectively a direct debit used in a carpark in a shopping centre if you’re over three hours. There are no boom gates, it recognises your licence plate number, and its a seamless, e-tag style experience and we just debit your card.
The second innovation that we’re piloting is what we call ‘Eat on Time’, at Westfield Sydney, which is a CBD location. Lots of CBD workers are trying to get their lunch quickly, they don’t want to queue. We’ve got the most productive food court in the country. This app aggregates all the food operators at Westfield Sydney, it puts their menus on an app. In my office or on my way, I can buy an item, it can debit my card, and I can dictate when I want that food ready for me to pick up. All of the stores in the food court have iPads, invested by us, and they get notifications of these orders. Some of them link into their point of sale and others use it as a parallel system of ordering.
Now let me move to platforms, and there are two that I want to share.
We’ve been creating a lot more digital interactive screen technologies into our malls, so in Sydney at Westfield Miranda, we’ve released three digital executions that are first of their kind in this marketplace. One, in our kids play world, we now have augmented reality screens. Kids can run and jump on the play world, but they also have this really big home entertainment screen, at kids’ height, and they’re playing games where they’ve got to bang the alien, find the koala – all those kind of augmented reality stuff. That’s becoming really successful and lots of interactions.
The second thing we did at Miranda was in the use precinct. You know those boring columns – we put all these screens around the columns, and we’ve created this really cool, urban street-style content, ambient style entertainment.
The other big platform is we are building the largest Wi-Fi network in the country in retail shopping centres. We now have got a model that we think is absolutely state of the art, but it means that shoppers will get free, fast, easy-to-use data, 1MB free for three hours on any browser, any carrier.
We’ve piloted this at Miranda and Garden City, and the takeup we’re getting has has blown us away. The dwell time that’s increased as a result of this service has surprised us.
It’s big news because it will be a big national network and it will create location insights and analytics that will fuel content to our customers on sign-up, and this is important, we’re not going to send them any content without strict terms and conditions and signing up for privacy. But the future of location, how that informs content, is a critical and exciting enabler for shoppers. It allows us to locate a subscriber within between five and 10 metres.
M: OK, that’s pretty close. So they’ll be spending a bit of time looking at a particular shelf and the next minute they’ll get a coupon deal or something?
JB: No, no, no, it’s less about interrupting the customer. What we’re interested in doing is a home page. You can choose not to do anything about it, but I know that as a shopper, that would be cool if I’m just getting, ‘Welcome back John to Westfield Bondi, here’s what’s happening’, and it’s all men’s fashion, food, cinema – stuff that I care about. But that’s further away.
M: How far off?
JB: It’s not in 2015.
M: So in 2016 potentially?
JB: Yeah. So we are going to be trialling how we help create relevant content and utility to our customers. if it’s not relevant, we don’t do it. We will not spam our customers, that’s very important. What Amazon and others have done in the online world through behavioural targeting will become possible in the future, but it has to be informed by location analytics, and Wi-Fi is a critical platform for that. It’s not a small investment, this is exciting.
M: So you see the location stuff as really the future of the experience?
JB: Many marketers over the last few years have been focused on online browse and online and offline transaction data. I believe in the future there’ll be profiles we build of customers that will be based upon their online browse and their offline browse, based upon location analytics. When we bring those together, we’ll be able to help our customers with content in the right context.
M: Sounds good, that’s a lot of exciting innovations.
JB: I really appreciate your interest.