NewMark Merrill: AI, Automation Will Benefit In-Person Retail

Automation is not only here to stay — it’s here to make the tasks of owning, operating, marketing and leasing a shopping center easier. That is the view of Sandy Sigal, chairman, CEO and president of Calabasas, Calif.-based NewMark Merrill Companies.

“I see automation as a net positive,” he explains. “The efficiency level inside shopping centers is going to go way up. Customer satisfaction levels are going to go way up too.”

Sigal envisions a future where personalization, driven by artificial intelligence (AI), transforms the shopping experience, offering tailored recommendations and directing consumers to relevant promotions. Sigal also emphasizes the potential for AI to streamline backend processes, from lease negotiations to site acquisition, significantly reducing timeframes and enhancing agility for businesses.

Catering to the Customer Plus AI Approaches to Gauging Retail Sentiment

Sigal believes the potential of automation accelerates exponentially when paired with AI. Scheduled and customized communications with customers, shopping center data analysis based on retail traffic and automated advertising are all arenas where AI can save time and offer customers an improved experience.

Streamlining the shopping process also frees up staff, allowing them to move away from easily automated administrative tasks and toward more customer-centric encounters.

One of the biggest innovations Sigal is keeping an eye on — literally — is smart glasses. These devices can be equipped with audio, video and photo functions, as well as augmented reality capabilities.

“AI already feeds our brains,” he says. “With AI-enabled glasses, you create the concept of mixed reality where, in a shopping setting, you can walk down an aisle and have your preferences in terms of size, color and style, indicated for you. You can walk by a store and be directed toward a flash sale.”

Sigal cautions that some customers may be concerned about privacy in the rush to automate the retail world. However, Sigal thinks the benefits to consumers will ultimately win out.

“Customers can cut themselves off by not sharing information, but the benefits they’ll receive will be so compelling that they won’t want to,” Sigal adds. “The reality is that if the technology knows the customer — that he wears ‘X’ size and likes blue and comes by this specific store all the time — then AI can easily figure out how to market to him. It can send him avatars that look like him. That world is going to be really incredible — a little bit weird when it knows too much — but that hesitance will pass generationally as AI proves itself useful.”

The next frontier for retail will likely integrate existing tools for measuring customer sentiment and gathering data into an AI approach for streamlining retail, says Sigal.

AI programs can easily assist with monitoring customer sentiment on platforms like Facebook, Google and Yelp to understand customers’ feelings about the shopping experience. These programs can collect data from separate sites and compile and analyze real-time feedback for shopping center owners. The technology can easily detect trends in surveys, questionnaires and other forms of customer feedback to gauge perceptions of security, cleanliness and responsiveness.

NewMark Merrill already gathers anonymized consumer data from centers via geofencing, phone data, Wi-Fi and cameras. This generalized data gives insight into customers’ origins, destinations, shopping habits across channels and facial expressions. Sigal looks forward to the next natural automation step in this process: using AI to create useful reports that are easy to share with merchants to help improve the customer experience and shape overall retail center strategy.

Accelerating Activity

Though the benefits of AI and automation for customers are exciting, Sigal also perceives great promise in what these items can do behind the scenes. Lease negotiations, risk assessment, accounting, marketing, site acquisition and more. Sigal sees no end to the potential.

“Today, from the time we get a letter of intent (LOI) to the time we get a signed lease is about three months,” Sigal notes. “From there, we draw up plans and the city review takes another four months. Then another four months to move in. In all, it adds up to about a year between ironing out deal terms and opening a store.”

There is an entirely different “reality,” Sigal argues, when AI can reduce lease negotiations to weeks instead of months. Steps like market reviews, retail planning and producing custom, 3-D printed parts could be AI assisted and supervised by human experts, cutting down greatly on time invested.

“How agile does that make companies?” Sigal asks. “You can improve spaces, enhance the economics of any business and reduce carrying costs.”

Even the lead time for creating NewMark Merrill’s leasing videos has been reduced from a month to just 10 minutes, thanks to an AI-enabled app. This app requires minimal input and utilizes data scraped from uploaded leasing brochures or property websites to automatically generate custom videos. These videos feature AI-generated copy and a voiceover, which are integrated with photos and videos of the property to effectively highlight its features and assets.

Then there’s black swan events like COVID and the resulting breakdowns in staffing and supply chains. Sigal believes taking human emotion, logic and proclivity for errors out of that equation via AI would have allowed shopping center owners to act more quickly, accurately and efficiently.

“We have access to real-time data,” he explains. “If you throw AI and automation toward operating a shopping center with certain protocols, you can quickly determine how much staff you need and where to staff them, how to best implement safety restrictions, which locations to open and close based on reports, as well as the best way to handle transportation in terms of cars and deliveries. Many of these considerations could easily be used to streamline operations today.”

For all the benefits, Sigal does acknowledge that new technologies and ways of doing business aren’t always well received. Technological failures are also viewed under a harsh microscope, in his opinion.

“There is a lot of inertia in this whole system,” he says. “That unwillingness to change will be a tough battle to fight, but one where the end result will change our business for the better.”

While challenges may arise, Sigal remains steadfast in his belief that the benefits of AI and automation will far outweigh the drawbacks, ushering in opportunities and innovation for the retail sector. As the industry continues to evolve, Sigal sees the ultimate role of AI as producing a more dynamic and adaptive retail landscape.

By Nellie Day. This post is posted as part of Shopping Center Business’ Retail Insight series.

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