By Esther Fung 

Shopping malls are going high-tech.

Making technology investments to improve customer experiences has traditionally been the domain of retailers, which have introduced robots, touch-screen mirrors and virtual-reality goggles to attract shoppers to their stores in recent years.

But as pressure from store closures continues to mount, some mall landlords also are pouring money into technology, investing in mapping functions to help shoppers find parking spaces, navigate mall corridors or check out a flash sale at a store one floor above.

The goal: to better connect with shoppers in hopes of sparking more activity -- and possibly giving themselves an edge in lease negotiations with retailers.

"There is one collective bucket of benefits, which is really about how to improve customer experiences whether in our own digital assets or in the shoppers' car, mobile phone or watch," said Scott Morey, executive vice president at General Growth Properties Inc., the second-largest mall operator in the U.S. by number of properties.

Investment from mall owners is also fueling a cottage industry of technology startups peddling software and services that create interactive mall maps and mobile advertising, as well as assist in real-estate maintenance and security operations.

Jibestream, a firm that creates interactive mall maps to guide customers from store to store on their mobile phones as well as help them find parking, has rolled out its technology to hundreds of malls run by Westfield Corp., General Growth and Dubai-based shopping mall owner and operator Majid Al Futtaim.

"When driverless cars are available, how will they find your mall and how will they find parking? We'll integrate mapping with the real-time parking system and make sure where we're guiding people is closest to where they are going inside the mall," said Chris Wiegand, CEO at Jibestream.

Other vendors are offering ways for landlords to better analyze foot traffic in malls, a key metric cited by landlords and retailers as online shopping continues to gain traction and pose greater challenges to bricks-and-mortar stores.

Mall owners, who are focused on leasing out their properties and charging the highest possible rents, are constantly in need of more precise methods of calculating the number of visitors to their malls and how they behave.

"We're bringing the same analytics Amazon used to crush bricks-and-mortar retailers into the real world," said Sage Osterfeld, chief marketing officer at Palo Alto, Calif.-based Sysorex.

The data analytics firm uses a real-time location technology that measures the number of visitors and their dwell times in various parts of the mall using Wi-Fi, Bluetooth and cellular data signals emitted by cellphones.

By tracking the cellphone signals in a mall, companies can study the paths visitors take as well as how effective display windows and in-mall advertising are in drawing customers.

This is similar to how Amazon.com is able to measure user engagement by how long cursors hover over a certain part of a webpage, said Mr. Osterfeld. The technology is able to distinguish between visitors and staff, and provides insight as to which storefronts are most popular and which retailers have customers that fan out to other stores in the mall.

For instance, Apple Inc.'s stores are a huge draw for shoppers, allowing the tech giant to bargain for lower rents. With this technology, mall owners will have data regarding how many customers head straight for the Apple store and then leave without cross-shopping at neighboring retailers. This could help to put the floor on rent negotiations.

"Mall operators and developers are very interested in using data for their advantage in the same way online retailers have been using data," said Sean Harrington, chief operating officer at Sensity Systems Inc.

His Silicon Valley-based firm offers smart lighting and sensor data services that reduce energy costs with added security features for mall owners. The largest U.S. mall owner, Simon Property Group, has tapped Sensity's technology for its Brea Mall in California to improve parking lot lighting, helping illuminate areas that were too dark for shoppers to find their cars at night.

Some larger mall owners also are investing in startups and developing their own technology teams to build more intelligent infrastructures. Simon's venture-capital arm, Simon Venture Group, invests in retail technology, while Australia-listed Westfield built its own Westfield Labs in 2012 to address issues on how to embed digital technology in their projects.

But for landlords who are trying to catch up, it could be daunting to ferret out which investments might deliver.

"Retailers have been more advanced and sophisticated at embedding technologies into their business for a long time and landlords have been a bit behind," said Melina Cordero, CBRE Group chief of retail research in the Americas. "It can be confusing for landlords to understand -- it's new technology, new methods of doing business."

Write to Esther Fung at esther.fung@wsj.com

 

(END) Dow Jones Newswires

June 07, 2016 05:44 ET (09:44 GMT)

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