Retailers shine at first real estate and technology conference

At CanTech, an Informa event and the first conference in Canada dedicated to the relationship between real estate and technology, a standing room only session on innovation in the retail sector was testament to its leadership in this realm.
The introduction of new software into retail is one of many retail technology trends described by Avi Behar, CEO & Broker, The Behar Group Realty Inc. He also highlighted the growing presence of kiosks, shopping as a social event, concept stores and introduction of the omni-channel by U.S. retailers.
QThru and Shopperception are two new softwares described by Behar. Q-Thru is a mobile shopping application that allows consumers to make a grocery store purchase with a phone and eliminates the need for a checkout. Shopperception studies purchasing behaviour by counting the number of times a shopper touches a product before buying an item.
7-Eleven still innovating after nearly 100 years
7-Eleven has seen a lot of change since its inception in 1927: it is the largest retail owner in the World with 50,000 locations; and the pioneer of the convenience store concept.
7-Eleven’s history of innovation is reflected in its real estate strategy, according to Caroline Bouillet, Director Real Estate Development, 7-Eleven Canada Inc., who was a panelist in the retail session.
A key strategic advantage for 7-Eleven is its demand chain management system called Tanpin Kanri, said Bouilett. It is an innovative way of stocking stores and meeting customer needs pioneered in Japan. The system was introduced when the chain’s most successful franchisee, which built over 9000 stores in Japan, bought a controlling interest in the company.
Bouilett described Tanpin Kanri as a customer centric retail program where the chain tracks item by item and store by store every transaction. Each store studies its customer’s behaviour and orders products according to what is sold. “We have very few dead items,” said Bouillett, “It keeps our inventory in store at a minimum and increases sales.”
7-Eleven manages 8 to 10 stores in a group from a central distribution centre. A unique inventory of products for each store coupled with different kinds of store layouts provides the knowledge for 7-Eleven to roll out a growing portfolio of community sensitive locations.

7-Eleven has different store types for different kinds of communities
A thousand stores were added to 7-Eleven’s portfolio in 2012. “Managing growth from the point of finding a store, to opening one, is a complex task that is made feasible with the use of technology to manage that process”, said Bouillett.
Historically, 7-eleven has entered a market by locating first “in the core of the city where we know we are successful and expanding outward from there.” While in the past ‘we used to wing it’, said Bouilette, now the chain’s head office in Dallas puts ‘a lot of science behind its location planning.’
7-eleven integrates demographics, market profiles and mapping of warehouse locations as well as other factors in determining where new stores go. It has become uncompromising in its decisions to put the ‘right store in the right place’ she said, and then to develop the site to meet the needs of the customer.
Omni-channel scares most retailers
Unlike 7-Eleven, which is continuing to grow, most retailers are struggling with how to manage the relationship between online purchasing and bricks and mortar retail, explained Jennifer Lee, Senior Practice Leader Deloitte Consumer Business Retail Practice, Deloitte & Touche LLP. “It is much more common to hear about retailers who are in distress,” she said.
Retailers are struggling with buying patterns where “consumers are pursuing a very non-linear route to a purchase,” said Lee.
Omni-channel retailing refers to how consumers decide where to buy based on a continuous brand and shopping experience across a range of platforms including television, catalogue, mobile Internet devices and computers.
For most retailers their catalogue, online presence and in store pricing and products is not aligned which creates an inconsistent experience for the shopper. The omni-channel establishes a predictable and consistent experience and “it is becoming the trend In the U.S.,” said Lee.
Omni-channel allows retailers to start selling in Canada before they have a location in the country with an online and mobile marketing and sales program, explained the Deloitte retail expert.
“U.S. retailers are shipping to Canada already. J. Crew sold $13-million in Canada before they got here” said Lee. “Other retailers such as Nordstrom and Macy’s have launched omni-channel retail programs and quickly experienced increased financial performance Lee added.
“The omini-channel scares the hell out of many retailers,” yet in spite of ‘the omni-channel phenomenon, there are Canadian retailers who continue to claim they “can’t make the business case” for this new approach said Lee.
Other commercial sectors lag
While retail has steamed ahead with adopting new technology the remainder of the commercial real estate has been slow to innovate. The industry has had other priorities particularly taking advantage of capital markets and financing opportunities to grow their businesses said Mario Barrafato, the senior vice president and CFO at Dundee REIT
Slate Properties, a Toronto based real estate and Investment firm, is an exception. Slate has a custom built web-based and ‘mobile friendly’ asset management system and database, called Tabula. According to Lucas Manuel, the Vice President of Asset Management, Tabula enables the management of Slate's 50 properties worth over $1-Billion with only 10 employees and an extended team of about 100 suppliers.

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