While e-commerce firms may have won over investors, the vast majority of Indians are still shopping offline. Large offline players such as DLF know this all too well, and now see an opportunity to drive more sales by using technology. Interestingly, this involves bringing a bit of the e-commerce experience to the shopping mall.
Real estate major DLF, which owns four shopping malls in Delhi-NCR listed under different subsidiaries such as DLF Emporio Ltd, has deployed what it calls a ‘Phydigital’ strategy – a form of online-to-offline (O2O) play. The firm is combining emerging technologies such as Internet of Things (IoT), cloud and Big Data analytics with machine learning to boost footfalls.
The first step of this O2O strategy saw DLF forming partnerships with banks last year. It tied up with State Bank of India (SBI) and ICICI Bank to incentivise shoppers via cashbacks. Instead of offering customers loyalty or credit points from individual stores, the company started offering cashback on a customer’s total monthly spend in their malls, says Harshvardhan Chauhan, central head of marketing at DLF Shopping Malls.
This was made possible by a partnership across DLF’s leased stores that allowed access to 35,000 point-of-sale (PoS) machines, which detected customers transacting with SBI or ICICI cards.
This also enabled DLF to get some insights into consumer spending behaviour across other banks.
Technology to the fore
The next step was to strike more alliances with technology companies specialising in areas such as consumer insights and database management, apart from capital-intensive investments in deploying new hardware across its malls.
“Since we are not a technology firm, we had to get into partnerships with companies in order to design the fabric of our digital strategy including payments,” Chauhan says.
This included laying down IoT-based sensors across 16.6 lakh sq ft in DLF’s malls, tying into its aim of understanding consumers better from the second they enter the mall till the time they exit.
In fact, the IoT sensors kick in as soon as customers parks their vehicles or walk through the doors of the mall.
“The sensors are looking at identifying your mobile phone either via WiFi, cellular or Bluetooth signals,” Chauhan said.
DLF then gets valuable insights from customers’ mobile phone data points and heatmaps from cameras on the places they have visited, where they have swiped their cards and the time spent before leaving the mall.
This is akin to insights gathered by an e-tailer when an online shopper signs into their app and browses through the inventory.
While some of these metrics such as a consumer’s trajectory inside the mall would be only available to DLF’s Shopping Malls division, most general metrics would be passed onto stores on a real-time basis with more insightful reports generated either on a fortnightly or monthly basis.
These insights, according to the marketing head, would help stores take action such as offering discounts or starting/ending sales.
“The level of marketing can be very pointed with these insights. They can offer discounts on particular products,” he added.
And in case you were wondering about the privacy concerns surrounding these practices, Chauhan said the consumer data is anonymised under General Data Protection Regulation (GDPR), the European Union’s privacy law.
Chauhan says that Phydigital’s architecture is “revolutionary”, formed by a series of connections between technology products and solutions.
“While Minodes helps us with IoT-driven data, Hogarth helped us with product development in terms of software interfaces for us and the stores,” said Chauhan. “Alibaba helped us with database management systems by helping us generate insights from data lakes that we formed after gathering data from multiple sources including Minodes.”
The data collected and stored in data lakes is processed through predictive algorithms and machine learning to offer actionable insights that would help the DLF division and stores better understand consumers.
So while DLF and its stores are clearly benefiting, what’s in it for the consumer? Chauhan says DLF’s mall division has developed an app called Lukout.
Once a users consents, Lukout can personalise the shopping experience further.
Via the app, whose interface is along the lines of the iOS App Store, brands can target their audience with aggregated content from their virtual storefronts and also offer discounts to customers directly.
This means that users can see catalogues of different stores and brands just like they would on an e-commerce app or website. In addition, they can also find out about offers and discounts even before visiting the mall.
“With all the insights that we provide the stores, they have a web interface via which they can push offers and discounts to their customer similar to a Facebook digital campaign targeting the age group, city and other criterion,” Chauhan says.
The app is intelligent enough and programmed in such a way so as not to bombard the customer with offers but to match his interests to a select few deals.
Chauhan thinks this could give proximity and personal marketing a new meaning.
“Our stores can now offer more direct offers in the future instead of mass discounts which will not only save money for them but also increase sales or conversions,” he says.
And then of course there is the added bonus of getting the product immediately.
He also said that DLF was speaking to payment companies and startups to make shopping experiences smoother so that people don’t have to wait in queues.
The app also has other features built into it like a concierge service, and a medical and security service, among others.
“The consumer app will always be free. However, if you are wondering why we are offering data analytics to our stores for free, then the clarification is simple. We have an agreement with our stores to share revenue that they earn. If we help them grow their revenue, then we get a larger share and our revenue increases,” Chauhan says.
According to Chauhan, early evidence indicates that this strategy is already reaping benefits.
“In a beta test, we have seen that the repeat customer number has gone up by 18-20% and conversions have gone up by 20-25%. That translates to a direct increase in revenue by 17-18%,” he said.
DLF is looking to achieve a digital reach of 9.8 million consumers and acquire 3.8 million consumers on the Lukout app by 2020.
Chauhan did not reveal how much money DLF had pumped into its Phydigital project, but said that the company expects a 1.5x return on its investment.
DLF also has a phase-wise plan where it wants to bring about further integration and personalisation.
“Imagine you are customer waiting for your coffee from Starbucks and there is a Shoppers Stop right next to it. You might get a notification on your phone saying that for the next hour, you can get a discount on certain brands,” Chauhan says, adding that these future offers will be pushed directly via DLF and not the stores themselves.