Oscar García Marín, Commercial Director at Book A Corner, shares his perspective on the industry and the steps retailers are taking to get ahead in this new context we are facing worldwide. He states that, nowadays, the focus is on preserving the cash flow and securing financial visibility and, once these objectives are met, companies will focus on adapting to the new reality and the transformation of their business model to suit new consumer needs.
Which are the real challenges the commercial real state will face after the pandemic?
OGM: The rules have changed and the KPIs that technology allows us to apply at present let us start different conversations between retailers and tenants. Therefore, we should consider and apply this when working with new technologies.
The traditional model and the relationship between tenants and landlords should also change. In other words, there will be a transition from pure renting contracts to management contracts where profitability, success and failure will be measured with a different set of variables, and the contractual relationship will transform into a management contract.
And what happens to retailers?
OGM: It is evident that the Covid-19 pandemic has been a change accelerator and there is a clear need to digitize productive processes. At the same time, incorporating new technologies has become mandatory.
Companies should not ignore these facts now, even though it is true that retailers have learned better and faster these lessons on change. In fact, they take into account their knowledge on consumer preferences to increase sales and to go back to the context before the pandemic as well.
Today, we see that retailers and landlords talk in different languages, and I consider it is important to help them converge towards process digitization, implementation of new technologies and use of the same information. It is clear that, although sales will depend on how we approach consumers, the footfall will take a little longer in going back to normal.
“retailers and landlords talk in different languages, and (…) it is important to help them converge towards process digitization”
Marín asserts that companies must change their cost structure and investment on technology, which is no longer an option. Consequently, productive and digitization processes must also change. This translates into a deep change in the business model of the company.
Are CRE companies incorporating digital processes and toolkits to their structures?
OGM: It is safe to say that retailers are ahead of real estate, even though it should be noted that important changes are beyond digital tools: they have to do with internal processes and team structure.
We have discovered that transparency or access to information are not differential advantages; it is both a change of mindset and adaptation to new technologies what allows us to apply new tools and internal processes to the daily work and the business model, aiming at providing added value to the proposal for our clients.
“important changes have to do with internal processes and team structure”
Which are the most disruptive solutions we can find in the market?
OGM: The market presents infinite disruptive solutions, start-ups, and advanced and interesting innovation projects. It is true that technology is important provided we understand the business and we adapt to its real needs. Thus, the added value is not technology, but its use: how we use the tools and how we fit them into our business model. This is, without doubt, the key to success and it is where all companies should devote their efforts —finding something that brings a solution or provides a value to their business proposal.
“the added value is not technology, but its use”
There is no doubt that the reality of the industry is changing. In a context as dynamic as the one we are experiencing today, it is fundamental to maintain an open posture and be willing to adapt to the new needs that this generates in customers. With this in mind, technology is an exceptional tool for helping us make the process of renting spaces and accessing information more optimized and flexibleted. Besides, technology allows businesses to offer more transparent information, as well as putting it in order and reducing the learning curve for young partners.
To learn more about the role data has in this new context, the impact of e-commerce and selling channels, and more aspects of the new business model, watch the whole interview in the following video.