Episode 4: Why Commercial Property Groups Are Moving To A Data-First Mindset
As the digital transformation of retail continues, commercial property owners are beginning to feel the impact.
Max Ryerson, CEO and Digital Strategist at StratForce joins the podcast this week to discuss how this shift is impacting everything from rental premiums to tenant mix, and how by changing their approach to thinking about data, property groups can evolve with these trends.
Read the Transcript
John Rougeux: Hi everyone and welcome to another episode of People in Places. I’m John Rougeux, VP of Marketing here at Skyfii and your host for today’s episode.
John Rougeux: Our guest for today is Max Ryerson, who joins us from London. Max is the CEO and the Chief Digital Strategist at StratForce and today he’s going to talk to us about some of the things he’s learned in his 20 plus years of working with brands on customer experience and digital transformation. Max, I’m really excited for this interview today. Thanks for being with us.
Max Ryerson: Thank you very much, John, for having me. It’s a pleasure being here.
John Rougeux: All right, so Max, to kick things off, could you begin by telling us a little bit more about yourself and what you’re up to at StratForce?
Max Ryerson: Sure, let me see. So I have a very varied background. I grew up in Europe and worked and lived in the U.S. and a number of countries across the European region and then the last nine years in Australia and I’ve just relocated back to the U.K. So most of those moves were either for work or for pleasure, but mainly for work, chasing dreams.
Max Ryerson: I started coding when I was six and effectively, everything about the rest of my life has been really focused on digital and technology and how do we look at technology as empowering ourselves to improve our lives or improve customer experiences or deliver more value to organizations that I’ve worked for. So it’s a bit of a passion for me, and I’ve been very lucky to be able to do that my entire 22 years now of my career. And yes, it’s been a wonderful journey so far.
John Rougeux: That’s awesome. Before we dive into the meat of the interview today, I have to ask you, how did you start coding at the age of six? That fascinates me.
John Rougeux: Good stuff. Yeah, I have a few fond memories on the Commodore 64 as well, probably different from yours, since I wasn’t coding. But yeah, it was certainly an interesting time to kind of get involved with computers at that age.
John Rougeux: All right, so yeah, like you mentioned earlier, you’ve got over 20 years of experience in working with brands on digital transformation and customer experience. I’d love to hear a little bit more about some of the trends you’ve observed over those two decades of doing that work.
Max Ryerson: Yeah, I think what was fascinating is because I was there at the very beginning of the Internet and I started doing websites in fact back then, in 1996. And I think what’s been fascinating has been this absolute transformation from the Internet towards businesses. Because I remember in those days you would tell people, “I think you need a website,” and everything else, and they’d just laugh at you and go, “No, who ever needs that? You don’t need that.”
Max Ryerson: And I think just to see the evolution of, if you’re a business today, you’d be crazy not to have a website. I think that’s been fascinating and I think we’re going to see, we’re going to continue to see a lot of changes with Internet, obviously, capable applications and different businesses that’ll still emerge from the power that the Internet has delivered us. That’s been a fascinating journey to see and how that’s evolved.
Max Ryerson: I think we’ve seen some fundamental trends around that in terms of behavior, human behavior, and that evolution. And so as the older generations, I think, have come to try and use it and use all the services that are tied to the Internet, it’s been really interesting to see how they use it mainly for emails or doing some research.
Max Ryerson: And then as the younger generations, who were born into it, where it was always there, that’s just how it’s been, have a very different way of engaging with others. And also have a different take on things that are in their life and almost this microcosm of their society where the Internet’s there and services like Facebook are available and everything’s available on demand. And I can just buy something online and have it delivered. It’s almost like, “Well yeah, of course that’s the way it is.” There’s no thinking behind it and therefore when the mundane stuff that can be shopped for and delivered it’s not really a big deal. Whereas people like my parents, they make a list, they go to the shops, they do … It’s a very different thing. And I think that’s what’s been really interesting.
Max Ryerson: And along with that, you kind of look at what the impact is from a business to be able to engage with different people. And I think that’s also been fascinating, that’s another trend. So you have different groups of people who are of different generations who interact with a brand, because of technology, in a different way. And you also have this amazing power for a company or a brand to be able to interact now with different people and to understand how their marketing budget is being spent and what the return is and how impactful they’re being. Whereas before, it was very much, “Well, I’m going to spend $100,000 on a TV commercial and I really don’t have much knowledge of who is watching it and am I going to get my money’s worth,” or full page ads in newspapers, which used to cost $20,000 if you were advertising in the Wall Street Journal, for example, if you wanted a front page cover or something.
Max Ryerson: So I think that’s what’s been fascinating, is that from an advertising perspective, you can be much, much more precise and much more efficient with your money, with digital and the advent of the Internet. I think that’s been absolutely phenomenal. Yeah, I think those are the big, big trends I’ve seen.
Max Ryerson: And I think some of the things, as well, specifically around customer experiences has also been this tremendous shift driven by technology of, again, that idea that I should be able to get anything now. Most things should be free. And therefore from a customer experience perspective, you kind of need to be 24/7. You need to be online now all the time. And how do you satisfy those customers? And customers can now shop on their terms at any time, anywhere, for anything that they pretty much want. So yeah, that’s been fascinating.
John Rougeux: So earlier in your comment, you mentioned the emergence of, I guess you would say, the digital first generation, people who have been accustomed to using technology from a very young age, six or younger. And I know from your own experience, you also work very closely with businesses that have physical presences, so brick and mortar retail, shopping centers, and other verticals as well.
John Rougeux: So I’m curious, what’s your take on, some of these brick and mortar businesses, they’ve been … they have not really been digital first in many cases, because they’re decades old. So digital is something that they added later, years after their inception. What kinds of trends are you seeing in terms of how brick and mortar businesses that are primarily physical are engaging the digital first generation and some of the needs and interests you brought up about immediacy, 24/7 gratification, 24/7 support and other digital type experiences?
Max Ryerson: Yeah, it’s a good question. I think there’re different players in the ownership or the use of physical space and so you have some, call them groups, retailers or stadiums, venues, entertainment venues, that are probably a little bit more ahead of your traditional sort of landlords, whether it’s a shopping center or an office building or anything like that. I think it’s really interesting because I think you have, on one side, you have one group where they need to work the space, the space is critical to their business in terms of selling, Whereas a landlord is, and the landlords have been, commercial real estate has been traditionally quite behind. I think that’s just a nature of their business. Effectively, they care about rent. Rental income is what they … it’s about and you just kind of need to put somebody in the space.
Max Ryerson: I think in the office building, it’s always really interesting in offices, because people always ask, “How much can we do and what should we be doing?” And I think you need to put the core basics in place from a technology point of view. It’s impossible to predict what technology’s going to be around in 20 years time, because these buildings are going to last that long. But you’ve got to be able to set it up in such a way that you can practically evolve that infrastructure. But most of the cool stuff, shall we say, the user stuff, is going to be brought in by the tenant. So ultimately, office buildings don’t really … owners of office buildings, their business is pretty safe, because people are always going to want the space.
Max Ryerson: And even if we think about the freelancing economy and people who do that, yes, they might not rent out an office floor or even a suite or something like that. But people like WeWork, so these other businesses that have come along and seen an opportunity to service that freelance economy, they’re still going to take out that amount of space from the landlord. So the landlord’s not being that affected by digital transformation in that particular asset class.
Max Ryerson: I think that’s why commercial real estate in general has been slow to digitally transform, because their business, their core business, isn’t really being affected or disrupted like the rest of the industries. And I think we’ve finally got into a point now where enough industries around them have been disrupted digitally that it’s now having an impact on commercial real estate companies, and they’re now finally trying to really transform themselves into data companies or digital companies. I think in part they’re struggling. Some are doing really well, but some are definitely still struggling, getting their heads around what that means for them. I think that’s one group.
Max Ryerson: Shopping centers, for example, are a little bit more in tune to it, simply because retail has been dramatically impacted and the really smart retailers have really grasped that. So they really understand the benefit of physical space versus online and the combination of both. And also the fact that with that, they don’t necessarily need as much space. It’s a question of how do you utilize that space to create a great experience? And shopping centers are now … Owners are now faced with the fact that, well, fewer stores means vacant space. “How do I transform this physical space into something that’s still valuable?”
Max Ryerson: And the trick as well is that retail was the highest paying rent, so there’s a bit of an adjustment with not only rents coming down, because there is too much floor space, but then the types of tenants that go in aren’t going to pay you that retail premium, because you’re going to have to remix it someone … to make it interesting for somebody who’s visiting the center. There’s a combination of, from a commercial real estate point of view, an ownership point of view of these spaces, is, “How do I mix it to make it interesting enough to maintain the loyalty of these people who come and shop here for groceries and some fashion and so forth, while at the same time, I’ve got my customers, who are my tenants, my traditional tenants are now saying, ‘Well actually, a) I don’t want to pay as much rent anymore, I’ve got plenty of options on the market to go somewhere else and I don’t need as many stores.'”
Max Ryerson: That’s the great dilemma, and I think that’s where you’ve got this massive transformation occurring right now. And these companies are needing to transform to understand what to do with data, what to do digitally. And yes, they’ve been playing in this sphere for seven, six, seven, eight years now, but it’s been quite ad hoc, simply because the pressure has not been that real. And I think it’s now at that point and now they’re really trying to put in the right people, the right cultures, the right strategies to really evolve their businesses into the digital age, basically.
John Rougeux: Right, so you shared a lot of really valuable insights there. Just to recap though, I think what you’re getting at is, the tenants themselves, the retailers, in many cases, they were the ones who were first to invest in technology and changes and improvements to the customer experience because they were the ones who were directly interfacing with the customers and the revenue from their stores more directly affected their fortunes. Whereas the commercial property groups themselves were a little bit further behind in terms of investing in technology because for many years, they were focused primarily, or even exclusively, on rent and top line revenue and not really focused on what happened within those doors. But sounds like now, that’s starting to change.
John Rougeux: So I’m really curious. What are some of the specific ways that commercial property groups are investing in digital transformation in customer experience right now?
Max Ryerson: Yeah, I think across the industry, every group is now effectively looking at digital and trying to create a culture around that. So whether it’s training and facilitating up scaling the staff, which are very traditional in these organizations to really understand the benefits and the value of digital marketing, for example. But also, to start thinking about what we like to call data first. And looking at the data, there’s a lot of wealth in the data that they hold and it’s kind of going back and informing their decisions based on that. That is a base. I think everybody’s looking at that now and everybody’s moving that way.
Max Ryerson: And I think they start to look at, “How do we put in the right technology to support the new paradigm of customer experience,” which is 24/7. So whether it’s effectively having an email response, an online chat, or things like that, I think those are the basics that people are, everybody is now looking at or actually implementing.
Max Ryerson: I think it’s a question of how do we get to know our customers better? How do we get to know our shoppers better? How do we get to know our tenants better, to be able to service them better. Because I think that’s really where everybody competes and I think there is, at least in the shopping center space, most countries, the U.S., Australia, to an extent the U.K. as well, have too much floor space. So if you have tenants who now have so much more choice, it’s really in their hands. And therefore you need to compete on other things than just price. So rent and you need to be able to offer them service and an experience, a customer experience that they haven’t gotten from somebody else. So I think that’s really key and I think that’s how companies are starting to transform.
Max Ryerson: And then I think the evolution of that will be that we’ll look at data and data has the power to create new value. I think property groups will finally start to realize that their core business might be rental income, but there’s left or missed opportunity to not look at the data and see how can we use data to solve the pain points of our customers and therefore by doing that, develop or build a new product or a new service that we can sell on? And I think that’s where the future of digital works.
Max Ryerson: I think they’re going to start to look at, and most are looking at this already, but, “How do we start to use automation in terms of optimizing our internal process,” but also automation in the form of artificial intelligence, rolling out artificial intelligence customer bots, again, to service that customer 24/7, to answer their questions. There’s plenty of things like that, that I think commercial real estate companies are finally doing and they’re looking at them now, how far off are they to implement some of this more forward thinking technology. I think it’s probably still a year away until you start seeing everybody being mainstream.
Max Ryerson: Whereas we’ve already seen it with retailers, we’ve seen it with a number of brands. They’ve got customer service artificial intelligence chat bots on their website, on Facebook. They’ve been around for over a year. So again, the whole commercial real estate industry’s probably two years behind some of their tenants, effectively. I think that’s where companies are moving.
Max Ryerson: But the biggest issue is building the right culture. I think that’s the biggest challenge, not necessarily the technology but it’s actually the internal culture that needs to occur.
John Rougeux: Let’s dive into that a little bit further, because I think that’s … It’s a really interesting challenge, because it’s a little bit less tangible. Anybody can buy technology or buy software, provided that they have the budget. But making use of that technology, making use of that data, really doesn’t happen until you have a data-driven culture. And oftentimes, that’s more of a challenge than buying the technology itself. So what’s your advice for a company out there who’s maybe looking at investing in a more data-driven culture, but isn’t sure how to move forward with that effort?
Max Ryerson: Yeah, very good question. I think there’s a number of layers here. But the first one is to really, if you’re on the fence, to go well, “I’m taking a bit of a leap of faith and I’m going to transform my business this way.”
Max Ryerson: I think you can look at a number of industries where that’s happened, a number of companies where that’s happened. And there’s even been studies, whether it’s from Deloitte or PricewaterhouseCoopers or McKinsey, who have demonstrated that companies who do adopt a data culture have seen tremendous benefits. And when you look at some of the top executives in these organizations and how they talk about it, they say, “Listen, if you don’t have a data strategy, a data culture, you’re going to lose your competitive edge, and you might even just become extinct. Because this is what the world is moving to.” I think there shouldn’t be a debate anymore in terms of, “Should we do this, or not?” It’s a matter of, you need to do it. It’s a question of business survival, effectively.
Max Ryerson: I think the way you transform is, you really need to start to think about having a culture of data first. I think where you go there is that you might start small, you empower groups around data. I think you create data champions within your organizations and you really reward data based success. And that is a question of, one, training of your staff, to really look at a number of case studies, look at how data can be used in what they currently do. Start with some little experiments and go, “Okay, well, let’s look at this time, we’re making this decision, instead of just using instinct or past experience, let’s look at the data. Let’s look at what kind of data we have and what data we could use to solve this question or prepare this campaign,” or whatever that might be. And I think that’s where you start and see how you progress and see how successful you are in that. And step-by-step, you can start to transform bigger.
Max Ryerson: I think part of this overall transformation is that you go from being data first to thinking digitally. You need to study demand, so it’s a question of listening to your customers. And then you need to put in place a rapid experimentation culture as well, where you can rapidly prototype some of these things that you are discovering, as part of that transformation. And then ultimately, that leads to a transformation of the physical space.
Max Ryerson: But it’s easy for me to say this, and say, “This is what you’ve got to do.” And definitely, I think we’ve identified that there are five key challenges in creating a data culture.
Max Ryerson: One is identifying your data sources. So do you have enough data sources that the data combined can create value? If not, what do you need to do? Are they the appropriate sources? Do you have the right sources, or are they completely wrong? Then you need to look at the quality of your data. Is the data that you’re collecting of any quality and can be used? Then you need to look at the systems and processes that you need to put in place around data. And then you need to make sure that this data is actionable and being able to put that data to good use.
Max Ryerson: And then the fifth key is really changing people, which is the most difficult. And it’s really getting people to buy into it and to change their ways. It’s about also convincing management teams and employees. And that is essential in order to acquire buy-in to the long term value of insight gathering and the tools that make it faster and easier. That’s key.
Max Ryerson: So it’s a combination of mindset, training and technology combined, to really deliver that culture and be able to deliver returns on developing that culture.
John Rougeux: Good deal. I just want to recap those five points you mentioned, because I think those are a nice tangible takeaway for today.
John Rougeux: I think one was data sources, two was data quality, the third was systems and processes, the fourth was making the data actionable and five was changing people. I want to hit on that last point a little bit.
John Rougeux: Just to play devil’s advocate a little bit with you, Max, let’s say this all sounds really good to me. I’m running a shopping center or a commercial property group. But when I look at my team, I find that I just don’t have the capacity. I’m not sure that I’ve got the skill set internally. How do I make the decision about, “Do I hire new people, do I retrain my employees, do I bring on a consultant or a services team?” How do I look at that decision matrix and proceed?
Max Ryerson: I think, obviously, you don’t want to replace all your people and bring all new people in. But I think ultimately, this is where a number of companies in the past have failed. They’ve brought in, and this is across pretty much every industry, when everybody was just like, “Okay, well yeah, this thing digital, we need to do something about it. We don’t really know what, but we think we need to do something.” So they hired digital people and digital experts internally and they brought them in. But they were usually just one person amongst a huge organization that was quite traditional. And I’ve got a number of examples of companies that have done this, from banking to real estate to others.
Max Ryerson: So you bring somebody like that inside and you think, “Great, we’ll be able to do things.” But traditionally, these companies are still quite scared of change. They don’t want people to come in and rock the boat. But they want to be able to say, “We’re doing something about digital.”
Max Ryerson: So unless you’re going to support those people and you are enabling them to build a team, because by themselves, they can’t transform your entire organization, even with buy-in, they still need some people, and that may be a bit too daunting. Therefore it’s a question of don’t bring a unique person in and think that it’s going to solve your problems. You either bring them in and you bring in a team with them, or you bring in an external company that can come and help you, or you outsource it for awhile, until you get comfortable and you understand the value of this. And then you can start slowly being able to train your existing staff, with some external help. And then internally, you bring somebody on, once you’ve reached that next level. Because then the people inside the organization will understand what that person’s coming in to do and speak their language a little bit more.
Max Ryerson: And then you can start to build governance and capabilities internally, as part of a team that supports the rest of your staff, because your staff has undergone this initial training as well. So it’s a question of retraining people who are currently in the organization, while bringing in additional resources to support that, and ultimately putting in a new framework around being data first and having a digital culture. And you need the help of external providers to get you on that journey, is my belief.
John Rougeux: So the biggest mistake you’re trying to help our listeners avoid is this idea of just hiring one person to come in, and with the expectation that they’re going to transform the organization on their own.
Max Ryerson: Absolutely no.
John Rougeux: Okay, and so it sounds like to do that, you either need to bring in a team to support them or look at finding some external resources who can come in with that expertise and start making some recommendations and transformations a little bit earlier on in the process.
Max Ryerson: That’s right.
John Rougeux: Max, this was all really helpful today. I wish we had more time for our interview. I think we can … We could probably spend another hour or two talking about this today.
Max Ryerson: For sure.
John Rougeux: But I do want to leave our listeners with one specific, tangible takeaway they can leave the show with today. So I know you’re a lifelong learner. You’ve probably read a ton of books and listened to plenty of podcasts and other resources. If there’s one specific resource that you’d recommend in terms of digital transformation or customer experience, what would that be?
Max Ryerson: One of my teachers, David L. Rogers, who is at the Columbia Business School, wrote a book called The Digital Transformation Playbook: Rethinking Your Business For The Digital Age. It’s effectively my go-to bible. It’s absolutely fantastic and it’s got a lot of case studies, a lot of different examples across a lot of different industries, but David really takes you through what it’s like to operate in the digital world and all the different changes that have occurred. What are platform companies, cutting out middle man, so forth and kind of rethinking the whole marketing funnel, rethinking customers. He talks a lot about the customer network and how to build strategies around your business to succeed in the digital age.
Max Ryerson: I would highly, highly recommend his book.
John Rougeux: Good deal. Thanks for that. We’ll be sure to include a link to that in the show notes. Max, if one of our listeners wants to get in touch with you, what’s the best way for them to do that?
Max Ryerson: Yeah, best way, either by email, email@example.com. I’m also on Twitter @maxryerson. So I think those are probably your two best ways.
John Rougeux: All right. Well Max, thanks again for being with us today. It was a real pleasure. I really enjoyed the conversation.
Max Ryerson: Thank you, John. It was a pleasure being here.
John Rougeux: All right, well just a couple more things before we go today. First of all, if you found Max’s advice helpful, please head to iTunes and leave us a five star rating, or even better, a short review. It would mean so much to us. Secondly, if you have an idea for the show or a guest you’d like us to interview, send us a note at firstname.lastname@example.org. That’s email@example.com.
John Rougeux: Okay, well that’s it for today’s episode of People in Places. I’m John Rougeux with Skyfii. Thanks again for being with us. We’ll see you next time.
People in Places is a podcast dedicated to helping today’s shopping centers, retail outlets, airports, museums, universities, and other physical locations optimize the experience of their visitors. Get in-touch: firstname.lastname@example.org. See all current episodes on our website here.
- The book Max references as his “go-to bible” is The Digital Transformation Playbook: Rethinking Your Business For The Digital Age, by David Rogers.
- You can get in-touch with Max on Twitter, or by emailing him at email@example.com.