Research sheds light on how developers, owners and managers approach the challenge of new technology.
Shopping Center World's 2000 e-commerce survey paints a picture of the way developers, owners and managers use technology to boost the bottom line.
That portrait contains plenty of contrast: While some companies spend thousands on advanced technology strategies, others are content to publish a few paragraphs on a home page.
Nearly half the respondents maintain a website of one kind or another. But the survey shows that investing in the Internet continues to be an uncertain endeavor for shopping center executives. Few respondents indicate that their website has increased shopping center sales, for example.
And despite hype about the threat of online retail, only 1% of respondents report any decrease in traffic as a result of e-commerce.
Why all the focus on technology, then? Clearly, the industry believes in technology's potential to save money and time. More than half the respondents now use online services geared toward commercial real estate, and of those who are not currently using such services, 33% plan to use one or more in the next 24 months.
SCW's first e-commerce survey shows an industry grappling with the challenge of how to best invest in technology. The survey results should help our readers better understand the attitudes and approaches being adopted by their peers. In the Information Age, the best decision-making tool is information itself.
`What is the title of the person in charge of your company's technological issues?'
- Chief Technology Officer (7%)
- Chief Information Officer (19%)
- Other (24%)
- President, Partner, CEO or Owner (16%)
- Controller or CFO (5%)
- Vice President (6%)
- None or N/A (6%)
- No Answer (18%)
The survey showed that one-fourth of respondents' companies now employ either a chief technology officer (CTO) or chief information officer (CIO) to take charge of technological issues.
Respondents' companies that have invested $50,000 or more into their e-commerce initiative are more likely to have a CIO or CTO than those whose companies have invested less than $5,000 (59% and 17%, respectively).
Respondents whose companies have a website are more likely to have these officers in their company than those with no website (31% and 20%, respectively).
One in 20 respondents indicates either that the company he or she works for does not have someone in charge of technological issues or that the question does not apply.
`Was your website developed in-house or was it outsourced? Is your website maintained in-house or is it outsourced?'
- Developed by outsourcing (43%)
- maintained by outsourcing (32%)
- developed in-house (29%)
- maintained in-house (49%)
- developed by combination (26%)
- maintained by combination (17%)
Respondents with websites most often outsourced their development. Nearly half of respondents (49%) indicate their company has a website. However, website maintenance is most likely done in-house.
The shift to maintain sites in-house came partially from companies that outsourced development and partially from companies whose website was developed through a combination of in-house work and outsourcing. 25% of companies that outsourced their website development now maintain the site in-house. 40% of companies whose website was developed through a combination of in-house work and outsourcing now maintain the site in-house.
Nearly all respondents whose companies developed the website in-house also manage the site in-house.
Interestingly, the likelihood of outsourcing website development and maintenance is not dependent on the dollar amount invested in the e-commerce initiative. Meanwhile, only 8% of respondents say they have experienced technological problems with their website.
`Approximately what dollar amount has your company invested into its e-commerce initiative?'
- $1 million or more (3%)
- $750,000 to $999,999 (1%)
- $500,000 to $749,999 (1%)
- $250,000 to $499,999 (3%)
- $100,000 to $249,999 (7%)
- $75,000 to $99,999 (3%)
- $50,000 to $74,999 (5%)
- $10,000 to $49,999 (20%)
- $5,000 to $9,999 (17%)
- Less than $5,000 (24%)
- No answer (%17)
Respondents' companies have invested a median $11,200 into their website initiatives, with 37% indicating that their website has already begun to pay for itself. The remaining respondents express varying expectations as to when they predict a return on their investment.
`What is your company's website designed to accomplish?'
- Image site only (56%)
- Used to drive people to centers (46%)
- Used to conduct e-commerce (26%)
- Other (18%)
- No answer (1%)
Most respondents indicate their website was designed for image purposes. Companies that invested $50,000 or more into their e-commerce initiative are more likely to use their website to drive people to their centers (70%). They are also more likely to conduct e-commerce (39%) than those who invested less than $5,000. Of the latter category, 32% use the site to drive people to centers, 20% use the site to conduct e-commerce.
`Have you seen any concrete evidence that your website has increased shopping center sales?'
- No (78%)
- Yes (14%)
- No answer (8%)
Overall, 14% of respondents indicate they have seen evidence their website has increased shopping center sales. Respondents whose site was designed to drive people to centers or to conduct e-commerce are more likely to have seen an increase in sales (22% and 23% respectively).
Respondents who have invested $50,000 or more into their site are more likely than those who have invested less than $5,000 to have evidence of an increase in center sales (24% vs. 5%).
When asked if they have seen a decrease in traffic to their centers that can be directly attributed to e-commerce, only 1% of respondents said "yes."
`Do you capture demographic information from visitors to your website?'
- Yes (31%)
- No (63%)
- No answer (6%)
Nearly one-third (31%) of respondents collect demographic information on their websites. Respondents whose site was designed to drive people to centers (49%) and those whose site was designed to conduct e-commerce (44%) are more likely to collect demographic information from visitors to their site than those with an image site only (27%).
`Which of the following are located on your website to drive people to the centers?'
- Information on retailers in center (46%)
- Links to retailers' websites (25%)
- Information on sales/discounts at center (21%)
- Coupons (15%)
- Specialfound on website (15%)
- Other (12%)
- None of the above (36%)
- No answer (10%)
Respondents are most likely to have information on their retail tenants included in their website. Overall, 84% of respondents whose website is used to drive people to centers have one or more of the listed features on their website. 78% of these respondents have information on retailers in their centers and 43% have links to retailers' websites.
Those who have invested $50,000 or more into their website initiative are more likely to have one or more of the listed components as part of their website than those who have invested less than $5,000 (69% vs. 32%).
`If your company has an intranet, what features are included on this site?'
- Company contact information (78%)
- Financial data/other company records (56%)
- Property management updates (52%)
- Lease tracking (44%)
- Links to other company-related websites (23%)
- Links to business partners' websites (17%)
- Project construction tracking (17%)
- Virtual tour channels (7%)
- Other (5%)
- No answer (3%)
Three in ten respondents indicate their company has an Intranet. The majority of these intranets include company contact information. Respondents whose companies have invested $50,000 or more into their e-commerce initiative are more likely to have an intranet than those who invested less than $5,000 (70% and 34%, respectively).
Additionally, 15% of companies that do not have a website do have an Intranet.
Companies that do not have a website are more likely than the average company to have financial data or other company records included on their intranet site (78% vs. 56%).
Companies who use one or more online services are more likely to have an intranet than those who do not use these services (38% and 22%, respectively).
`Do you currently, or do you plan to, have discussions with retailers on how to work together with your e-commerce initiative in a way that will benefit you both?'
- No (58%)
- Planned for discussion (20%)
- Currently in discussion (14%)
- No answer (8%)
One-third of respondents now work with retailers on e-commerce initiatives, or plan to do so.
70% of respondents whose companies have invested $50,000 or more into their e-commerce initiative are currently in discussions or have discussions planned with retailers in an effort to work together to benefit both companies.
Respondents whose companies have invested $5,000 to $49,999 are less likely to have discussions in progress or planned (37%), as are those who have invested less than $5,000 (31%) and those who do not have a website (22%).
Respondents whose companies own or manage regional malls are also more likely to have discussions in progress or planned (61%).
`Do you currently use, or plan to use in the next 24 months, the following online services?'
- Demographic: 33% use
- 17% plan to use
- Property listing/leasing: 29% use
- 13% plan to use; Property management: 11% use
- 10% plan to use; Project/construction management: 5% use
- 9% plan to use; Lending: 2% use
- 7% plan to use
- One or more of the above: 53% use
- 35% plan to use
- None of the above: 50% use none of the above
- 65% plan to use none of the above
More than half of respondents currently use one or more of the listed online services. Online demographic services and online property listing/leasing services are used by the largest percentages of respondents. Of those who are not currently using any of the services, 33% plan to use one or more in the next 24 months.
Respondents whose company has a website are more likely to use one or more online services than those without a website (67% and 40%, respectively). Respondents whose website is used to conduct e-commerce are the most likely to use one or more online services (80%).
`To what extent have online property listing/leasing services changed your dependence on traditional?'
- Has not changed (79%)
- Slightly reduced (6%)
- Greatly reduced (1%)
- Other (2%)
- Did not previously use brokers (6%)
- No answer (6%)
The majority of respondents indicate the use of online listing/leasing services has not changed their use of traditional brokers.
`What service providers do you use for online listing/leasing?'
- Loopnet.com (57%)
- Storetrax.com (14%)
- Propertyfirst.com (13%)
- NAIDirect.com (2%)
- Tenantmix.com (2%)
- Other (29%)
- No answer (13%)
Loopnet.com is the most used service provider of online listing/leasing.
`Have the fluctuations in Internet stocks changed your opinion about the viability of dot.coms that serve the real estate industry?'
- Yes (18%)
- No (73%)
- No answer (9%)
Nearly one in five respondents has changed his opinion of the viability of dot-coms that serve the real estate industry as a result of fluctuations in Internet stocks.
Many of those whose opinion has not changed indicate they were previously skeptical about the viability of these companies.
About the survey Methodology, data collection and analysis for the 2000 E-commerce Survey were conducted by Intertec Publishing Corporate Planning and Research. A total of 2,000 surveys were mailed to builders, developers, owners and managers who subscribe to Shopping Center World.
As of August 18, 497 completed surveys were returned, resulting in an overall response rate of 25%. Responding companies own or manage a median of six stores, with nearly 24% owning or managing more than 20 centers. The median portfolio size is 589,000 sq. ft., with nearly 39% owning or managing more than 1 million sq. ft. Most respondents own or manage neighborhood centers.
The survey contained a total of 33 questions on such topics as the cost and functionality of company websites; the use of online services geared toward commercial real estate; opinions on tech stock fluctuations; and the effects of Internet sales tax laws on the shopping center industry.