Howard Honickman covets your retail. The executive vice president of Newstar Technologies, Inc. of Ontario, Canada, wants to mine it, scrub it, condition it, transform it, import it and store it - all in the quest to make retail information more useful and ready for decision making.
"Nowadays, there are questions posed by asset managers and owners that cannot be easily answered - even a simple one like what was the dollar value of shoe sales across the entire portfolio - by using just a property management system," says Honickman. "It's become more complicated. Say an asset manager has 10 shopping malls, each with a different reporting system. `Men's shoe sales' is a line item on one and `male shoe sales' is an item on another. Even though it's the same thing, a computer would see them as two different lines."
Because of this, Honickman says, retail data today must be equalized on common footing, particularly since property managers either use different software programs or implement the same one inconsistently. "The way information should be analyzed is using a data warehouse, so you can compare apples to apples," continues Honickman. "When the data is sent to the `warehouse', it comes in as apples, oranges and bananas. A properly built and configured data warehouse will convert and transform it all into apples so information immediately becomes comparable for analytical purposes."
The data warehouse is but one of the plethora of new tools available to the retail real estate sector ranging from multidimensional data bases to GIS (Geographic Information Systems), OLAP (On Line Analytical Processing) and even the use of the Internet. Rapid changes in today's retail industry have users shopping around for systems that generate better information in a more user friendly way.
"Software needs to do more than just accounting," says Al Lehman, president and owner of Colonial Systems Inc., Exton, Pa. He says the future of retail software needs to move into the services area; beyond accounting, software should move "into operational and promotion aspects."
"Managers and owners need an information system that provides more information on the geographic demographics of area such as pinpointing what types of consumers will occupy the region in the future," says Steve Casner, vice president of sales/central at-based Quantra Corp., formerly Melson Technologies. "In the past, systems were focused primarily on financial performance, but now landlords also need to track items outside the retail environment - what's the median income in the surrounding area, what's the education level, what are the typical potential job market changes in the local economy dependent on one major employer and what happens if that employer leaves."
The owner's relationship with the tenant is very important because the owner's exposure and risk is much higher than it has ever been, Casner says. "Today asset managers and owners need to track what's happening with Kmart, Federated or other companies to understand what their risks are if one of those retailers has a problem down the road."
Asset managers and owners need powerful, easy-to-use software that will consolidate and analyze portfolios using scenario sensitivity testing, says Ronald Dean, managing director at ArgusSoftware of Houston. "An important component of our Argus for Windows is the ability to create a portfolio not only of properties but also of specific tenants across an entire user-defined portfolio," Dean says. "If you're an owner with a lot of XYZ Drug Stores in your centers and you discover XYZ has hit hard times, you can create a portfolio to do `what if' scenarios with Argus for Windows. Also, you can do consolidated scenarios testing the impact that an event such as a major vacancy, change in cap rates or a variety of other adjustments can have on the portfolio value, all with `point and click' ease of use."
Financial forecasting is extremely important in today's hectic retail world, says Lewis Foshee of Dyna Software in Clearwater, Fla., particularly now that investors are demanding more accurate financials in the retail properties that they have invested in.
"For good quality percentage rent forecasts a landlord has to have the ability to forecast what each merchant is going to sell, and have a handle on the seasonability of when those sales are going to be made," says Foshee. "Dynalease, an industry leading lease-by-lease forecasting system provided by Dyna Software provides the ability to model multiple sales categories per tenant and multiple sales seasonability tables."
Accordingly, with improvements in technology, retail executives want to see more and varied information and want to export data to Excel, for instance, through Objective Linking and Embedding (OLE), says Chris Stone, marketing manager at Yardi Systems in Santa Barbara, Calif.
"Having open databases enables clients to create custom reports within the system," Stone says. "With open databases managers are able to combine different information and put it immediately into a presentation format."
In fact, one of the new features of some retail software is "hot links," according to Dean Schmidt, operations manager at AMSI, a division of GEAC Commercial
Systems Inc. in Houston.
"You can hot link the data from the property management system with space plans for the mall or shopping center," continues. "We take a new piece of software, Powerspace, and we read in those floor plans and then we're able to assign intelligent layers - a link to the property management system or a link to heating and mechanical. We can also color code the space plan, pointing out men's clothing or women's shoes, which spaces are producing higher square foot sales and so forth. It's sort of like adding a spread sheet to space planning. It also enables people to do `what if' analysis, like moving a wall without actually doing it."
The fact that the retail market is weak right now presents opportunities for those in the retail software business to help.
"Nobody ever buys a computer or software to spend money," says Ron McComas, vice president/marketing for Management Reports Inc. (MRI) of Cleveland. People buy it to save money in the long run. "Even though the retail market is weaker, that doesn't interfere with us providing software." He says that companies and businesses are looking to improve themselves, "and automation is one way to do it."
Sally Paton, a marketing coordinator with Timberline Software Corp., Beverton, Ore., says her company can provide ways for managers and owners to manage their properties more efficiently and maximize their revenues. One example she gives is that a lot of owners lose money each month because they don't bill everything they can back to their clients - because they don't have the software to properly monitor their finances.
"With real numbers readily available, the managers can assess marketing strategies and spend more time creatively building the value of the center," Paton says.
Software providers are also aiding market systems in day-to-day retail operations. CTI Limited, a provider for the commercial real estate industry, recently introduced "Single Step Lease Entry" (SSLE), a database that monitors the various steps before a lease is signed.
"In essence, all of the property management systems, including ours, are designed to start when there is a signed, but there are at least eight steps that happen before you have a signed deal," says Craig Lofton, executive vice president at CTI Limited. "Clients said to us, `our business is getting tenants into spaces to pay rent, not managing paper,' so we designed a system to take the prospect through the proposal to the lease signing."
As they say in the retail, real estate and software industries, the only constant is change.
Mike Sheridan is a Houston-based writer who contributes to a number of national magazines.