Putting Disruptive Technology to Work in Offices and Retail
CBRE Belgium
May 23, 2017
Putting Disruptive Technology to Work in Offices and Retail

From augmented reality to smart sensors and predictive analytics, disruptive technology is transforming the way we live, work and play. Retailers and office occupiers alike are increasingly leveraging smart tech tools in an effort to drive cost efficiencies.

For occupiers in both sectors, technology is both a threat and an opportunity.

The factors affecting retailer and office occupier decision-making might be more closely related than you think. For occupiers in both sectors, technology is both a threat and an opportunity—and while there are differences in context and approach, there are parallels as well.

According to CBRE’s latest How Active Are Retailers in EMEA 2017, 57 percent of retailers see cost escalation as a top concern in 2017, with 64 percent of occupiers citing economic uncertainty as a major challenge in the 2017 EMEA Occupier Survey. In a macroeconomic environment in which uncertainty is seen as the “new norm,” disruptive technology is increasingly being implemented in support of a broad agenda which includes combating cost escalation and also the means to respond rapidly to changes in external circumstances.

Disruptive Tech: Cure or Cause?

Given office occupiers’ inherent cost-consciousness, driving efficiency in existing space is becoming more important. In the EMEA region, 66 percent of occupier clients surveyed say disruptive technology’s main purpose is for occupancy management, indicating that they are seeking cost efficiencies through making their space work smarter. Is disruptive technology the “silver-bullet” for achieving cost-efficiencies? To some extent, yes. But cost-reduction isn’t the only objective; productivity and user experience also sit prominently on the technology agenda.

Conversely, in retail, technology disruption is forcing brands to rationalize their store networks and rethink their purpose altogether. In the omnichannel retail market there is an opportunity for prime, well-placed commercial real estate to be used in many aspects of the business. Flagship stores are used as a marketing billboard, a physical product showcase and a logistics hub, all in order to drive sales both on and offline. Stores that don’t fulfill this multi-faceted approach will struggle to justify their existence.

Smart Tools, Different Solutions

Smart sensors and predictive analytics are fast becoming core tools influencing commercial real estate decision-making.

Office occupiers are also focusing technology on building and facilities management, cited by 60 percent of the survey sample. Using sensors and predictive analytics, managers can seek more effective energy usage (think lighting, temperature control, air conditioning etc.) and resource efficiency through managing internal infrastructure and appliances, like waste and elevators. Where this is ultimately going is towards automation: Can smart sensor data be generated in sufficient volume and utilized so cleverly that managers can start predicting events with the aim of automating the processes behind them, killing cost and optimizing efficiency?

While retailers are benefiting from the same process optimization, they are also using the available technology to transform how locations impact a customer’s pain points. Sensors and trackers are starting to give users real-time information on the nearest free parking spaces and store locations, but are also increasingly allowing shopping center managers to make analytical location decisions on the placement of anchor tenants, helping drive foot traffic to underused sections of shopping centers.

Rethinking the User Experience

Outside of the direct real estate applications, technology is becoming a pivotal method for influencing the user experience.

In retail, there is real opportunity to use technology to increase customer engagement. The growth in e-commerce has provided the catalyst for retailers to rethink the way they engage consumers in store, while leveraging technology to enhance consumer interactions with products through immersive technology such as interactive displays and virtual changing room assistants. In the workplace, technology is all about enabling employees to do their best work in the way that suits them. On average, 50 percent of office occupiers cite technology as the key success factor of a flexible working strategy, up from 24 percent last year. Increasingly, smart wellness programs are aimed at boosting the employee experience to supplement flexible working and keep employees operating at their optimum level.

Keep the Audience in Mind

It’s no use implementing disruptive technology if you don’t understand the end-user. CBRE’s recent Millennials: Myths and Realities report highlights that understanding changing consumer and employee behaviors could put you at a distinct advantage when making CRE decisions. Combining this knowledge intelligently when implementing new or disruptive technology will enable employers and retailers to overcome uncertainty, reduce costs, drive innovative outcomes and keep their workforces happy. 

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