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Retail Tech: Five Ways Tech Can Assist Retail Occupiers

May 17, 2022 6 Minute Read


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How Technology Will Affect the Retail Landscape

Venture capital funding of retail-focused technology companies is at an all-time high, leading to exciting advances for the retail industry in location analytics, machine learning, virtual reality and artificial intelligence. Here are five ways that new technologies can assist retail occupiers:


Growing consumer use of mobile devices to shop for and purchase retail goods can provide retailers with valuable data to help improve sales and lower marketing costs.

Total spending through m-commerce grew by 266% between 2015 and 2020, more than double the rate of e-commerce overall. By 2024, m-commerce is expected to account for more than 13% of total retail sales, according to research firm Forrester.

With more than 100 million Americans now using mobile devices and 1 billion consumers using them worldwide, this technology is a ripe opportunity for the retail industry.

Mobile technology can provide retailers with valuable data on who their customers are, where they live and what their buying patterns are. This helps improve personalization, which can help drive sales. Consulting firm McKinsey & Company contends that personalization can add an extra 10% to 15% in sales conversion rates and lower marketing costs by up to 20%.

Figure 1: Retail Spending Growth by Channel, 2015-2020

Source: Forrester, CBRE Research, Q1 2022.

M-Commerce by the Numbers

Image of data stack

Source: Forrester,, 2021.

Store Function

Store optimization through high-tech solutions will allow retailers to better succeed in an age of supply chain and labor force disruption.

While retailers’ ability to maintain inventory levels sufficient to meet consumer demand has been affected by recent supply-chain disruptions, there is a growing level of “retail shrinkage” from employee theft/error, shoplifting and vendor fraud or damage. Some retailers are turning to systems that offer protection against this. Several tech startups, such as Everseen, Graymatics, Malong, Signatrix and Third Eye Labscan, use intelligent video analytics to detect shrinkage with up to 99% accuracy and notify sales associates when it occurs. Additionally, these systems can connect retailers to new channels of selling. Customers have grown comfortable using multiple connection points with retailers, including text messaging, mobile apps and QR codes.

Greater use of new technology by retailers also could help them attract more workers at a time when retail job quits are at an all-time high. A recent survey of more than 14,000 employees by computer software manufacturer Oracle found that 85% of them want technology to help advance their careers. Adapting more technically advanced tools within stores could attract more consumers and workers, thus helping to make gains on two separate fronts.

Figure 2: Quits, Retail Trade

Source: St Louis Federal Reserve Bank, March 2022.

Retail Shrinkage by the Numbers

Image of data stack

Source: Consumer Returns in the Retail Industry 2021, National Retail Federation.

Site Selection

Store location is critically important for retail business success. Significant advances in location analytics have forced retailers to employ an incredibly detailed process that once merely involved their human instinct.

Machine learning technology can now crunch retail data to predict store performance, suggest whether to keep or close a location and determine optimal store sizes for a specific trade area. This information is presented in a way that is understandable even by those not previously familiar with deep demographic dives and data analytics. C-suite executives can use the information to confidently mitigate risks associated with their expansion strategies.

Easily accessible mobile data has helped make this possible. With widespread consumer usage of mobile technology, retailers are reaping the benefits of large amounts of data beyond merely traffic counts and median household income. AI and machine learning technologies use this data for predictive analytics that were unheard of a decade ago. Venture capital funding to location analytics and AI companies doubled last year to $35 billion, according to Crunchbase.

Additionally, tech companies such as Matterport and Autodesk Revit can help retailers evaluate a location, build sample fixture layouts and understand the in-store consumer journey.

Figure 3: Venture Capital for Location Analytics & AI Companies, $ Billions

Source: Crunchbase, March 2022.

Retail Technology Investment by the Numbers

Image of data stack

Source: Wall Street Journal, Internal Data Corporation.

Lease Structures

Technology can help tenants track specific store sales to more accurately determine percentage rents, which will lead to more equitable lease structures with their landlords.

With more retail leases basing rent on a percentage of sales, technology can help retailers confidently track the digital sales of a specific store. Although this remains a somewhat imprecise process, it has greatly improved in recent years by employing a mixture of store apps and mobile tracking to determine exactly which stores have made certain sales.

Accounting firm Deloitte forecasts that blockchain technology will encourage “smart leases” that will increase trust between the retailer and landlord to more accurately formulate percentage rent. Deloitte believes that blockchain can be especially effective with properties that have a relatively higher number of tenants and shorter-term leases, both of which are often the case for retail properties.

As technology evolves, retailers' physical and digital sales will become intertwined. For example, the opening of a new retail location has a “halo effect” of boosting digital sales, according to the National Retail Federation (NRF). This theory posits that when a consumer spends $100 in-store and engages the retailer’s online platform within 15 days of that purchase, they are likely to spend an additional $167.

Figure 4: Halo Effect In $ Spent by Consumer

Source: The Halo Effect II, National Retail Federation.

Figure 5: Benefits of Blockchain/Smart Lease Technology

Source: Blockchain in commercial real estate, Deloitte.

Image of person using mobile device

The Metaverse

Internet searches for the terms “metaverse” and “non-fungible token” skyrocketed in 2021, according to Google Trends. Parcels of virtual land are being bought by notable investors. Virtual buildings are being constructed soon after, with leases being signed by national retailers. Is widespread adoption of the metaverse inevitable?

Some obstacles remain. The most notable is a current lack of users. The use of virtual reality headsets, which remain cost-restrictive, is still relatively low but is forecast to grow rapidly.

In addition, there is yet to be an agreed-upon dominant metaverse. There currently are a small number of well-defined and “livable” metaverse worlds, each with their own unique features and community. Retailers wishing to invest in developing property within the metaverse might wait to see which one becomes dominant.

Some retailers already are taking the plunge. Forever 21 partnered with the Roblox metaverse to establish virtual stores. Sketchers signed a lease for retail space within Decentraland, in which fashion designer Philipp Plein has invested $1.4 million in virtual land and plans to launch an exclusive line. Gartner Inc., a technological research and consulting firm, predicts that within four years, 25% of people will spend at least one hour per day within the metaverse and that 30% of the world’s companies will have products and services available for purchase and use in the metaverse.

Figure 6: Websearch Interest by Week, 2021

Source: Google Trends, March 2022.

Figure 7: Consumer VR Headset Use, History & Forecast

Source: Consumer VR Headset and Content Revenue Forecast 2021-2026, Omida.

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