Towards the Experience Economy

When recently visiting Shanghai, Scentre Group’s Director of Customer Experience (CX) Phil McAveety visited the first Nike House of Innovation to open outside the US.

It was, he says, an interesting merging of the physical space with digital technology but with a strong focus on personalisation.

“What was most striking was that the most popular part of the store was not technology driven. It was the customisation room where you could select from eight to 10 shoe silhouettes, choose custom design and colours which were then hand painted for you,” says McAveety.

“People were lining up to customise their shoes and others were lining up just to watch.”

The Nike experience resonated with McAveety because in his role at Scentre Group he is driving a transformation in the customer experience strategy, away from being in the shopping centre business to being in the “living centre business.”

Today’s customer, says McAveety, is demanding so much more.

They are more connected, they are “always on” and they are more informed about brands and product.

But they are also demanding vibrant and stimulating environments which deliver extraordinary experiences, and if they don’t get that then they – and their wallets – will go somewhere else.

“It’s not enough for us any longer to be just a curator of retail and brand experiences,” says McAveety.

“We really need to be a creator of overall customer experience.”

Also in Shanghai, McAveety saw the latest retail concept from Starbucks, called the Starbucks Roastery, which the company describes an “immersive and dramatic expression of our passion for coffee.”

Over ten times larger than a normal Starbucks, the Roastery is not just a place to roast coffee, but includes a full liquor bar, bakeries and lounge areas complete with fireplaces.

“It’s really like a factory and I’ve never seen anything like it in retail,” says McAveety.

“Its 2800 square metres of space and its packed from morning till night. It reinforced to us all that despite living in an increasingly digitized age, people still want to congregate in interesting, energetic locations.”

The Nike and Starbucks examples both point the way forward for how retail spaces are transforming.

The future of physical retailing is about delivering “retail theatre” where people go not just to buy, but “hang out, see and be seen.”

“We need to be providing destinations where people choose to go to spend time, and they may shop immediately or they may not,” says McAveety.

“Today it’s about creating extraordinary places, connecting and enriching communities.”

In addition to being a property company in the shopping centre business Scentre Group has re-imagined what it does, and today it’s around delivering a customer experience which is not just focussed on shopping, but is more around leisure, culture and community.

At the new Westfield Coomera living centre on Queensland’s northern Gold Coast, for example, more than 40 percent of the space is for non-traditional retail.

There is an area called “The Backyard” which has a water play area for kids, and BBQ pits for families.

“You can bring your own food, you don’t have to buy anything from the centre – although it is all there if you want to,” says McAveety.

“But it’s creating that sense of community and sense of belonging.”

Customers were also looking at the centres to deliver from a health and wellness perspective, and this was driving the location of gyms, spas, yoga studios and even skate parks.

Last year, there were more than 13,500 events and collaborative brand activations across Scentre Group’s portfolio of 41 Westfield living centres, everything from face painting to hosting pop diva Katy Perry as she promoted her world tour.

Many were also cultural events, not just Christmas but Lunar New Year, NAIDOC Week and the Islamic festival of Eid.

Recently, Scentre Group partnered with Future Women to deliver Westfield Women in Conversation, an intimate event series designed to connect and inspire women, held at 11 Westfield living centres across the country.

Celebrating Scentre Group’s long-term support for the growth of women’s football in Australia with the Westfield Matilda’s recently making it to the Round of 16 at the FIFA Women’s World Cup also helps connect local communities with the sport they love through memorable player experiences in Westfield living centres and exclusive opportunities at Westfield Matildas matches. It also aligns with Scentre Group’s customer base given women account for about 70 per cent of visitation across the portfolio.

“Activations create the energy and this is what makes it a place that people want to be, that is interesting enough to get off your couch and come,” says McAveety.

The customer focus is also about improving traditional pain points, such as parking.

A research project analysed a metric called “interrupted journeys”, caused by events such as having to press the button and talk to the attendant.

In 2017, 2.3 percent of all visits to Scentre Group car parks ended with the customer having to press the button, delaying their exit. And in many cases this meant the operator lifted the gate and the customer parked for free, and Scentre Group lost revenue.

“We started getting under the skin of it and discovered a whole range of reasons,” says McAveety.

“The cameras which read the licence plates weren’t pointing in the right direction. Some tickets weren’t on the right paper stock. We hadn’t put the speed bumps in the right place so people were speeding up so the camera couldn’t get a read.

“We addressed those issues one by one, and we’re now down to below 1 percent in interrupted journeys, which is a great result for them and for us.”

In the last three years, Scentre Group’s Positive Reputation and Net Promoter Scores have both risen steeply.

This means that not only are customers happier, but is proof that better CX delivers commercial outcomes.

“The higher you go in terms of NPS, the higher your sales are going.”

“There is business delivery here, and it’s not just about doing the right thing, it’s about delivering great outcomes.

“These are the two sides of the ‘yin and yang’ and we want to do both and elevating the customer experience is the key.”