In the growing digital era, malls are trying to keep up

What do your local mall and the NSA have in common? The answer may be more than you think.

Malls and retailers have started using more sophisticated ways of tracking shopper trends, using the data to customize their mobile advertisements to match what customers will be most likely to buy. They’ve also begun to use these data gathering methods to change how they organize their outlet layouts and to determine where they should position specific stores in order to avoid foot-traffic dead zones. This is all made possible through mall Wi-Fi in conjunction with security cameras.

When you access a mall’s Wi-Fi, retailers can plot shoppers’ whereabouts and match their ads against customers’ social media and email to customize which advertisements are displayed to each consumer. The business’ privacy policy is disclosed when you agree to their terms and conditions by signing onto the network. The mall can also use their Wi-Fi to send ads to devices on their network to alert costumers to deals and discounts.

Some stores are using an even more aggressive approach. The Wall Street Journal reported that in South Town, Utah, businesses have deployed a beacon that can send ad alerts to smart phones and tablets in its vicinity.

Malls are increasingly turning to digital media and advertisement to reach potential customers while they are still in the mall. A 2016 survey conducted by the Wall Street Journal found that among the 5,000 polled, 51 percent of their purchases were made online—a big bump from the 47 percent recorded in 2014. This is also evidenced by the massive closing of stores scheduled to occur. According to Dallas News, JCPenney is set to close 130 stores this year, while CNN reports as well that Macy’s is looking to close 100 of its locations. Businesses like J.Crew and Gap have also been struggling against stores like H&M that offer new trends and cheaper styles.

With so many stores clearing out of malls, the question of how to address aggressive advertising has been on the minds of many landlords.

“The digital, mobile, and social networking world is a fast-evolving space and we are going to be learning as we go along to figure out how it works best for our consumers and our retailers,” said Mikael Thygesen, chief marketing officer for Simon Property Group, to the Investor Real Estate.

Xchanging Technology did a study of five shopping malls in the U.S., finding that 62 percent of mallgoers leave their Wi-Fi on when entering a mall. Although without even connecting to the offered network, the mall can “ping” your phone off of its Wi-Fi hotspots and coordinate that information with the building’s cameras to determine which stores are most popular in order to distribute their retailers for maximum efficiency.

With such stiff competition coming from the online market, physical stores—and malls especially—are now deciding that any type of advertisement and customer data gathering is on the table.