As published in Shopping Centre News 2021 Big Guns edition.
As I reflect on the twelve months that have transpired since my last Outlook, it is a startling reminder of the sheer pace at which our world can change. The headlines that were dominated by drought, bushfires and floods, rapidly turned to a global pandemic that nobody saw coming, which would reap havoc on our health, cities and economy. Social distancing, face masks, hand sanitiser, QR codes and a merry-go-round of restrictions and border closures would come to dominate our everyday.
The last year has also highlighted to me the resilience of the great people at GPT. I marvelled at the way teams not only 'got on with the job', but also eagerly found ways to better themselves. Acknowledging early that we were 'all-in-the-same-boat' helped advance strong retailer relationships into genuine shared partnerships. The necessity to operate our assets with greater efficiency produced learnings that are already translating into cost savings as our centres return to full operations. Our people tuning in for regular virtual COVID updates has evolved into more frequent and more interactive company-wide briefings, where people authentically look forward to sharing and celebrating the successes of one another. Complementing our already flexible working arrangements saw more of our people replace their morning commutes with a sit-down breakfast with the kids as we were forced to worked from home. And on a personal note, I relish the newfound energy I have on a Saturday morning as an upshot of less travelling during the week.
As I summarise it, the past year has had more than its share of challenges, but equally it has forever changed our lives for the better. As the saying goes, what a difference a year makes…
And while we consider how quickly things change, there remain a number of themes specific to our industry that never do. We are now in the midst of a recovery through which GPT will draw upon many of the same strategies and principles that we have applied to our portfolio for several years. In retail, we have come to expect the unexpected, and asset managers and retailers need to be agile, flexible and adaptable to respond swiftly to change. Our teams have a long-held focus on providing exceptional retail offerings, better understanding our customers, and creating enriching experiences within our centres. The need to continually evolve our assets is critical to our future success, as is the need to be ahead of the curve when it comes to what shoppers are looking for in a rapidly evolving retail landscape. Our focus in 2021 is to amplify the positive learnings from the past year, and constructively embed these within our core strategy to not only enhance our business, but our lives moving forward.
In recent years, GPT has focussed on connecting retailers to customers, and while that will forever remain a point of focus, this year our centres will place emphasis on partnering with retailers to deliver the experience we are promising to shoppers. With the easing of restrictions, we are seeing people who were forced to shop online during lockdown come back to our centres, evident in the strong recovery in foot traffic and sales in the lead up to Christmas. While the presence of online retailers continues to increase, omni-channel retailers have been the clear winners this past year. Further to this, the more sophisticated the omni-channel platform is, the greater the sales growth achieved by the retailers across both their physical and online stores. This reinforces GPT's approach to work in partnership with our retailers and deliver the right experience for our customers that are adopting new technologies at unprecedented rates.
In July we launched Retail Runner, a digital ordering platform and fulfillment solution developed to support our retailers as we navigate and facilitate new ways of transacting with customers in a safe and convenient way. Retailers can either create their own dedicated page within the Retail Runner portal or integrate their existing e-commerce solution to the GPT portal. Fulfillment is through either contactless pick up in a dedicated centre drive-thru or free delivery to their home within 10kms of the centre. GPT does not charge for the system and pays for the delivery to the shopper, resulting in an industry-first, last-mile e-commercesolution providing retailers with the flexibility to respond to changes in customer expectations, and broaden their offering to suit individual shoppers' needs.
While Retail Runner has enhanced our offering for those shoppers in our immediate catchments, maximising market share by understanding customers, deriving insights and developing value-creating strategic programs is at the core of GPT's retail business. With COVID-19 expediating the e-commerce side of retail, we saw the opportunity to create 'single source of truth' regarding our customer data. This will allows us to better decipher customer and retailer behaviour, to deliver greater marketing efficiency, drive traffic and dwell time and increase customer spend at each centre.
Creating a bespoke customer data platform, which we've christened 'The Hive', unified our existing customer database of 1.2 million members which dramatically heightens our digital and data capabilities. The establishment of this platform was a significant change project for our business, focusing on the value that can be extracted and derived from a centralised data source, and also changing the entire marketing technology platforms for the Group. Enriched with psychographic and profiling sources, the platform creates a single 360 degree view of customer behaviour, unifying digital analytics, centre Wi-Fi and social media. This has provided a very detailed understanding of our customers, allowing us to market to them in real time on a per centre, per store basis. An example is Sneaker Boy at Melbourne Central, who traditionally have had no need to advertise given their location and relevance with international students. The Hive enables GPT to partner with the retailer to assist in identifying a new target market, while - continuing to engage with existing customers through personalised marketing campaigns.
And while 2020 has been a period of disruption, it has not slowed GPT down in our quest to keep our centres contemporary. Shopping centres are still the primary leisure destinations beyond the home, and the sharp rebound in foot traffic as restrictions lifted only confirms this. The blending of the physical and online experience has made for richer engagement with shoppers, and as shoppers return to our centres, they are seeking a place that can facilitate a feeling of community, joy, relaxation and entertainment. A place where they come to shop for necessity, but also to dine, socialise, work and exercise in a lively contemporary setting. We have seen food play an even larger role in shopping centres in response to demand for more casual dining, and customers will continue to demand more from our assets as they look to spend more on personal services and experiences. GPT continues to invest in the retail offering at its assets, upweighting to growth categories and introducing new retail experiences, with a great exampleof this being Australia's largest high ropes course which opened at Sunshine Plaza last November.
At Highpoint Shopping Centre, we used COVID-19 restrictions to accelerate and complete a $65 million, all-of-centre modernisation project. Our development teams made use of the downtime to deliver the project ahead of schedule, with the investment focused on amenities, furniture, art, technology, landscaping and light. Shoppers returned with delight, evidenced by the centre reopening to strong sales during the Christmas period and placing Highpoint in good stead for a slate of exciting activity in 2021. This year the centre will support David Jones in their endeavour to deliver an optimised retail offering with a 'right-sizing', and Kmart will be filling the vacated space with a store set to open later this year. Parallel to this, Myer will reduce their footprint in the centre, and in what will be a first-to-market offering, Waterman will establish their first coworking space in Melbourne's west. It is rewarding to see the centre and retailers are continuing to benefit as result of ongoing investment, and I implore you to go and visit the centre to see how great the new precincts look.
As the economy begins to recover buoyed by high levels of consumer confidence, I believe GPT's retail portfolio is in great shape to recover from the impacts of 2020. Our strategy to perpetually evolve our retail offering, and to create shopping centres where people experience the magic every day has only been affirmed by the lessons of the COVID-19 pandemic. GPT maintains the conviction and commitment to invest in better understanding our customers, and we are well placed to capitalise on this outlay as we look to recapture and retain existing customers and attract new ones. I am optimistic about the prospects for a return to pre-pandemic activity levels in the second half of this year, and I am eager with anticipation to see the difference a year can make.