ACROSS: Please give us a brief description of your company.
PETER TONSTAD: Boostcom helps shopping centers generate revenue from digital. From a product perspective we offer a Data Management Platform, a very comprehensive marketing platform, reporting, and a service layer. To emphasize the value we create for our customers we have branded or platform the “Mall Performance Cloud” and our service layer “Performance Management”. The company is headquartered in Norway, and signed its first shopping center client as early as 2004. We provide solutions to shopping centers with regards to all relevant digital assets. We have directed all of our energy and investment activities toward the mall segment for the past two and a half years. Today, Boostcom is a world-leading PropTech company with more than 200 global shopping center clients. We have eight offices in various European locations, one in the USA, and three in Asia. Boostcom is backed by venture and PE funds, thereby enabling us to continuously expand our global market position and product development. It is the only company that integrates all available digital touch points within a mall environment into one data layer.
ACROSS: Can you explain that in other words?
TONSTAD: The way we see it malls need to actively build digital consumer reach in parallel to their physical catchment and footfall. If our clients in addition to owning the physical mall also own a substantial digital consumer client database they can drive additional footfall and also serve their tenants up against their digital offering. Boostcom helps increase shopping center revenues, both instore and online. We help them deliver an increased share of digital revenue. We want malls to utilize digital as more than just a marketing channel–it’s a revenue channel as well. Instead of feeling challenged by e-commerce, they can push the limit to see how far they can dive into digital sales to the benefit of their tenants. In many ways, one could argue that our business is in its infancy. However, development is progressing rapidly.
ACROSS: How many shoppers can you reach?
TONSTAD: As previously mentioned, Boostcom integrates every possible digital source into unified data layers in order to link physical malls to consumers via digital channels. The data is used to carry out relevant and targeted consumer marketing via consumers’ preferred digital channels. Some of Boostcom’s clients are able to reach up to 80% of all consumers in their physical centers through their database of digital profiles, and those shopping centers’ data-driven digital activities account for more than 25% of the revenue for some tenants on a monthly basis. People should receive as much relevant information as possible whenever they visit malls. On the one hand, efficient marketing is based on this. On the other hand, this provides the basis for services offered by the shopping mall, such as Click & Collect, in contrast to or in addition to Click & Collect services offered by the retailer. Retailers are already in possession of comprehensive data on their customers. Boostcom helps malls gain additional insights for the benefit of their tenants. Data supporting identifying if specific consumers are at the physical mall or not is one example.
ACROSS: On average, how many digital points are there in a mall?
TONSTAD: The more the better. We are currently installing 12 different data sources for a mixed-use project in India.
ACROSS: Who are your clients?
TONSTAD: We are active in 14 European countries, 4 markets in Asia and the US. We work with both large corporations as well as smaller companies and individual malls. Our clients include Klépierre, CBRE, and Cushman & Wakefield, to name a few.
ACROSS: Do you also have clients in the outlet center business?
TONSTAD: Yes, we do, but that’s not the biggest share of our portfolio. From a Boostcom perspective, this approach is quite similar to the “normal” shopping center business. Technically speaking, there are no differences at all.
ACROSS: Beyond that, how should shopping centers position themselves in the age of e-commerce?
TONSTAD: Everyone knows that completion of the last mile in e-commerce is not profitable, there is currently no money to be made there. We believe a mall can fulfill such a role on a bigger scale than it can now. This channel would enable shopping centers to improve the consumer experience also from e-commerce, which would be fantastic. That’s where we come in. In addition to our own offerings we monitor the market, and when we discover a company that gives us access to new markets and clients we might consider to buy it. We have recently acquired a company in Asia called iColumn.
ACROSS: Why did you decide to make this deal?
TONSTAD: iColumn, which is based in Singapore, has been acquiredas part of our growth strategy. iColumn has been the leading player in the digitalization of shopping centers in South-East Asia since 2009. Boostcom is and intends to remain the hub of the digital transformation for a very large and important global industry. iColumn is a pioneer in South-East Asia, and we will now set our sights on growth, together with Boostcom, across more of Asia and the rest of the globe. The difference between Asia and Europe in this area is that, in Asia, more focus has been placed on consumer benefits linked to actual purchases. From Boostcom’s perspective, it is crucial to deliver the largest possible range of documented consumer transactions from digital to shopping centers and their tenants.
ACROSS: Are there any other deals in the pipeline?
TONSTAD: Yes, there is one in the USA that hopefully will be announced shortly.
ACROSS: You also provide loyalty programs. Which ones are most appealing to customers?
TONSTAD: That question is both good and relevant. We track the market very closely in this respect. In Asia, for example, a great amount of resources flow into the establishment of loyalty programs for malls. The challenge is that the benefit for consumers is generally low. In addition, we see that only a maximum of 10% of customers are reached in this way. Our average rate is 30%. The solution, as we see it, involves combining loyalty programs with other components, such as instant rewards and cash-back programs. Incidentally, the highest rate that we have reached, 80%, is at a mall in Norway.
ACROSS: Digitization has transformed the entire shopping center industry. What’s next?
TONSTAD: In my opinion, the next issue will revolve around generating more revenue from digital. Therefore, transactions are very important. Digitization should always be geared toward generating revenues. Everything else is secondary. E-commerce will continue to grow. The question that remains concerns what role malls will play. For us, e-commerce forms part of a mall. Generally speaking, the logistics chain has become more important in the retail sector. Historically, logistics has been the primary concern of retailers. Now, shopping centers have to play a greater role in this area.
ACROSS: What type of market environment does Boostcom operate in?
TONSTAD: We separate competition into two categories. The first category consists of companies that specialize in shopping centers or the shopping center industry. We are extremely competent in this area. We are the market leader. There is no other company that has more customers or generates more revenue than Boostcom. The second category includes a number of competitors–including global players–who generally deal with marketing and data platforms.
ACROSS: How satisfied are you with your business performance?
TONSTAD: Boostcom is organically growing at a rapid pace. We are signing new clients every month, and we will probably count 150 employees by the end of the year, which is 50 more than we currently have. Boostcom has always been, shall we say, one step ahead in evolving digital for shopping malls. After all, we’ve been in business since 2004 and have made a number of investments. Until a few years ago, many malls were reluctant to embrace the digital world. That has drastically changed. Every decision-maker in the industry, all the way up to the CEOs, is interested in speaking with us.
ACROSS: What type of data protection measures have you implemented?
TONSTAD: The European General Data Protection Regulation (GDPR), which became effective last year, is a very healthy regulation for companies like us, and adds a lot of value to the consumers. It has provided a great deal of clarity. We see similar structures being implemented in more and more countries in Asia and certain states in the US. In that respect Boostcom comes very well prepared.