WRITTEN BY: Oliver Boucke, Research Director, ShopperTrak
What is the recipe for success for the biggest and most successful shopping malls in the world? Is it location? Is it the glitz and glamour of the building that encourages shoppers from far and wide? Or is it the amazing selection of retailers on offer?
Shopping centres are still suffering from a world-wide economic downturn, although perhaps not as badly as the much maligned high street. In fact, compared to the traditional town centre, shopping malls have many advantages. Some offer free parking, or easy access from motorways and indoor protection from the weather – all of which have helped their performance through the recession years.
Obviously there’s no magic formula that can be replicated time and time again to create the best mall experience. But at this moment in time, it has never been more important for malls and retail outlets to examine how the information at their fingertips can provide useful insights into operational efficiencies and benchmarking performance insights.
The most successful shopping malls across the globe all share a similar trait. By using shopper foot traffic information and analysing the resulting data, they can transform insight into competitive advantage. ShopperTrak works with major shopping malls such as Liverpool One, MetroCentre (Gateshead) as well as Mall of the Emirates in Dubai, just to name a few, and has seen them doing just this.
Liverpool ONE is one of the UK’s leading retail and leisure destinations and part of its huge success is due to its unique offering in terms of customer traffic data availability: centre total, in-mall zones as well as store level traffic.
Matt Bell, Business and Customer Service Director, explained, "At Liverpool ONE, we believe that the key to our ongoing success is to work in partnership with all of our occupiers. Individual store - and retailer category - conversion rate monitoring combined with actual sales turnover performance is invaluable in ensuring that our marketing and operational activity supports the needs of both our occupiers and customers."
"We also provide our occupiers with the information they need to ensure that all elements of their activity - from staffing levels to merchandising - maximises their trading potential."
Foot traffic data is much more than just numbers. By examining patterns and trends, shopping mall managers can open up information about shopper habits, spending trends, prime retail locations, daily and hourly patterns of traffic and much more. Data can be used to identify which locations and outlets perform better than others, how mall-wide promotions can help flagging outlets, right through to setting rents and service charges based on location.
By reviewing data from shopping malls as well as benchmarking against previous years' figures, it is possible to watch trends unfold and centre managers can adapt their sales and management techniques accordingly.
When this data is integrated with sales and transactioninformation, it gives retailers the ability to see how traffic trends directly link to sales spikes, as well as in-store conversion rates (i.e. the proportion of shoppers actually making a purchase).
Here are the top five ways that leading shopping malls can use foot traffic data:
1. Focus on increasing sales, rather than just traffic
Many shopping mall owners consistently focus on increasing visitor numbers in order to increase sales. The soaring traffic growth of a new centre usually lasts just three years or so with as much as 80% of the growth commonly achieved in the first year.
The best way to increase sales performance from outlets is to target an increase in sales per customer. This is best done through detailed targeting of the ideal type of high-spending customer and encouraging them to visit through targeted marketing efforts. Higher sales transactions can also be achieved by re-scheduling store staffing levels – to match store (traffic) selling opportunities – which ultimately provides better customer service.
By focusing on increasing spend per head, it is possible to continue the sales growth trend for the future.
2. Measure the effectiveness of marketing promotions
All shopping malls run regular marketing promotions for the entire mall, sometimes working with specific retailers. However, these campaigns are useless without proper measurements in place to examine just how effective they have been.
By analysing foot traffic and sales conversion reports during a period of promotion, activity spikes can be used to measure effectiveness.
3. Labour scheduling
By analysing the trends and patterns in foot traffic, shopping malls can cascade useful information to all of the retail outlets to help them plan labour scheduling.
If stores know that visitor numbers spike at 3.30pm on Fridays, for example, they can ensure resources are on the shop floor.
It is essential for retailers to manage their staffing levels because shoppers won’t hang around if they can’t get the assistance they need or have to queue to make a purchase
4. Tenant engineering
Placing retail outlets in the best location within a mall is a bit like fitting a jigsaw together. Sometimes it fits, but other times it needs a bit of re-organisation. By using foot traffic patterns and trends, managers can use hard evidence to ensure all the different parts fit together for the best results for each retail outlet.
If a certain retail outlet is performing below expectations, it could be down to location. By changing the location of the outlet and placing it nearer to a heavy foot traffic area, this can help reverse the fortunes of the outlet.
5. The importance of entrances and exits
Huge shopping malls have multiple entrances and exits. By using data to discover the most popular entrance and exit, managers can ensure flagship stores are placed in key locations to channel shoppers through them.
For example, in Liverpool One, John Lewis has a stunning flagship store placed at the main entrance from the car park which brings customers directly into the heart of the store, before channeling them through to the rest of the mall.