ra icsc market research · pdf filepage 2 of 44 content • why the need for marketing...

Shopping Centre Consultancy

Christopher Mears

Director

ICSC Leasing Workshop – 24th July 2013

Market Research – Vital & Necessary

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Content

• Why the Need For Marketing & Research?

• Research: Vital & Necessary

• Research Methodologies

• Market & Consumers

• Tenants & Their Business

• Creating The Leasing Plan

• Creating The Marketing Plan

• Value

• Summary of Key Points

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WHY THE NEED FOR

MARKETING & RESEARCH?

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WHY THE NEED FOR MARKETING & RESEARCH?

Ownership Objectives

MANAGEMENT

1) Collect rent

2) Control expenses

3) Tenant relationship

LEASING

1) 100% occupancy

2) Active rent growth

3) Competitive tenant mix

MARKETING

1) Increase customer traffic

2) Positively influence the

perception of center

3) Alternative revenue

4) Increase sales

5) Leasing Support

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Market Research

• GAFO – Commodity Group Breakdown

– General Merchandise

– Apparel

– Furnishings

– Other Retail (restaurants and bars excluded)

• Know the market

– Competition

– Deals

– Trade area

– Customer

• Know the players

• Market research

– Trade area

– Competition

– Customer profile

• Type of center

• Target tenant mix

• Economic goals & objectives

• SWOT Analysis

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Demographics

• Are Demo Rings enough?

– Geographic barriers

– Trade area characteristics

– Customer profile

– Daytime and weekend traffic inflow

– Tourism

– Seasonal influences

– Traffic counts

– access

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Demographics

• Research Sources

– Focus groups

– Exit Surveys

– Household Surveys

– Intercept surveys

– Telephone surveys

– Shopper profiles

– Lifestyle segmentation

• Desk Research

– Government Agencies

– Third party Research

– Portfolio statistics

– Local Chambers of Commerce

– Local Economic Development Departments

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Research Advances

• Technology – new advances in shopper patterns

• Involve the Consumer – consumers typically respond well to being involved in the process - Focus Groups Exits Survey

• Data Mining – there is much to be learnt from digging beneath the surface of the data that you have in your possession

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Marketing Requires Knowledge

• Exit survey

– What do they read, listen to and watch?

– What do they like to win?

– Where do they live?

– Customer Profile? Age, Gender, Income

• Intelligently marketing to your customer reduces cost and increases effectiveness

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Leasing Requires Knowledge

• Retailers expect a sophisticated level of knowledge from Landlords to assist them in making the right

real estate decisions:

– Customer Profile

– Footfall

– Category Sales

– Trends

• The goal of market research within a leasing strategy is to:

– Focus prospecting on tenants that fit the center

– Identify and improve the weakest elements of that center

– Optimize the commodity group offerings and tenant mix

– Achieve growth in center’s revenues

• Gaining information through an analysis of the center, including a SWOT analysis and competition in

the trade area, will highlight any retail voids, identify the types of tenants needed to fill those retail

voids, and offer key information about retailers likely to complement the mix of tenants already

operating successfully in the center.

• Based on this information, we can identify the opportunities to position our centre in the marketplace.

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• Tenancy Mix Plan – right for the market:

– Supply and demand

– Market trends

– Size of centre – allocated space to tenant

– Centre’s layout

– Square footage by category

– Ratio of category to total centre area

– Sales per square foot by category

– Ratio of category rental to centre’s income

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• Avoid the easy deal… learn how to say no!

• Reassure your retailer about cannibalization

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Leasing Professionals need to:

• Understand how leasing, management, marketing work together to make projects successful

• Be aware of trends, lease rates and important business terms

• Understand market conditions and shopping centre position in the marketplace

• Know the retailer’s business

• Develop and implement leasing plans that fit the shopping centre and the market

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The Big Picture

Think Globally !

• Business Trends

• Economic indicators

• Population shifts

• Financial markets

• Consumer sentiment

• Shopping habits

• Expenditure potentials

• Consumer requests and inquiries

Act Locally !

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Factors affecting the Industry

• Economic pressures on consumers and businesses

• Lack of capital and/or credit

• High unemployment

• Inconsistent consumer spending

• Low consumer confidence

• New retailing trends

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RESEARCH:

VITAL & NECESSARY

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RESEARCH: VITAL & NECESSARY

• What is research?

• How does it affect the Leasing Process?

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Why Retail Research & Who Needs It?

• “Retail research can be defined as the organised search for and the analysis of facts, related to problems in the field of retailing in order to produce useful recommendations for retail management improvement” – Ogenyi Omar 1999

• “The study of pertinent social and economic characteristics of a cohesive area in order to estimate a need of effective demand for a given tangible product” – ICSC 1985

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Why Retail Research & Who Needs It?

• More simply put, it can also be summarized as…

“…..a basic methodology that ascertains facts about

a given market in relation to a given product…..”

• As a general rule of thumb everyone in the retail supply chain will need & benefit from what research offers & it nearly always starts with the customer

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RESEARCH METHODOLOGIES

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• Sales tracking

– Customer source surveys

– Loyalty data Cards

– Store Performance Data

• Site research

• Demographic & consumer spending

• Competitive analysis

• Sales forecasts

• Customer surveys

• Economic Analysis

• Market-share & Penetration

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Proactive or Reactive – What is the right time to use research?

• Both are useful and so neither is ‘more right’ or ‘more wrong’ than the other – but the research that is undertaken needs to be ‘right’

• However, research needs to be solution orientated and therefore is more often than not bespoke, and applicable only to one project – there is no canned solution or one-size-fits-all approach.

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MARKET & CONSUMERS

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MARKET & CONSUMERS

An Overview

• Consumer market research when properly used and properly understood is a marketing tool that can yield invaluable market and consumer insights

• As customers and their needs change, the retail environment needs to keep up-to-speed with these changes in consumer attitudes and trends– research offers a powerful (and quick) way to do this

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MARKET & CONSUMERS

Establishing Trade Area

• A Trade or Catchment Area (CA) provides the outline of the expected shoppers and visitors by sales

contribution & by area of residence.

• Research should collect data & information relating to demography, expenditure, frequency of visit and

area of residence.

• This data can then be used to outline (delineate) Trade/CA’s and forecast footfall, patronage, spend,

market-share, scalability and offer a measure of success to a new or existing property

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TENANTS AND THEIR BUSINESS

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TENANTS AND THEIR BUSINESS

Understanding Tenants and Their Business

• Rent or occupancy costs as % of sales

• Experience and history

• National Tenants Vs Mom and Pop

• Does the business fit the mix / market

• Improving retail sales (Marketing)

• Know their current and historical financial picture

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CREATING THE LEASING PLAN

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Competition

• Research the Competition

• Build a database of all retailers operating in comparable projects

• Analyze the database

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Using Research to Make Lease Plan Decisions

• Research tells us:

– Who is our customer?

– Who might our customer be?

– Who and what is our competition?

• Mall Positioning

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Leasing Goals

• Retailers that “fit”

• Avoid the “easy deal”

• Identify and repair weakness

• Grow Sales!

• Position for the present AND the future

• Start again!

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Reality Check

• Sized to meet the needs and wants of the primary trade area taking into consideration your competition

• Consider future growth potential in your design, “phased approach?”

• Positioned in accordance with the trade area

• Focus on ROI, remember to look at the cost

• A few aspirational retailers can be good for the mix

• Pre-lease 40-60% including all anchors before breaking ground

• Retailer Demand Survey to vet your aspirations

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CREATING

THE MARKETING PLAN

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CREATING THE MARKETING PLAN

Market Profile

• Population

• Tourism

• Socio-Economic Factors

• Mall Overview

• Buying Power

• Market Growth

• Global Comparisons

• Supply & Demand

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CREATING THE MARKETING PLAN

Measuring Results

• Key metrics for leasing

– Occupancy rates

– Deal Speed

– Quality of tenants

– Top line achievement, Growth

– Retention of tenants

– Satisfaction of tenants

– Share of market (modern retail), growth

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SUMMARY OF KEY POINTS

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Key Points

• Research is vital and necessary

• Research will assist you in making the right decisions for your tenants and your customers the first

time; it’s good for your bottom line

• Research needs to be done in a timely manner and on an ongoing basis

• Be realistic and honest with yourself and your clients

• Marketing and all teams should be a very important part of the Leasing Process

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Thank you

R e t a i l A n a l y s y s

No 18-2, Jalan PJU 5/4

Dataran Sunway, Kota Damansara

47810 Petaling Jaya, Selangor Malaysia

Tel: +603 6142 1016

Fax: +603 6142 1018

M: +6012 719 3382

[email protected]

www.retailanalysys.com

ra icsc market research · pdf filepage 2 of 44 content • why the need for marketing...

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