Piecing it Together

Strategic planning and research fill the gap that separates thriving shopping centres from merely operational schemes. Done right, they can offer corporate and on-site marketers critical insight into consumers’ minds, and access to their wallets.

Story by Myriam Beaugé 

John Spilsbury may as well have been a shopping centre professional. The London engraver and mapmaker who produced the first-ever jigsaw puzzle in 1767 using a sheet of hardwood and a fine-bladed marquetry saw, gave British educators the perfect tool to teach children geography. Little did he know, his creation would one day colour the English language and give us a representation of the challenges and opportunities that await strategists in various areas—from war trenches to the open market.
Shopping centre marketers themselves could learn a thing or two about strategic planning and research from puzzle solving. They’d learn the most effective way to tackle the tasks, which critical elements to look for, in which order to approach them and, most important of all, how to keep focused on a clear goal—the picture on the puzzle box, the retail landscape in which the shopping centre features prominently.
Jason Berry believes the first step is to assess a shopping centre’s true position in the marketplace.
"Marketing strategy begins with an understanding of a centre’s catchment, its leakage and its interaction with neighbouring centres," said Berry of CACI, a company that uses its expertise in data crunching, behavioural analysis and catchment modelling, to research and advise on shopping centre performance.
CACI, which developed products such as the ACORN geodemographic segmentation tool, relies on the Retail Footprint model (it is calibrated by credit card transactions) to determine the extent of a catchment, before estimating the worth of a shopping centre’s clientele in terms of comparison goods spend, overall as well as by product category (e.g. womenswear or sporting goods). CACI also looks at media suitability by overlaying media boundaries for local press and radio, and then researching the affluence (or lack thereof) of consumers using each medium.
Berry says perhaps the most revealing aspect of the research emerges when the retail catchment data is compared to data from exit survey respondents, an exercise which allows CACI to identify specific postcode sectors of over and under-performance within each catchment area.
"[This process enables] the decision-maker to not only understand the potential of the centre, but also identify very specific areas to target," Berry explained.
Once marketers fully grasp this context (the picture on the puzzle box), it is time for them to begin placing the individual pieces that will later form a cohesive strategic marketing plan, not the least of which is getting into consumers’ heads.
"Much of the research content currently initiated is focused on understanding the complexities of shopper behaviour rather than determining who shops where. The emphasis has shifted to better understanding of why people choose shopping venues," remarks Martin Davies, director of retail planning for Experian Ltd.’s Business Strategies Division.
This, Davies says, entails understanding shopping hierarchies and determining the centres that are visited for specific occasion-led purposes—from bi-annual visits to replenish wardrobes to shopping trips to trawl around fashion circuits.
"Consumer research is now focusing on determining relationships between the first, second, and third-choice centres, which, in turn, leads to wider analysis of how centres inter-relate and their role in regional or national hierarchies," Davies said.
This is where Davies’ so-called zones of influence on shopping centres appear as major sections of the strategic planning puzzle, enabling marketers to begin to figure out what they need to provide, both from a tenancy and service perspective, in order to encourage shoppers to visit and spend.
The challenge is that consumer needs change all the time, as does society and the business climate in which shopping centres operate. It is as if the puzzle pieces spontaneously changed shape and colour before your very eyes. And that is why a completed puzzle, or a comprehensive strategic marketing plan, is never quite ready to be shelved.
For Tina Dallorzo, effective strategic planning requires flexibility and responsiveness to evolving elements, such as strength of tenant mix, trading performance, economic circumstances, footfall to the area and brand-image building requirements. The centre director for London Trocadero and London Pavilion says she typically sets aside one week for formal strategising structured around several brainstorming sessions. But then, whatever plan ensues is constantly fine-tuned so it meets the goals of not only the centre, but also retailers.
Dallorzo recalled a time when she focused on a major task, namely boosting her centre’s footfall. At the same time, tenants were clamoring for their own micro-project, a discount booklet. Dallorzo listened and she ended up incorporating the tenant project into her footfall-driving plans. The centre developed a branded booklet, which was distributed to shoppers over weekends by eye-catching costumed leafleters on stilts. And the scheme worked, with tenants reporting an increase in trade based on data captured from redeemable discount vouchers.
Like Dallorzo, Deborah Owen-Ellis Clark sees strategic planning as dynamic management.
"To be honest, I believe it should be an ongoing process. I am constantly information gathering, considering emerging trends and how they could influence what we do, evaluating our events and the successes and what we could do to improve activity," said Owen-Ellis Clark, marketing director of Gunwharf Quays in Portsmouth.
The strategic process at her property begins six months before each year end, with top-line strategy, brainstorming and financial projections. Then at four months, most of the Gunwharf Quays teams will have completed draft departmental objectives, before staff input sessions and a two to three-day retreat are held so everyone can agree to an overall strategy with key objectives and financial projections. Gunwharf Quays then writes out the final business plan before presenting it to staff and rolling it out.
All of this work is done based on prior research, which includes quarterly exit polls and mystery shopping visits, as well as annual or bi-annual focus groups, tenant surveys, field work and desktop data mining (e.g. conference papers, ACORN demographic info). She also relies on tools such as outside event calendars to generate planning ideas—these include SeaBritain, the Volvo Ocean Race and Global Challenge, which are events she said Gunwharf Quays can bring to Portsmouth.
London Trocadero has its own approach to research. Instead of conducting or commissioning research according to a calendar, it focuses on event-specific data gathering. The centre’s Tina Dallorzo says analysis is completed after each event and all of the work is done in-house using questionnaires, telephone interviews and face-to-face exchanges. Overall, Dallorzo spends approximately 10 percent of her budget on research, which is more than the five percent that Heather Scott of Dalton Park and Susan Sambrook of Frenchgate Centre each spend. Whether these marketers allocate too much or not enough of their marketing budgets to research is relative, and marketers should focus more on the goal of research rather than a fixed spend, said Geoff Nicholson, managing director of Fripp Sandeman & Partners Ltd.
"Research is expensive and the cost can only be justified by using the results. The acid test before commissioning any research is to identify the decisions that will be altered by the results," Nicholson said. "If it makes no significant difference to any decisions, research reports make expensive door stops!"
He believes that the most costly type of research is the kind that is commissioned in response to an urgent need, and not as part of an ongoing marketing process. Allowing for the integration of research results and allowing for repeated use reduces the research’s "cost per use" and makes better use of the marketing budget. Further effectiveness is attained by clearly identifying research groups, namely customers, competitors and retail partners. These basic guidelines work, of course, if a shopping centre professional is in full control of the strategic planning and research process.
In America, there has been much talk about the effects of consolidation on who ends up holding the most puzzle pieces. With mall ownership increasingly falling into the hands of fewer players the likes of Simon Property Group, General Growth Properties and The Macerich Company, there has been a noticeable move toward corporate-led strategic planning, with some complementary customization occurring at the mall level to varying degrees. Many of these mall developers are publicly-held companies whose investors speak in terms of return on investment and share dividends, and surely welcome any economies of scale, often in the form of company-wide strategic plans and marketing programmes. Private companies are just as keen to increase their profits and they too see advantages in using quasi-generic marketing schemes to improve margins.
In recent years, publicly-traded Simon has launched a number of corporate-led strategic initiatives. The Kidgits Kids Club, Simon Marketplace customer care centres, the Simon Giftcard and the company’s branded experiential marketing platform (e.g. DTour Live!, Simon Mall for You), are a few examples.
Over at Macerich, individual malls rely on the company’s "Making Good Things Happen" motto to guide their strategic planning, participating in such nationwide programmes as the Shoes for Orphan Souls charity drive. And the king of high-profile branding, The Mills Corp., delivers its Mills TV programming to a network of malls, as well as administering the Muggsy’s Meadow online kids programme.
Parallel to this trend, the world of research as a whole seems to have invested significant resources on supporting micro-marketing and local-market level customization of data. Where government census data might have once been essential elements of strategic plans, retail marketers now rely on detailed, and sometimes even complex, demographic segmentation and consumer psychographic analysis. Designations such as "Women 25-54", therefore, are becoming obsolete, ceding their place to market niches with labels like "Caucasian/Single/Mom/30-45/Urban/Professional/Active Lifestyle/Lives in Apartment on the East Side."
Shopping centre marketers and executives in general are beginning to see how this strategic dichotomy might cause problems at the centre level, where a company’s fortunes are truly determined. That is why companies in America and in other markets around the globe are beginning to recognise the need for dual-level strategic planning, as Simon recently demonstrated when it joined Scarborough Research and Arbitron Inc. in revealing a new initiative whose goal is to develop reach and frequency metrics for the shopping centre industry. And numerous shopping centre owners and managing agents are working hard to involve as many people as possible in the strategic planning and research process, at the corporate and mall level, to ensure that at the end of the day, their centres hold all of the pieces necessary to produce footfall, increase sales and positively impact the bottom line.
According to the American Jigsaw Puzzle Society, the largest puzzle in the world belongs to Italy’s Clementoni and it is a rendition of the classical artwork, "Sacred and Profane Love". It has 13,200 pieces. That beats your average shopping centre marketing plan. But not by much.