Tag: Turnover

Why retail destinations should invest in consumer experiences & perceptions

Posted on: 9 July 2024
Why retail destinations should invest in consumer experiences & perceptions

 

Want to increase your visitors’ spend by 25%? Invest in your amenities.

Facilities are a vital part of retail and leisure destinations. Despite not directly producing turnover, they play an essential part in driving performance. Through research from our Shoppers Dimensions dataset– our database of over 1 million respondents across 270 UK-wide destinations which enables key performance indicator (KPI) benchmarking of assets against similar locations across the UK to contextualise performance and enhance decision-making– we analysed how various KPIs are impacted by consumers’ experiences and perceptions.

So, how exactly are services and amenities within retail destinations affecting consumers’ behaviours? How can retail destinations leverage these insights to bolster experiences and perceptions?

How do consumers’ overall shopping experiences influence their spending behaviours?

According to our research, retail destinations capable of improving their rating of a person’s overall shopping experience may recognise an increase in their average retail spend by £21. There is an uplift across the board when overall shopping experience is rated 5 out of 5, with average retail spend increasing by 25% and catering spend by 17%.

How do experiences & perceptions of toilets impact retail destinations?

It may not be a glamourous topic, but toilets are often called out by customers as an issue. They are expensive to renovate and maintain, and without a direct revenue stream associated with them, it is easy to think of toilets as a cost. Despite this, our data shows that investing in facilities can actually drive performance.

Firstly, when looking at shopping centre locations of those that rate the toilet facilities 5 out of 5, our data shows that this leads to an uplift in time that a person stays at the destination by 16%, which accounts for 12 additional minutes per customer. But how does this additional dwell time translate into spend? Customers that give toilets a top rating record a 26% uplift on their average retail spend, an increase of approximately £21.34 per customer.

Retail is not the only category affected. In fact, catering conversion experiences an uplift of 5 percentage points and the average spend on catering increases by 19%. There is therefore direct value to unlock by maintaining and improving these facilities, even if that means you have to spend a few pennies to do so.

How to attract more family groups from further afield 

Family groups can be a hard group to target, but once at the destination, they are likely to come for ‘Big Day Out’ trips which are associated with a higher average spend. For many destinations, this group tends to live further afield, such as in the suburbs of a city. When family facilities are rated higher, there is an uplift in their drivetime by 23%, an increase in their dwell time by 17% along with an uplift of 25% in  associated retail spend. Showing that better family facilities draw in these high-spending visitors from further away

How do car park experiences & perceptions impact interactions with the rest of the shopping centre?

One of the most interesting findings we came across when looking into the impact of ratings was with overall parking experience. This is another topic that consumers are passionate about; ever hard-to-please, the consumer wants it to be cheaper, with more spaces and of a better quality. But do better perceptions really lead to stronger key performance metrics? In short, the answer is a resounding “yes”. Those who rate the overall parking experience 5 out of 5 see an uplift in dwell, retail and catering average spend and conversion. The greatest uplifts are in dwell time and average retail spend. On average, dwell time will see an uplift of 17% (14 minutes) while average retail spend will see an uplift of 30%, leading to an average increase in spend of just over £25.

Key takeaway: higher perceptions equal higher spend

Overall, our data shows that the higher the perceptions, the more people will spend and the longer they will stay. This is the case when we look at the ratings for overall shopping experience, cleanliness, overall parking experience, family facilities, customer services, signage, architecture and toilet facilities. While it might not be glamourous, strong perceptions of parking experience and toilet facilities do lead to an increase in key performance indicators, proving that there is value to be unlocked by investing in these facilities.

How can CACI help?

At CACI, we understand the impact that driving improved perceptions of facilities within a retail destination can have on consumers’ behaviours, such as which amenities encourage people to visit from further away, stay longer or spend more on their trip. To gain a better understanding of how consumers interact with places, reach out to us to discuss how we can help you measure your performance and identify growth opportunities. 

Impact of turnover vs. footfall for shopping destinations in 2024

Posted on: 23 May 2024
Impact of turnover vs. footfall for shopping destinations in 2024

Footfall has historically been the go-to method for measuring a shopping destination’s performance, conducted through pressure sensor mats, light sensors tracking shoppers’ entry and exit movements, advanced camera systems and more. Although ubiquitous across the retail industry, only measuring the number of people entering and exiting a store misses important aspects of true store performance.  The current pace of change in consumer behaviors demands that commercial landlords and occupiers know more about their performance drivers if they are going to thrive.

So, why is this the case? What do commercial landlords need to know about turnover and footfall to stay afloat?

How consumers’ changing behaviours towards shopping locations affect footfall

Since 2019, vendors across the UK have experienced an overall 11.5% drop in footfall. While this may sound like catastrophic news for retail destinations, the truth behind the headline footfall figures is perhaps surprising– an overall rise in consumer spending. Although a shift in consumers’ shopping behaviours is undeniably present, its impact may not be as profound as it seems.

Frequency has been a major driver of this, dropping by 31% over the last five years, meaning that consumers have been visiting shopping places much less often. However, the amount being spent by consumers when visiting shopping locations has climbed 29% over the last five years, counteracting declining footfall. 

This increase in trip spending is not just an inflationary rise – the fundamental reason to visit and our behaviours on visits have changed as a result. Successful locations are those that are adapting to the new shopper landscape.  

How consumers’ changing spending habits, values & “missions” affect footfall

What consumers are spending any disposable income on has also been changing. While retail conversion has remained relatively unchanged, there have been evident increases in Catering and Leisure conversions on the same trips, meaning consumers are increasingly combining a shopping trip with food/drink or a leisure activity. It is this combination of shopping, browsing, eating/drinking and leisure that has led to the overall increase in spending per trip.  

These comparisons can be illustrated through what we at CACI call “missions” from our Shopper Dimensions dataset, which illustrate the trip someone is on at a given time, and attribute “missions” to the tangible actions someone takes once at the shopping destination, such as browsing, spending, time spent, etc., to assign a “mission” to each trip.  

According to our findings, consumers are relinquishing their less engaged “missions” but concentrating trips around the “Big Day Out” trip. This is illustrated in the shifting profile of the top three missions in Shopping Destinations, which explains why a decline in footfall does not necessarily equate to declining spend. At a glance:

  • “Big day out” missions are our more engaged trips. They may be less frequent, but they are ones where multiple retail stores are often combined with Catering and Leisure, resulting in a trip spend 2.4x the average mission. Since 2019, these missions have grown to 23% of all shopping missions. 
  • 37% of “spending time” missions have no purchasing associated with them. While they may contribute to footfall figures, they do not directly contribute to sales-through-tills. Having dropped off post-Covid-19, these trips are now holding flat at a lower shelf. 
  • “Routine top-up” trips are quick, functional and emotionally disengaged trips that a spend of just 47% of an average trip. These trips are dropping out of our repertoire and can be substituted online.

We can therefore see that looking in greater detail at the changing nature of the trips made provides a clearer understanding of commercial asset performance than simply tracking the overall volume of trips.

Key levers to conclude turnover & application methods to target growth outcomes

To make a meaningful impact in asset performance, commercial landlords must move beyond measuring just the number of visits and start reporting the different levers of shopping location spend.  
 
While there are nuances behind the headlines that apply individually to each location, all spend at a shopping location can ultimately be boiled down to three key levers:

  1. The volume (number) of unique shoppers they have 
  2. The frequency of consumers’ visits to a shopping destination 
  3. The value that each shopper spends per trip.

Commercial landlords should consider applying the following methods to each lever to effectively target growth outcomes:

  1. Volume: Convert footfall (visits) into ‘spenders’ and target engagement strategies at driving scheme trial; measured by the percentage of the catchment population currently shopping with you (penetration). 
  2. Frequency: Embrace the different role that your asset plays for different cohorts, diversifying the occupier offering to give shoppers more reasons to return on different missions. 
  3. Value: Determine the highest spending shopper groups to target, segment customers and tailor offers to them to increase cross-shopping opportunities and drive value.

What does good look like?

Now is the time for commercial landlords to leave pre-pandemic comparisons behind. Footfall may be down overall, but the evolution of consumers’ shopping destination behaviour serves as a reminder that relying on the past as an indication of how assets should behave will not lead to longer-term success. If anything, these behaviours have demonstrated that the types of trips people continue to use shopping locations for are more engaged and valuable than ever before.  

Our unique view into how and where consumers are spending has been made possible with the help of datasets like Shopper Dimensions, which enable KPI benchmarking of assets against similar locations across the UK and leverage transactional and data spend insights to enhance decision-making. We can help you calculate the impact of each shopper metric and the headroom compared to peers and catchment.  

To find out more about what Shopper Dimensions can do for you and your business, speak to one of our experts today.