When you work with retail shopping centers from a leasing or management perspective, there are many things to look at and compare. Ideally, you want to stay ahead of the retail competition. Customer interest is a valuable factor to attract and maintain. (NB – you can get plenty of retail shopping center tenant mix tips in our Snapshot series right here)
So, where do you start with all of this? Have you got a shopping center to manage or lease? Look at what you have now to lease or manage, and then consider the other properties in the precinct or region.
Look at your retail property and the other shopping centers that could be retail ‘competitors.’ Inspect the other properties, the tenant mix, the location, the customer base, and the prevailing shopping conditions. You can learn a lot by looking at other properties.
The checklist approach is quite valuable as you move through the comparisons. When you understand the competing properties, you can develop and address specific or concerning retail strategies. You can build on your shopping center strengths and resolve weaknesses in retail performance.
Gather the Facts
So, exactly what are you looking for specifically when comparing properties? How do you do this analysis so that you have the right facts that you can use? A simple approach will get you there.
You are looking for the strengths and weaknesses in each competing property. Get deeply into retail analysis, without the other property owners or managers being aware. Take pictures and make notes.
You are assessing the pressures that those other properties may apply operationally to your shopping center, the tenant mix and sales or retail trade. When you understand the shopping and customer pressures for the region, you can take some deliberate and direct action to protect your tenancy mix and retail profile.
A Full Shopping Center Assessment
Here are some ideas to help you with this retail shopping centre assessment. You can add items to this list based on your location, property configuration, customer base, and property age.
- Size, layout, and mall configuration – compare like with like from a property perspective. Assess the size of the property and the configuration. Look at the number of shops and the mix of tenants. Understand how the tenants are positioned around the mall areas and common zones. You may be able to learn something from the layout of other properties.
- Common areas – the common areas are likely to be different in configuration, services, and layout. Look at those zones to understand if they are servicing the retail customer as required, efficiently and effectively.
- Vacancies – empty shops can be a problem impacting customer interest and retail sales. Review the tenancy schedule for a shopping centre to understand where the vacancies are, and when vacancies are likely to occur. Look for the leasing strategies to resolve the pending vacancy.
- Access – as part of the access assessment for the shopping centre, look at roads leading to the property, the entrance points, and customer car parking. Understand how easy it would be for a customer to get to the property and undertake their regular shopping requirements.
- Public transport – review the taxi ranks, bus drop off points, and rail points to see how they feed people into the shopping centre. There may also be community bus services to consider as part of service
- Lighting and security – customers like to feel safe and secure as part of undertaking their regular shopping. Look at the factors of lighting in the common areas and factors of security in and around the shopping centre. Look for the associated problems of vandalism, vagrancy, and personal safety. Special strategies may be required to maintain appropriate levels of security and safety.
- Concierge desk – any medium to large shopping center should have a concierge desk to help retail customers with their shopping needs. The concierge desk will be a staffing cost to the property and the marketing fund.
- Cleaning of common areas – the larger the shopping center, the greater the frequency of cleaning in common areas. Special response teams will be required to address spillages and ongoing presentation.
- Customer base – identify the differences in customers and customer interest between properties. Some shopping centers will be different when it comes to foot traffic and customer types.
- Specialty shops – review the number of shops in the shopping center, and as part of that assessment look at the merchandise groups, shop presentation, and the types of retailers. Some tenants will be better than others from an ongoing customer sales perspective. Differentiate between standard retailers, destination shops, and merchandise groups.
- Signage – The signage on the specialty shops will also be important to help bolster sales and customer interest; the signs should be standardized, optimized, and customer relevant. The lease document for the property should help with signage control and standards.
- Anchor tenants – understand how the anchor tenants may be trading on a seasonal basis. A review of sales figures will help you look at trading patterns and relevance to the customer base.
- Tenant mix and clustering – understand the tenancy mix and how it works across the retail property. There will be several tenancy clusters to review for customer relevance, sales encouragement, and presentation. A successful shopping center will typically consist of several tenancy clusters carefully considered and positioned for maximizing customer interest and sales.
- Signage and appearance – look at the property from a customer and shopping perspective. The shop fronts, the common areas, the car parking, the surrounds of the building, and the overall appearance of the shopping center must be good to exceptional in all respects. Customers will soon move away from a property where they see weaknesses of presentation and cleaning.
- Marketing strategies – there will be differences between shopping centers when it comes to promotion and marketing. What are the other competing properties doing now when it comes to seasonal promotions and local celebrations. Can you do things more effectively?
- Community group involvement – encourage local community groups to use stalls and booths in your retail mall. Some controls will need to be exercised, but the logic and strategy is useful in creating customer interest as they shop.
- Marketing budget – Every shopping center should have a marketing budget and promotional campaign for the financial year; the effectiveness of the campaign and the budget should be tracked for effectiveness and results. Seasonal celebrations and customer involvement will be at the center of that promotional strategy for the property. The marketing budget will be part of the business plan for the property on an annual basis.
So, there are many things to look at when it comes to assessing and comparing the competing retail shopping centers in your location, town or city. You can now see why a checklist approach is valuable.
The interest of the customer and their shopping interests can and should be encouraged over time; it should be sustained as part of a retail marketing strategy. Shopping centre managers and leasing specialists are property specialists; they should be acutely aware of these special retail factors that can impact property performance.