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Strategic Shopping Centre Marketing Plan

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A retail shopping centre is a particular type of investment property. If you manage, lease, or own a retail shopping centre, then the shaping of a marketing plan and its implementation will be crucial to the attraction of customers through the year and the tenants’ success for the longer term.

All stakeholders in the property are involved in its prosperity.  Property promotions are part of that. That is where the promotional campaign can help.

At the outset, it should be said that a shopping centre of any size is not usually a good investment choice for an inexperienced investor. Why are there those problems in owning a retail property? There are too many elements of retail property performance to be optimized over time.

Inexperienced Property Investors Struggle

The first-time property investor will usually struggle to understand the delicate balance of servicing tenants, attracting customers, improving the asset, and maintaining the retail property. Missing or neglecting any control factors will allow the retail property to degrade over time.  That can mean more vacancies, distressed tenants, poor quality lease documentation, and erratic rent collections.

It takes an investor a few years to fully appreciate how a retail shopping centre works, what things can be improved, and what items can be watched. As part of that, there are issues to track and shape financially, legally, and physically.

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Retail Complexity

Retail is a complex property type and shopping centres are at the higher or busier end of the scale. Consider this shortlist of issues for starters.

  • The tenancy mix by type and location
  • Current and upcoming vacancies
  • Rental payments and income optimization
  • Maintenance routines and costs
  • Capital works programs for property enhancement
  • Lease documentation (active and new)
  • Critical dates of tenant and property changes
  • Marketing of the property and the tenant offerings

Where can you start with this? There are many elements of retail property operations and financial performance that must be set and controlled. First, research and understand the property entirely before discussing the promotional activities. Include in that research the property layout, the asset condition, the services and amenities plus improvements, vacancy factors, and the tenant mix.

What has happened in the property over time, and how can that history impact the future?  There are likely to be factors of history in that subject property that you can learn from.  Previous retail marketing campaigns in the last two or three years will have outcomes that will be relevant to the future.

Financials to Watch

Budgets will also apply across marketing, but also the income streams, property maintenance, outgoings, and general property expenditure. Look at any existing budgets and last years financial history for indicators. 

Ascertain if the budgets were or are effective; see if they need addressing and modification.  Budget changes happen when the property tenant mix alters, the customer visits vary, or the property ages and needs upgrade.  Operational costs will also shift with items such as rates and taxes paid to the local municipality.

The Benefits of a Full Marketing Audit

So, next, let’s move to the shopping centre marketing audit and any promotional enhancement possibilities. The effective marketing of a retail property involves many issues and questions such as those below.

Know your property and its location. From that review, a promotional plan can be strengthened or created. The retail brand and image for the shopping centre are then enhanced.

Ultimately that brand enhancement can mean more sales in the property, lower vacancies, and successful retail tenants. The landlord can benefit long term from better rents, lower vacancies, and improving property performance.

Marketing Plan Factors

Here are the critical elements of a retail shopping centre marketing plan. You can add any other details applicable to your property or location.

  1. Desired outcomes – There will be a selection of results targeted for the various stakeholders of the property. Those outcomes set are for the property owner, the landlord, and the tenants. Ultimately, there is a focus on property improvement, which can be financially or physically.
  2. Branding – Consider your current property and its branding. Is that branding adequate when it comes to attracting or positioning the property in the customer’s eyes? Why will the customer remember your property and go to it regularly to spend money? You may need to do some property branding resets if things are irrelevant to the location or customer base. But, again, undertaking a customer survey annually around these issues can help.
  3. Competing properties – Review all other retail properties in your location that could impact your subject property and its operations and or performance. Look at those other properties comprehensively, including the tenant mix, customer base, anchor tenants, vacancy factors, rental levels, and factors of attraction. Ultimately your retail property must compete or be better than the other local retail properties. All local properties are fighting for the customer’s interest and the visitations and sales that customers produce.
  4. Sales results (historical and future tracking) – Look back in time at the overall sales results produced in the retail property. Split the sales results down into retail tenant types and tenant clusters. Some parts of the property will be more active and exciting to customers. Food courts and entertainment precincts are good examples of that. The question is, ‘How can you use the successful zones or elements of a retail tenant mix to enhance the rest of the property?’
  5. Target audience – Understanding your local area or retail catchment, determine the critical elements of your customer base and how they are likely to change. For example, there are differences in the shopping patterns and requirements of younger families, first home buyers, and mature families with no kids. They all shop at different times and for various reasons.
  6. Shopping patterns – When you assess a property and the tenancy mix for sales and potential retail trade, look at the customer numbers visiting the property on various days and within different time frames. What are the slow times, and what are the peak times? Your retail shopping centre promotions or marketing plan will need to address those factors and seasonal shopping peaks or festivities.
  7. Lease documentation – The leases in the property will likely be different in critical dates or the lease covenants that apply to the landlord and or the tenant. The only way to work through that is to do a complete lease audit of the property. As part of that review, extract all the essential lease terms, dates, and priorities. You can then set a timeline of those dates and issues to watch. The timeline should project out 12 to 18 months, so any decisions and changes can be monitored or implemented.
  8. Tenant clusters and the retail offering – Some parts of the property will attract more customers and hence more sales. When you know how the property’s characteristics are working for you and your tenants, you can improve those zones and balance the tenant mix to encourage more sales. A successful retail property has generally been enhanced to a strategy involving the tenants, customers, and the landlord.
  9. Anchor tenants and speciality tenants – There are a couple of questions to consider here. You will find it best to start those questions around the anchor tenants. Do they attract people to the property, and how do they integrate their operations and successes into the overall property tenant mix? There are ways to strengthen a retail property and its ongoing performance by integrating all the seasonal promotional activities across the mix. All tenants can be involved to make the seasonal sales promotions more successful. That could be for festivities of Easter, Christmas, and tourism events in your location; if all tenants get together as part of promotional activity, the greater the level of customer attraction. Your success in doing that can only be gauged and tracked through monitoring the door counters on all entrances to the property and sales by tenant merchandise group. Have you got access to those numbers?
  10. Tenant attraction – A thriving retail shopping centre can be immediately identified by looking at the tenant mix. Are the vacancies low? It is a known fact that a well-performing retail property will attract other tenants no matter how the economy may be tracking. The questions to ask here are centred on the property now. What are the existing vacancy factors, and how attractive is the property to new tenants? Why would a new tenant want to lease space in your retail property instead of any other similar property in the location?
  11. Vacancy factors – There will always be upcoming vacancies in a retail property given that leases expire, businesses grow or contract, and some tenants are more successful than others. So, tenant mix planning involves a forward-looking review of vacancies over the coming 18 months. You may want to keep some tenants and negotiate new leases in that case. Use a ‘tenant retention plan’ for that control system. On the other hand, you may not want or need selected other tenants in your property, so finding replacements will be necessary. Your tenant retention plan and the vacancy management system will form part of your property business plan.
  12. Property upgrades and capital works programs – Some property elements will require an upgrade. For example, compared to other investment property groups, retail properties require more upgrade activities and planning. In addition, there will be routine property maintenance and more extensive capital works programs to consider. Many of these maintenance factors will need to be timed and controlled not to impact the promotional budget, tenant sales, or customer visits to the property.
  13. Available marketing budget – This budget spend will impact your marketing choices in your promotional plan. Some media choices will be more relevant to your customer audience, so think that choice process through. For example, radio, tv, flyers, community groups, competitions, and billboards. What media choices will give you the most significant coverage in customer interest to attract sales? It is not just a matter of spending marketing money. It is a matter of spending the best money in the right way. Set your media choices and priorities for the property based on history and future customer attraction.

Implementation of the approved marketing plan will evolve from a mixture of the above items and how they can impact your client, the landlord, the tenants, and the customers.

You can now see why a marketing plan for a shopping centre is important to getting blanket customer coverage and, ultimately, more retail sales for the tenants.  The landlord benefits as a direct result.

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