Anna Chubotina

CEO Arricano on new analytical formulas for tracking the effectiveness of shopping malls in new realities

The 2020 summer shopping season was special and extraordinary, with new challenges and smart solutions. We have seen that many of the usual approaches to evaluating the effectiveness of shopping malls no longer work, and all aspects should be viewed through the prism of changes in consumer behavior and consumer preferences.  This is reflected in the work of tenants of different categories, and is also tracked in the dynamics of turnover.

Convenient matrix

At Arricano, the main indicators for determining growth opportunities are tenant turnover and shopping mall's traffic.  Since the vacancy rate in our shopping malls is technical, we consider it as static and unchangeable parameter, which indicates the effective operation of the shopping mall.  We track retail market trends, conduct our own research, and make forecasts. Especially interesting for us are the behavioral patterns and portraits of our customers, their requests and pain points. As a result, we can anticipate the growth or decline of a particular category in retail and make operational decisions to strengthen product groups that show positive dynamics, and in separate cases, to consider the reconceptualization of the shopping mall.

We consider the shopping mall traffic, audience engagement in the content and brand activity of the shopping mall, as well as the turnover of tenants as marketing indicators of efficiency and "getting into the query".

Three years ago, we made a bid for the sporting goods category, and it turned out to be the right decision. Sports have become a fashion for everyday life and the demand for this product category continues to grow, including due to the fact that some of our customers have switched to either a hybrid format of work or a remote one. Food outside the home was also in demand. Recently, the demand for grab&go format food has been growing, and food courts are turning into spaces where people come not only for high-quality food, but also for communication. Mood&food is the slogan of our summer and autumn marketing campaign in Prospekt shopping mall. Based on the first responses from our guests, we can see that we have correctly identified the needs of the audience of our shopping mall.
Changes in analytical approaches after lockdown

During the quarantine, the traditional methods of diagnosing the market and consumer sentiment in shopping malls have changed, so comparing data year-to-year is not always indicative. Now we are creating new traffic maps based on current data and, although it is too early to draw final conclusions, we are recording changes in consumer patterns. For example, in the past, the most visited days in Arricano's shopping malls were weekends and holidays. Now, on weekdays, traffic can be significantly higher than last year's figures. For example, the attendance of the Kyiv shopping center "RayON" on Mondays during the summer of 2020 increased by an average of 23% compared to last summer.  While on Saturdays, traffic growth averaged up to 15% compared to last year. 
Tenant turnover vs shopping mall traffic

Traffic in our shopping malls in June-August was minus 10-15% compared to the same period last year. At the same time, the turnover of tenants is either at the level of the previous year, or exceeds the sales of the same period last year. This confirms that our guests come to the shopping mall purposefully - for goods and services, and to a lesser extent  - just to "walk", i.e. the traffic is high-quality, which means that the positioning, concept and product offer in the shopping center meets the needs of the target audience.  

On the other hand, if sales were falling when traffic was growing, it would be a signal that the tenant – mix does not match customer requests. Guests come to the mall, but do not buy. Accordingly, you should either work with segments of target groups, or review the pool of tenants.

Interestingly, when in March-July, the access of visitors to the shopping mall was limited and only grocery operators and a small number of stores worked, the total traffic to shopping malls amounted to about 30% of the total number of visitors in the pre-lockdown period. This once again confirmed our research that 70% of the audience of our shopping malls are visitors to the shopping gallery. The figure is impressive, and it confirms that target groups come to the mall for shopping and entertainment, and not for basic necessities.

For example, in Sun Gallery mall in Kryvyi Rih the share of shopping gallery in the July's turnover was 67%, which means that the lifestyle and the request the audience coincides with the commercial and entertainment offer and the concept of the mall.

When shopping centers received official permission for fashion operators to work, but cinemas and children's entertainment centers were still closed, the shopping mall's traffic showed a drop of up to 20-25% compared to the same period last year. If we subtract those visitors who refrained from visiting shopping centers due to fear of shopping spaces, we get confirmation that the role of the entertainment component is only growing and it is necessary to strengthen this component in the tenant mix.

In summary, we can say with confidence that lockdown highlighted the advantages of offline and identified new areas of development, taking into account changes in the lifestyle and behavioral patterns of customers. The main thing is to feel the trends in time and adapt to new realities and formats. Weekdays have become as significant as weekends. The priority of traffic quality over its quantity has become obvious. In addition, the quarantine reality requires keeping a distance and avoiding crowds. This corresponds to the idea of high-quality targeted traffic for comfortable shopping in Arricano's shopping malls.

Source: https://propertytimes.com.ua/blogs/anna_chubotina/biznespodskazki_ot_lokdauna