As the market gets tougher, landlords are having to become more imaginative to get customers in. But, as Ben Cooper discovers, how the marketing budget is spent can remain a contentious issue with retailers

It isn’t every day that you see fashion models projected 100ft high on the side of a shopping centre. The stunt, which Grosvenor carried out in Cambridge last month to promote the Grand Arcade, was a first for shopping centre marketing.

Landlords are regularly accused of wasting money on marketing their sites, but, with retailers demanding a bigger bang for their buck, they are raising their game, and the kind of imagination demonstrated in Cambridge may become the norm, rather than the exception.

Retailers often feel that they are more than pulling their weight when it comes to contributing to marketing costs at a shopping centre or retail park. As a costly process that requires a multichannel approach, marketing is difficult to get right and its success is hard to measure.

The crux of the matter – especially at out-of-town parks – is that retailers feel that, while it is their responsibility to market their store, landlords should not only do their fair share to promote the centre, but should take a more imaginative and results-driven approach in their techniques.

Most landlords fund their marketing campaigns with revenue generated from tenants’ service charges. This frustrates retailers if they feel that a campaign fails to deliver – especially if it is put together with little or no consultation between the landlords and their tenants.

Value for money always takes top priority and retailers want the landlord to use every penny of their service charge to its maximum potential. A marketing campaign is expected to boost the centre’s status and customers’ recognition of it, as well as drive footfall and ensure it attracts the right type of shopper who is willing to spend more.

One of the main sources of frustration for retailers is when landlords fail to tailor a campaign to the local area and instead stick to a generic package across all of their centres. For a retailer that has stores in multiple locations, the danger is that marketing spend just pulls shoppers from one of your stores to another. “You’re robbing Peter to pay Paul,” says DSGi property director Mark Feltham. “You’re increasing your cost, but reducing the benefits to your business. I judge a marketing campaign on the increase in sales and profitability.”

Feltham says the key is knowing a local catchment and the intricacies of each retail ecology and basing a marketing approach on that information. With the level of sophistication that many retailers’ market research has reached, Feltham also believes that landlords need to do more to work in partnership with their tenants to maximise the potential the two have between them. “Each location will be different. More discussion should take place before marketing proposals are put in place, as opposed to landlords saying: ‘We’re going to do this, whether you like it or not’,” he says.

Fierce competition

With more than 13 city-centre shopping schemes set to be completed this year, landlords will need to work harder than ever to attract shoppers, and will also have to strive to convince retailers that they have the right marketing strategy in place to pull in the customers.

This, coupled with the rapid and inexorable growth in marketing technology, will mean landlords could lose out if they don’t keep up with the changing patterns. As marketing techniques become increasingly sophisticated, the tried-and-tested formula that many landlords stick to will become more out-of-date and ineffective. New techniques being employed by retailers include licence plate recognition, where regular shoppers are monitored for their shopping and spending habits and targeted accordingly with customised marketing.

A system that can track any mobile phone provided it is switched on and map its user’s movements around a centre is being tested at Gunwharf Quays in Portsmouth. The system, created by Experian, does not identify the user, but can give a clear picture of where the shopper goes, plotting what it calls a decay pattern on each person’s habits while they are at the centre.

The strength of new techniques such as this and their potential popularity with retailers means that, as the technology develops, landlords will need to keep up to date in order to meet retailers’ increasing expectations.

Marketing has become more slick and professional in the past 10 years, with retailers expecting results-driven campaigns that are quantifiable for their investment. And a considerable proportion of the top 20 advertisers in the UK are retailers. Shopping centre operator The Mall’s top 30 retail clients, for example, spend a total of£500 million on advertising every year.

The Mall marketing director John Wringe has seen the changes taking place in the way retailers approach advertising and promotion. He believes that landlords must be aware of how far things have moved on if they are to continue to be able to offer their clients value for money. “Marketing is much more on the agenda than it used to be 10 years ago,” he says. “Marketing for retailers and landlords wasn’t that sophisticated; they’ve become very self-focused.”

The key issue for retailers is that, more often than not, landlords are spending their money on marketing the whole shopping centre or retail park. Many retailers say that a landlord’s approach is often less driven and positive than their own and this can create resentment.

With service charges rising, often by 7 per cent a year, retailers expect to see returns. The cost of owning property – already a retailer’s second highest expenditure – has risen ahead of sales growth, and for a landlord to justify increasing the service charge it expects from its tenants, it needs to explain its marketing spend.

From a retailer’s point of view, there are good and bad landlords. Not all landlords have the ability to interpret the catchment and provide the perfect advertising and promotions to suit the retail offering. The most successful centres invariably cater for their demographic and this is based on careful and thorough research, a commitment to a unique marketing strategy and a genuine partnership between retailers and landlord.

An example of tailor-made marketing is The Outlet centre in Bridgewater Park, Banbridge, Northern Ireland. It is in a unique position because it serves an unusual catchment that is made up of shoppers from both sides of the border and has had to adapt to its environment.

As well as more common techniques, such as local radio campaigns and mail shots, The Outlet has had to introduce other multichannel methods to attract the catchment and adopt two distinct strategies for Northern Ireland and the Republic of Ireland.

“As an all-Ireland location, the marketing campaign had to consider the complexity and diversity of the Northern Ireland market and the Republic of Ireland market in the South,” explains GML Estates commercial director Jo Skilton, who has overseen the marketing for The Outlet. “The Northern Ireland consumer is more value-driven, whereas the consumer in the South of Ireland is very brand-driven.”

When Grosvenor first appointed DTZ to oversee its marketing strategy for the Grand Arcade, the agency had planned a very different strategy to the projections of fashion images on walls that it finished with. The initial thinking, according to DTZ director Alan Thornton, who headed the retail marketing strategy, was to base the campaign on Cambridge’s historical and educational culture. However, following careful research, it emerged that the demographic most likely to shop at Grand Arcade would not respond well to the educational and historical emphasis, whereas fashion retail would be far more successful.

By undertaking research and being flexible, the final result for Grosvenor was one far better suited to the demographic and, while the centre is still not officially open, the feedback has been positive. Thornton says: “The ones that are successful are the ones that really get to know how a shopper behaves. Some landlords are very proactive, but others sit back and think that if you open the doors, people will come in. These days, you have to be a lot cleverer about getting the right people in.”

Retail, technology and marketing are all becoming more sophisticated. The level of retailers’ consumer knowledge and the strength of the multichannel strategies at a retailer’s disposal, coupled with the challenging trading environment and rising costs, mean that retailers are expecting more and more from marketing campaigns. While some landlords seem unwilling to match their tenants’ commitment to marketing, others embrace the possibility to strengthen both brands simultaneously.

A little imagination and local knowledge goes a long way. And if landlords are going to keep up with the changing retail scene, it will be those who have the ability to both innovate and adapt that will reap the rewards.

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