Data analysis

Published:  01 April, 2007

Shopping centre owners are becoming more sophisticated in the way they use their footfall figures, according to an expert in the industry.

Nick Gowens, of ShopperTrak RCT, says mall owners are increasingly understanding how important the data is that they collect from their people counters. He points out that this data now comes under greater scrutiny than ever before.

He explains that measuring conversion is a key factor for both mall owners and retailers, who have realised it doesn't matter how many visitors there are per year if a large percentage is not parting with cash.

"What we're finding, and linked to our research and consultancy side, is that mall owners and retailers like to measure conversion," says Gowens. "The days of mall owners just wanting big numbers so their letting agents can impress propective tenants are going."

Gowens says conversion rate intelligence is critical to the performance ratings of stores, departments and individuals; to the measurement and development of customer service strategies; to the establishment of benchmarks for all strategic and operational activities; and to the development and measurement of field management incentive programs.

Gowens explains that even a 1 or 2 per cent increase in conversion can have a huge impact on retail performance, and ultimately rent.

Meanwhile, tenants are understanding the benefits of installing their own in-store people counters rather than relying on the data which comes from centre management. Gowens explains that retailers often don't trust these figures, which can make them appear to be underperforming, and so blame the figures as inaccurate.

"Retailers are now challenging and questioning figures from mall owners, and are now looking for good, reliable, independent information," adds Gowens. "Retailers are also much more aware of the value for money they're getting out of the service charge, and as they get a greater understanding of the systems, they're wondering how much data they're actually seeing.

"In the past it was a service charge item and retailers may have got monthly or weekly headline figures, but now they expect more than just details of how many people come to the mall. Retailers are becoming a lot more aware of the use of the data and the value for money of the systems."

The trend in the US for an increasing number of multiple retailers to install their own in-store people counting systems is set to make an impact in the UK over the next two or three years, reckons Gowens. He says in the year 2000 only 5 per cent of typical mainstream shopping centre multiple retailers in the US, excluding grocery retailers, had customer traffic systems installed; while in 2006 that figure had gone up to over 30 per cent. "We expect retail business to overtake mall business in the course of the next two or three years in Europe," says Gowens.

He explains that large and established store groups such as Apple and Louis Vuitton are already installing their own systems. But what does this mean for the mall owner?

"If they don't have their own credible data, it could leave them quite exposed," says Gowens.

Meanwhile, for the tenant, if information is not shared, they may not know what the footfall is across the whole mall, but they will know what's going on in their own stores and what traffic is moving past their front door. "A mall owner could argue that's only one part of the mall, but it gives the retailer the chance to know whether the traffic flows past their store have dropped or risen," says Gowens. "Mall owners have had their own way for a long time but the balance is switching."

Dr Tim Denison, director of knowledge management at SPSL, which installs counting systems into retail units, says every effort should be taken to ensure retailers work with their landlords to understand their customers' behaviour better.

"The real issue, as we see it, in locating counting systems at key nodes, including outside stores, is how the centre and retailer alike can benefit from such data," says Dr Denison. "Inevitably people pass these points on multiple occasions during their trip to the centre, and while some sense of relative volume flows at spot points can be constructed, the fact that the systems will count cleaners, security staff, teenagers 'hanging out' and a whole plethora of non-shoppers, diminishes any real value in the data in learning more about the shopping experience."

He points out that while retailers relish the prospect of calculating 'peel off' data (the proportion of passing traffic that enters their stores), in reality they're disappointed by its quality. This in part stems from the explanation given and partly from the fact that counting flow past a store has inherent frailties. For example, at what distance from a store would you deem someone walking past as being within your 'peel off' calculation?

"We hold that only counting shoppers crossing the door threshold into a retail outlet can give accurate feedback on 'how a tenant is doing'," he says. "You only have to go to any shopping centre to see that it's part of the behavioural culture to congregate around doorways, meeting and waiting for others.

"It stretches the imagination somewhat to think that loitering around doorways fairly reflects the trading performance of retail tenants or that collecting such data serves any useful purpose for mangers or retailers.

"We're yet to see shopping centre managers and their tenants consolidating and sharing data. In theory there is mutual reward; in practice I'm still waiting to see any examples of shared benefits."

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=== Latest people counting system from Biodata ===

Biodata's latest Video Turnstile people counting system is designed for large-scale installations, monitoring hundreds of doorways.

The system comprises CCTV cameras linked to units which detect, count and record people passing underneath. The new software supplied with the system runs under Windows on the controlling PC, which allows users to easily change settings that were previously not available, or had to be set with switches on each of their counting units. Now managers can change settings without leaving their desks.

In addition, when setting up the system, it helps to temporarily connect the CCTV camera to a television monitor so the user can precisely position the area people have to cross to be counted. The system can be set to count people going straight ahead or turning sharply left or right, and can also be configured for accurate crowd counting.

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=== Contacts ===

SPSL: 01908 682700

ShopperTrak RCT: 01491 615330

Biodata: 0161 834 6688

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