Driving custom
Published: 30 September, 2008
With consumer spending squeezed by increasing food and fuel bills and retail sales falling, shopping centres are having to work harder than ever to attract customers. Fuel consumption and car park charging are likely to be the key barriers stopping shoppers from visiting their usual retail centre as they are forced to tighten their belts and save a few pennies.
Chester is one of the first cities to take the bull by the horns in a bid to attract shoppers into the city centre during these hard times. The city council is trialling a 'Free After Three' scheme, whereby shoppers can park for free after 3pm in the council's car parks. NCP, which operates two car parks in the city centre, and The Mall Grosvenor, which has a multi-storey car park with over 500 spaces, are not included in the trial, which began on July 14 and will run for three months. However, the scheme is expected to be extended if the trial is successful.
Chester City Council's parking services manager David Bennett hopes the scheme will attract customers during the credit crunch. He says: "Feedback has been very positive so far. Certainly the usage by rough counters is up on last year."
The idea was developed after surprising research showed that only 2 per cent of people in the city centre after 3pm were Chester residents visiting the shops.
"Chester, as a city centre, has for the past 10 years had a lot of out-of-town developments," says Bennett. "Broughton shopping park is only a couple of miles away on one side and on the other side is Cheshire Oaks, which is obviously very popular. Even the city centres like Wrexham have been spending a lot of money on their shopping centres, and combined with Liverpool and Manchester there's a lot of competition."
But with petrol prices rising, the question is, are people happy to drive longer distances to do their shopping? Out-of-town shopping centres provide free parking which is a benefit to shoppers, but does it outweigh the amount it costs in petrol to get there? And for those people who live too far from their local shopping centre to walk into town, can anything be done to encourage them to drive and park at their local centre?
The latest figures from Retail Traffic Index (RTI) by analyst SPSL show that footfall fell by 2 per cent in July against the same month in 2007, but rose by 8.1 per cent against a very lacklustre June.
SPSL's retail psychologist Dr Tim Denison explains: "With consumer confidence riding so low in this period of economic change, for many it's more a question of putting 'needs' over 'wants' and looking at replacement rather than addition.
"Our prediction remains the same: that the gap in retail footfall against last year will not fall below 4 per cent, though we are expecting the deficit to continue to widen from the 2 per cent figure in July. Bear in mind that floods in parts of the country last year kept shoppers away, so this latest figure paints a slightly better picture than is actually the case. That said, petrol price rises also continued to be a dampener on shopping behaviour in July, though the consequence was more a matter of where people went rather than discouraging them altogether.
"Regional shopping centres continued to be penalised, with shopper numbers down 2.4 per cent year-on-year, slightly worse than the national average, but local high streets were resurgent. There, shopper numbers last month were down by only 0.9 per cent year-on-year, proving that there is always some good news to be found."
The High Street Index from Springboard and the Association of Town Centre Managers (ATCM) points to regional cities exhibiting a greater vulnerability than all towns and cities nationally, with a year on year decline in footfall from July 2007 to July 2008 that is nearly 50 per cent greater than that across the UK as a whole.
And it seems that this vulnerability may not necessarily be short term - in the three months from May to July the average annual decline in footfall in regional cities reached 3 per cent compared with just 0.4 per cent across all towns and cities. So it seems that shoppers are veering away from making trips into city centres, possibly due to increased petrol costs or at least the perception of such.
Simon Quinn, of ATCM and the High Street Index, says: "There are many indicators that people are not frequently driving to out of town centres or bigger regional cities, although I think this might change as we run into Christmas. But it's an opportunity for many town centres to reconnect with the people in their immediate vicinity and make them realise what their local centre has to offer, even though many people will still drive for their big shop."
He points to vehicle messaging systems as being vital for encouraging people who drive to their shopping centre to continue doing so, as a lot of fuel is wasted just trying to locate a space to park. And access is particularly vital for the bigger centres which people will travel some distance to visit.
"I don't think there's any evidence of people not travelling, but they're travelling less often and thinking more about it," says Quinn.
Martin Lewtas, marketing manager at NCP Manchester, says NCP is encouraging people to drive into the city by placing its 45 car parks into three zones. Zone one is for shoppers, zone two - which is slightly further out, but costs less to park - is aimed at leisure and events, while zone three - further out again and cheaper still - is aimed at the commuter.
"It aims to drive the long-stay commuters out of the central car parks like the Manchester Arndale multi-storey," he says. "We see this as an opportunity to keep the right people coming into the city to do what they want to do, but not with an increase in costs, which are running high anyway."
A few months ago, shoppers were having difficulty finding a space on the lower levels of Manchester Arndale's multi-storey car park due to the high volume of commuters filling the spaces early in the day and leaving their car until late afternoon.
"It's had a huge effect on the Arndale. We're helping the retailers in getting people in to do their shopping. It's really about trying to change the mindset. If people have a couple of hours free, they know they can drive straight in and out, rather than being hampered by people parking there long term."
In addition, NCP is offering incentives for green parking, which Lewtas says will increase over the coming years. He has also created a flyer which he will make available at Manchester Arndale and The Trafford Centre to let people know about the zones and the green parking. "The Trafford Centre has seen footfall increase 13 per cent like-for-like because people don't want to drive the extra three or four miles into the city when they're not guaranteed a space. But hopefully we're changing the mindset," he explains.
Going forward, Lewtas also plans to introduce further incentives. "We're trying to get the bigger incentives, like zonal parking, out there first, and then we'll offer smaller ones, like competitions offering a couple of spaces free of charge, to attract custom back into the city. Things are getting more expensive by the day and we are trying to react to that," he says. "Also, Primark, as an example, is going to be open late one night until midnight and when they have their sales in January, so we can certainly look at reducing our charges and increasing turnover for both businesses as well."
Grahame Rose, business development director for car park management specialist CP Plus, suggests one option for encouraging shoppers to continue to drive when they go shopping. "In these very demanding economic times, car park owners and operators should look carefully at incentive schemes, such as validation, to attract more custom," he says.
Under such schemes customers are offered parking vouchers or validation at the retail point-of-sale, entitling them to free or discounted parking when they spend above a certain amount in store.
"Concessionary schemes based on ticket validation are very effective because they're simple to operate and ensure that reduced-rate or free parking is targeted only at customers who spend money at a centre," comments Rose.
"We find validation schemes encourage shoppers to visit a centre rather than its competitors and in addition help boost visitors' per-head spend while they're there. As the retail squeeze increases, we believe more and more shopping centres will adopt such schemes."
But Rose insists there are factors other than pricing that will affect shopper numbers during the credit crunch. Like Quinn, he suggests signage is vital for encouraging shoppers, and that the latest bay monitoring equipment helps customers by giving them a better shopping experience, and assists shopping centre owners and operators by providing them with useful data so they can improve accessibility. It also reduces traffic congestion by quickly and clearly guiding shoppers to available spaces.
Bay monitoring gives shopping centre owners and operators data on parking hotspots, so at busy times they can manage parking in popular places more effectively and improve accessibility for the consumer.
"Advanced bay monitoring systems of this kind also give data on entry/exit times and dwell times, and are particularly effective where a car park has a maximum stay time," says Rose, who adds that one of the best ways to increase footfall and boost sales during these difficult times is the simplest - smarten up your parking facilities.
"Whatever the economic climate, shopping centres that provide a clean, tidy and secure parking environment, which is well lit and signed, and patrolled by highly trained staff, will always score over the competition," he explains.
Full service management company APCOA Parking agrees that as the first and last touch point a customer has when visiting a shopping centre, the parking experience is one that should be flawless.
"Secure parking, along with friendly and helpful staff, ensures that the shopping or entertainment experience surpasses consumer expectations from the moment they step out of their cars," says Peter Stickland, business development director. "APCOA can, for example, manage the mix between contract parking and short-term parking to ensure the revenue flow is maximised and that any spare spaces are filled. We need to ensure any car park visiting experience is first felt when customers drive into the car park. The visual presence of staff around the car park creates a feeling of confidence that their cars are parked in a safe environment. APCOA prides itself on having this visual presence rather than having staff congregating in the car park office or relying on remote CCTV monitoring."
He says a good, well lit, safe, accessible and reasonably priced car park is probably not number one on a consumer's shopping list, but explains that if none of these requirements are met, customers will be lost.
"We work closely with clients to manage their parking requirements, improve the experience, increase yield revenue and encourage longer dwelltimes," adds Stickland.
"Recently APCOA has worked with an existing client to introduce an 'EasyJet-style' pricing model: book early or arrive early for the best prices. If a shopping centre is able to profile its shoppers and evaluate dwelltime, with APCOA's help it can see which times of the day the car park is less full, how long shoppers stay at the centre on average, and price-promote parking charges during the less busy times. Another advantage for the centre is that by getting the shopper to the centre earlier the occupancy demands of the car park can be reduced at peak times, making more space available for the higher charging tariff bands."
However, it's not just exisiting schemes that are feeling the bite of the economic downturn; forthcoming developments with parking facilities are also affected. As an international parking company, Vinci Park is already monitoring the impact of the credit crunch on shopping centre parking revenues across Europe.
"Parking charges make up a fairly small percentage of what people spend when shopping; they are more likely to make decisions based on convenience of location and access, and the quality of the overall retail experience, including security," says Phillip Herring, commercial director at Vinci Park. "We anticipate that those car parks that are not ideally located are most likely to feel the impact.
"Where we're certainly witnessing the impact of current economic conditions is on plans for new retail schemes. Some of these are going into slow motion, as developers wait for the critical mass of retailer pre-lets; others are being re-thought in terms of design and construction as developers bring in value engineers to tease out potential cost savings."
He points out that one potential solution is to review plans for underground car parks with a view to bringing them to the surface. "This can cut the cost of building the car park by two-thirds and give scope for easier management - savings that could still deliver financial benefits, even given any loss of lettable shopping space.
"Another solution is to opt for cheaper materials and finishes - the trade-off being the risk of earlier deterioration. Hard economic times, of course, always bring temptations to cut back on provision for maintenance - which we would argue strongly against, as being damaging to the shopper experience and hence to the long-term profitability of a centre.
"This issue is likely to become increasingly relevant as, with basic materials such as concrete and steel steadily rising in price, landlords who were planning to redevelop existing sites start looking again at the scope for modernisation. Refurbishments need to be carried out imaginatively and well, for example, to modern Park Mark 'secure by design' standards.
"In terms of contract and management structures, one outcome we foresee from the present downturn is landlords looking to award longer parking leases, to guarantee them a constant income stream regardless of economic blips."
