Taking the pulse
Published: 07 April, 2011
Customer traffic is the lifeblood of any retail or shopping centre destination and in the two past decades footfall measurement has not only taken root but has evolved into a major service. Sean Kelly investigates the evolution of customer counting systems
Technology has transformed not just customer counting but the identification of where and how they move. The way in which the captured data is assessed against a host of other data sets including maps, weather and historical information is turning the ‘art’ of retailing into a science. Furthermore, customer traffic analysis is becoming even more integral to future management and successful retail operations as efforts to identify and understand the customer intensify.
However it’s an industry that has experienced growing pains. In the early days footfall counting by human hand was more extrapolated guesstimate than accurate estimate. Even today there is industry-acknowledged error of accuracy in the technology and, beyond that, potential for so-called ‘customer abuse’ of both systems and data. Industry lore has tales of centre managers resisting systems so head office wouldn’t see the ‘real’ (rather than manager-reported) figures and of managers repeatedly walking and waving clipboards in front of the counters to, ahem, ‘assist’ numbers.
Hugh Radford, who was at Hillier Parker working on high street shops in the South of England in 1991, recalls the early days of customer counting with a certain wryness.
“In one sense it was the early days of footfall measurement,” Radford, now head of UK retail development, investment and leasing at DTZ, recalls. “The measurement of footfall over the past 20 years has evolved in to an industry in itself. My feeling, however is that the retail industry doesn’t tend to take too much notice of the actual numbers as many schemes measure it in different ways and some schemes still appear to have footfall figures that beggar belief.”
“Footfall back 20 years ago was often counted by nice ladies using clickers and done once or twice a year,” recalls Tony Longstaff, centre director at The Shopping Centre in Milton Keynes (now thecentre:mk) from 1994 to 2007. “Then we introduced an infra-red beam system at each entrance which counted people when they walked across the beam. The problem came when people crossed the beam at the same time: they were counted as just the one person. Eventually we moved to a camera-based system using overhead cameras and a computer programme. As I recall this had limitations because it didn’t count people above or a below a certain height. We constantly had to adapt the computer programme to factor that into the equation.”
Longstaff, now head of marketing effectiveness assessment agency Marketing Analytix, believes customer counting systems have grown in importance.
“Current systems enable a centre to use the data to more closely match staffing levels to footfall,” he says. “To this day I don’t think customer counting systems are used as comprehensively as they might be. Consistency remains the biggest problem. Also, few centres use the tremendous data to enable them to drill down and measure the effect of their various advertising campaigns and onsite promotions and events.”
PFM Counting Solutions, founded in 1984 as Lee Integer, has evolved industry technology from simple counting systems to current ones utilising Doppler radar and stereo CCTV. Today client centres include Westfield London and the soon-to-open Westfield Stratford, among others.
“Over the last 20 years the footfall industry has had a chequered history with unreliable technologies being offered to the market too early by suppliers genuinely trying to succeed by moving the technologies forward too quickly,” says PFM director Dave Halstead. “This has, at times, dented the confidence in using footfall figures as a KPI, but with each year new technologies arrive and make improvements to the accuracy and reliability of the figures.”
Nick Gowens may not have physically given birth to one of the modern-era shopper counter system in the UK 21 years ago, but Gowens who was then at Business Blueprints, certainly played ‘corporate mid-wife’ to the delivery of one of the country’s trend-setting systems at Meadowhall in Sheffield for developer Eddie Healey and his Stadium Developments team as they opened the centre in September 1990.
The early 1990s also marked a wake-up call for the industry.
Over the next eight years Gowens installed systems into centres including Healey’s CentrO in Oberhausen, Germany in 1996 – into which the largest system of its type at that time was installed. “As other systems became available we tried putting them in for other clients. Some were successful and some weren’t. It was a learning process for everyone with the technology. And that’s how the industry came together.”
Gowens, who launched ShopperTrak forefunner RCT Analtyics in 2000, wasn’t the only one who had done his sums on customer counting.
Jon Gallagher went into business with Brian Barnes in the same year Shopping Centre launched and, backed by three business angels, rolled out FootFall in 1993. They installed their first test-bed system at The Galleria, Hatfield (then managed by future FootFall employee Bill Donald) before selling systems to The Shires, Leicster and others. A corporate strategy shift by Gallagher in 2000 refocused FootFall from an engineer and equipment supplier to a data supplier, enabling the creation of the FootFall UK Index. FootFall was sold to credit-checking business Experian six years ago.
Today Neil Bennett, a former retailer with management and site location experience, is global product manager of Experian FootFall.
“Customer counting has become crucial for any manager to accurately gauge the demand and judge success or failure,” he says. “It became a measure not only to bragging rights but for assessing the relative rank of a centre’s attractiveness within the competitive landscape and for use in what could be robust rental discussions with tenants – way before turnover rents models were given serious consideration here.”
Bennett believes customer counting is still one of the fastest data sources available to assess the health of the UK economy. He believes FootFall’s weekly UK index is a “game changer” in terms of allowing industry executives to have a near-immediate link to performance levels.
Current growth in the industry is driven by individual store entrance counting. Sector companies report increased retail portfolio purchases to drive conversion rates (the proportion of visitors who actually make a purchase) - which are often much less than 50 per cent - higher. For Experian FootFall, approximately 50 per cent of client-based business is retailer installations. ShopperTrak RCT globally reports about 75 per cent of business is focused on retailers. ShopperTrak has installed counters in all the stores at Liverpool One and at St. Pancras Station, among others.
“Retailers want to understand the conversion rate and the opportunities missed,” explains Footfall’s Bennett. “Retail sales are a delicate balance of the ability to drive people into the store, the ability to make individuals transact - all of which is dependent on product, price and service proposition.”
“A great example of moving ahead and embracing the new technology has been with one of our clients McArthurGlen Designer Outlets who not only count people at their main entrances but count at most of their retail store entrances,” says PFM’s Halstead. “This certainly gives them the big picture and operationally helps them to manage their business more effectively.”
UK company Path Intelligence has developed mobile phone location technology that allows retail, travel and destination owners to understand the way their customers or passengers flow through their locations.
“Counting alone does not give offline retailers sufficient information in order to compete with online retailers who know so much more about shopper demographics and behaviour,” says Sharon Biggar, Path Intelligence co-founder and chief operating officer. “Online retailers have a wealth of information about how shoppers behave – how many times shoppers have come to the site, what products they have purchased and perhaps most importantly what products shoppers have looked at and not purchased. In order to compete, offline retailers need this level of information. Luckily technology has moved on and it is no longer necessary nor sufficient to simply ‘count’ shoppers into ‘bricks and mortar’ stores and malls. We now have the ability to understand their behaviour in-store and in-mall.”
“In 20 years it’s my view that you won’t be talking about how counting or any measurement is achieved - the focus will be what you do with that knowledge,” FootFall’s Bennett says. “Customer counting is becoming an insight industry. How you utilise your data and deliver reporting solutions to answer business questions will be everything. We’re talking about evolving the industry further to understand customer behaviours.”
“Crucial will be how customers manage the data they have,” ShopperTrak RCT’s Gowens adds. “Measuring the ‘health’ of the mall or store will be an imperative as long as there are shoppers.”
