Crunching the numbers
Published: 03 February, 2014
Collecting footfall data is becoming an ever more sophisticated operation, branching out into a myriad of valuable insights from people’s journey around a shopping centre, the impact of marketing activity, conversion from the mall into stores and an almost endless list of other areas.
Traditionally, people counting systems consisted of cameras and beam breakers – once technology was embraced over the manual ‘clicker’ method – and while they continue to offer value in terms of perimeter counts, they are limited to just that. Footfall has been a key tool in monitoring a shopping centre’s performance and a key statistic in valuation and attracting new tenants but innovations in technology and lifestyle – with the majority of people carrying smartphones – has meant that mobile tracking is now a viable way to monitor shopper behaviour. It works hand in hand with perimeter counting methods, or increasingly, in place of them.
“We count cars and monitor entrances, malls and stores in order to see a chain or journey and to get a holistic view of the people in the shopping centre,” says Springboard’s retail insights manager, Diane Wehrle. “Demand for better data and intelligence is high; it’s incredibly valuable both for the landlord and their tenants, and it represents the final piece of the puzzle; it’s the holy grail.”
This new method allows shopping centre operators to delve deeper into the way their assets are shopped than ever before - keeping abreast of changing shopping habits, identifying struggling retailers or quiet areas of the mall - and responding to those insights with the aim of increasing business performance.
“We have a rich history in perimeter counting,” says Bill McCarthy, CEO, Europe & Middle East at ShopperTrak. “Combine that with what is happening in specific zones and it provides shopping centre operators with the best picture they’ve ever had of what’s going on in the malls. Managers can look at traffic in relation to weather or seasonality, they can pick up changes in data following a promotion or a physical change to the property, or any number of other factors.”
The footfall monitoring industry has changed so much in the last 2-3 years that many of the top players distance themselves from the term ‘people counting’, favouring the broader ‘behaviour analytics’ instead.
“We believe a single total visitor count is a massive oversimplification and we see it beginning to change,” says John Godfrey, sales director, EMEA at Path Intelligence, whose clients include Hammerson and Land Securities. “The advent of mobile devices opens up a whole new level of insight - it makes the invisible visible.”
He uses the advances in MRI scanning in understanding the human brain as an analogy. Rather than relying on static x-rays as the only available tool, technology now means that medical professionals have a real time, 3D view of what’s happening inside.
Path Intelligence passively detects mobile phone signals – rather than wifi or Bluetooth connected phones - allowing it to locate and recognise unique devices and analyse shopper journeys in detail.
“Recognising a unique shopper is an important distinction,” says Godfrey. “It enables us to recognise returning visitors, levels of loyalty and staff behaviours, something that is especially valuable in complex prime sites and mixed-use developments, and when it comes to marketing analysis.”
Godfrey gives a few examples of how this new data can be used: to create optimal tenant mix; for retailer negotiations and support; for brand correlations; peel-off rates; optimising the mall for international tourists; understanding hospitality and entertainment blend and usage; driving loyalty and new customer acquisition with effective visitor experience and events you can measure the impact of; improving forecasting accuracy and using the data to inform development decisions.
According to Godfrey, mobile phone tracking provides clients with much of the information they’d previously get from a survey, except on a larger scale, and it’s more reliable because it encompasses everybody and not just those who are picked out, and agree to take the survey.
“It’s revolutionary. For the first time you can see how many people go past a store front and how many of those enter. How many of those are first time visitors, what percentage came from a hospitality or entertainment zone, how long they stayed, even what other brands they spent time in,” explains Godfrey. “And at the most advanced level our clients are developing robust, detailed retailer attraction packs to entice the brands they know will benefit most from being located in certain malls, based on the performance of similar retailers in adjacent units.”
While collaboration between shopping centre landlords and their tenants has been non-existent in the past, or at least fraught, many have seen a shift towards better communication and partnership between the two parties for mutual benefit. And the demand for each other’s data is high.
“We developed our system to be used in partnership,” says Wehrle. “It’s designed to enable landlords to pass information on to retailers so they feel they’re getting something back from the service charge. It helps them to understand their own performance; how they trade in relation to others in the same category and where they sit within the hierarchy of the centre. It’s about benchmarking.”
According to McCarthy, understanding not only who is in and out of your centre but where they are moving and where they spend their time is hugely valuable, and it has come at the perfect time, as he explains: “Those kind of insights have only been available in the last 2-3 years, and it’s great timing because shopping centre operators are beginning to evolve in their relationship with retailers. They don’t just collect rent as they used to, they partner with their tenants to help drive shoppers into retail locations. And now they’ve got access to good data, they can do that even more efficiently.”
It gives landlords a complete view, with performance measurement specialists now able to blend sales data provided by retailers with shopper analysis done on behalf of the landlord but of equal value to the tenants, like synergy with other brands, for example.
And the data can be used to enrich research or to inform decisions about an extension or redevelopment or even a new scheme in an existing client’s portfolio.
“It could be operational, helping you to answer questions like ‘how many benches do we need?’ or ‘should we put an extra escalator in?’” explains Godfrey. “Or, if you’re planning a new extension with high end retailers, you might
put on a fashion show to market it. The data would show you whether that event succeeded in driving attention and footfall to the new area, how many new unique visitors went to the extension, and whether or not they returned.”
With access to this level of data a fairly new development, do landlords and managers have the resources and skill to take full advantage of it? Not only collecting the data but analysing it fully and responding to the insights in order to improve business performance.
Both ShopperTrak and Springboard provide their clients with technical support to help them make use of the data, because although knowledgeable they don’t always have research teams or the resources to get up to speed without support, and they aren’t analysts.
In Godfrey’s experience, it can take a year of rich engagement with the newly available data to really understand the potential of the questions and answers that are made possible, and Path Intelligence offers a 12 month structured programme with full engagement and support.
Analysing data on behalf of shopping centre clients is Retail Advantage’s speciality. It is different from the other players in that, apart from sales information which it collects from retailers itself, it uses footfall data collected by other providers and works purely on the analysis side to help landlords and managers take stock of the information.
“We have a strong background in footfall analysis including the hardware and support, but we decided to focus on the software side,” explains director Gareth Jordan. “Being unaffiliated with any specific footfall provider means that we can remain impartial and present a complete picture of people counting across an entire portfolio of shopping centres using a different footfall system at each location. The client can pick and choose the counting system they feel is right for a given site and still have an analysis system that conforms to consistent business reporting standards.”
It can pull in data from various people counting systems to maintain a detailed picture of customer movement across multiple centres. The information can be viewed in differing levels of granularity depending upon the data available, and then presented graphically in charts, graphs, interactive heat-maps or in a more traditional tabular format.
“Every process becomes highly streamlined and what may have previously taken days to collect, pull together, calculate and analyse using spreadsheets now becomes one-click,” explains Jordan. “Reports can be easily shared with colleagues and everyone involved can be brought onto the same page swiftly.”
Once shopping centre operators have the analysis, Jordan believes they have the nous to use it.
“I am of the strong belief that industry leading professionals have always been very good at using the data available to them to improve business performance. Any kind of tool, especially the latest digital analytics, should be there not to replace expertise but to enhance and streamline processes to offer a more detailed picture for experts in their field to work with and use to their advantage.”
Privacy is a big issue in data collection. Privacy advocate groups have spoken out against mobile phone tracking fuelling media debates on the topic. But experts emphasise there is no way of knowing anything about the carrier of a mobile phone from the tracking of its signal (except via Bluetooth) – apart from nationality in the case of tourists – and all data is anonymous and aggregated.
For Godfrey, the privacy pitfalls come down to public perception of the risks: “The Snowdon / NSA scandal has brought renewed awareness of snooping. There are different situations in different countries so there’s no one global view but the problem is the perception of risk, not the actual risk,” he says.
“Mobile phone signals are in the air so what we do is purely passive. We capture a code, see it in different places and derive meaning based on assumptions. The data we collect is used to understand people’s experience in the mall and to improve it, so it benefits visitors. And although negative publicity is damaging and centre managers are sensitive to that, in my experience the fear of risk hasn’t been a barrier to adoption.”
ShopperTrak’s McCarthy agrees that privacy is a very important topic but he says is “it isn’t always as scary as it might sound in the press” and he believes the managers of retail businesses are working hard to straighten out the issues.
“The industry is focused on this,” he says. “We are part of the Future of Privacy Forum based in Washington DC where there is strong participation from some of the largest retail organisations in the world. The group is making good, smart decisions in dealing with mis-information and educating the public to understand that mobile tracking helps retailers to give shoppers a better experience.
“Online retailers collect a lot of data to provide their customers with the best products and information and it’s the same on the bricks and mortar side. Are the right products in the right locations? Are stores focused on experience? Are there ways to reduce queues? All of this information can be gleaned from data to provide a better shopping experience.”
Despite concerns, take up is high. Two years ago Path Intelligence was deployed in two countries, now it’s active in 16 with offices in the UK, US and Asia, and it experienced c.500 per cent growth last year.
“The industry will move increasingly - like almost every other sphere taking advantage of ‘big data’ - towards evidence-based decisions,” says Godfrey. “Footfall will fade and shopper hours [unique visit x dwell time] will replace it as the headline KPI that offers predictable performance.”
Retail Advantage’s Jordan says they are seeing a renaissance in data analysis in the retail industry, and predicts more change to come as strategists realise the power of using current data to make effective decisions that come from complete awareness of their business situation.
“We are seeing a big push toward more analysis of marketing and promotional impact and also how effective the introduction of new experiential retail elements are on footfall and sales conversions,” he says. “This is something we see as gaining momentum over time and we are focussing keenly in this area to give our clients the edge.”
Wehrle too says the appetite for this kind of data is “humongous” with landlords using the insights at board level to make key business decisions, but she says it’s important to refine the current data collection and analysis techniques before moving on to develop a new tool, and Springboard plans to spend the next year enhancing its service to deliver bespoke packages that exactly match its clients’ requirements.
McCarthy believes the change in this area of behaviour analytics is likely to be constant for the next 2-3 years.
“There is critical mass in interest in this type of information, and while adoption is widespread, it will continue to grow. We will discover new ways to combine data sets, dialogue between shopping centre operators and their tenants will open up and more and more organisations will see the potential in data that can give them a competitive advantage.”