Consumers call the shots for properties to let. A smart decision?
Consumers who jointly choose which designation a vacant retail space should have. Is this a stroke of genius or should you beware of such initiatives?
On 17 December 2014, the following article was published online at retailnews.nl: “Consument bepaalt nieuwe winkelhuurder” (Consumer designates new tenant for shop to let). The article discussed a new concept under which consumers indicate their preferences when it comes to letting a vacant shop. While the idea is fun, it is also a little short-sighted.
There are two sides to this story. On the one hand, you need a detailed study to understand which shops are right for your shopping centre. On the other hand, how you position this retail area to consumers is also very important. But positioning alone is not sufficient. Without an attractive offering, your shopping centre will never flourish. The right solution is an integrated approach, with a unique concept.
You can approach a retail space from two perspectives, that of the consumer and that of the retailer. By letting consumers designate the use of a vacant retail space, they will feel involved in the process. And while we can see how useful this approach could be, we think it is rather short-sighted to let your decision depend on their input. Consumers’ ideas about what to do with a shop as they walk past are not necessarily reconcilable with what will work.
When choosing a retail location for a new shop, a retailer always takes various aspects into account (including competitors, market potential, the characteristics of the shop and so on) when making a decision about where to open a new point of sale. The idea behind the Dutch initiative is that the customer’s behaviour or wishes also matter. Which we don’t dispute. It is important that you always take stock of the behaviour of your (potential) customer. Studying where your customer makes purchases today and correlating this with other factors that influence your decision will allow you to make a well-founded choice about your new retail location. Customer loyalty cards and exit surveys give you the option of mapping consumers’ objective choices. It is also a good way of objectively logging what consumers want.
Finally, you must also take a shopping centre’s positioning into account. You can already get quite far if you choose the right shops that respond to consumers’ needs. But a shopping centre must always compete with other shopping centres. And that is where a good positioning and communication can make the difference, effectively convincing people about what makes your concept so relevant and unique, so your shopping centre will be a real success.