In today’s world, shopping malls face numerous challenges that require them to reinvent their business models to remain relevant in an increasingly digital economy. The traditional experience that brick and mortar stores provide is being superseded by e-commerce stores that focus on seamless, convenient online customer experiences shaped and driven by advanced data analytics.
Shoppers now have more choices than they have ever had access to, and experiences, more so than products, are driving conversion rates. With this knowledge, forward-thinking shopping mall managers are using advanced analytics tools to make smarter data-driven business decisions, and it’s improving more than just customer experiences.
Considering that the largest income stream for malls is rent from their tenants, it pays to examine and analyze this critical element of their business. Tenant revenue managers are tasked with determining the best mix of stores, understanding and planning store adjacencies that drive higher consumer spending and longer mall visits, and engaging in more-informed rent negotiations with tenants. By using data and analytics, managers have the opportunity to increase leasing revenues and optimize customer journeys like never before.
Below we will explore how a Tenant Revenue Management solution uses people counting to keep shopping malls profitable and competitive.
Optimizing Tenant Mix
Tenant mix refers to the combination of business establishments occupying space in a shopping mall to create cohesive and complementary networks that support optimum sales, tenant rents, and customer experiences. A good tenant mix can be described as a variety of stores that work together to enhance the mall's performance as a whole, as well as each individual store’s performance.
But how do shopping mall managers identify the type of stores that attract customers and which combination of stores or categories yield the highest collective mall sales? With a data-driven approach, they can obtain the necessary insights for smarter and more effective strategies.
A people counting analytics solution can show how much a particular tenant’s location influences sales at surrounding stores and whether customers are likely to shop at certain groups of stores during a single mall visit by tracking customer behavior, movement and trends over a period. Footfall counter sensors placed in strategic areas throughout a shopping mall gives managers an overall view of shopping mall and individual store performance, and how customers are using and traversing the mall.
With these insights, managers can optimize tenant selection and placement and identify which stores need to be relocated, remarketed, repriced, or removed.
Data-driven Rental Agreements
Many shopping malls have a standard model that they follow regarding how much rent to charge their tenants, but they don’t always get it right. Smart tenant revenue management teams are using data analytics to make more informed decisions about rental charges based on the following three variables:
▶︎ the type, size, and location of the tenant;
▶︎ the quantity and quality of foot traffic;
▶︎ the sales productivity of the brand or category.
People Counting analytics provides accurate data to show which areas in a mall receive the most traffic and sales conversions, making those areas prime real estate for anchor stores and complementary stores. Tracking those stores’ sales productivity on an individual level gives tenant revenue managers the information they need to calculate realistic rental values. A mutually beneficial relationship should always exist between landlord and tenant, and in this case, data defines what constitutes a fair and realistic value exchange for both parties.
Flex-leasing For Pop-up Stores
With greater insight into shopping mall performance and trends, as well as customer behavior and traffic flow patterns throughout the mall, it is beneficial for mall managers to consider short-term pop-up stores and kiosks in strategic locations.
When mall managers opt for using flex-leasing models, where smaller pop-up stores do not have to commit to a full lease agreement contract, they guarantee tenants less overhead expenses. It is an opportunity to test products and concepts, increase sales and foot traffic, and enhance the customer buying experience through more visible and personal interactions.
Footfall data and analytics can guide managers in determining the location and type of products that should be implemented in the mall, and the efficacy of such implementations can be continually evaluated for optimum performance and sales conversions.
Which Analytics Solutions Do Tenant Revenue Managers Prefer?
Because the performance of any shopping mall is highly dependent on visitor traffic, analyzing this specific data is essential. People counting analytics is the most widely used solution for optimizing shopping mall performance and tenancy strategies.
Vemcount, an advanced people counting and analytics solution that combines advanced sensor technology with powerful BI analytics software provides an easy-to-understand and user-friendly report module. It shows performance for all stores in one report or divides stores into categories, e.g. clothing stores, restaurants, and so on.
Tenants can easily report sales figures online from any computer, smartphone, or tablet, and shopping mall operators can strategically segment high-performing areas for anchor stores and effective tenant mix, and define more realistic rental agreements that benefit stores and investors.
Get in touch with us to find out more about Vemcount solutions for shopping mall performance optimization.