Retail asset strategy needs hyper local insights to survive pandemic.
By Eliza Charley | Marketing Consultant, Neighbourlytics
Local shopping centres, mainstreets and activity hubs are usually the heartbeat of local neighbourhoods. What happens to the social fabric and local economy of an area when they completely shut down?
While this necessary wide-scale action unfolds to tackle the pandemic in our nation, local traders and retail asset managers are struggling to find a way through the immediate impact, let alone considering how they might revive in six months time.
Throughout March, our urban planners and placemaking experts, Jessica Christiansen-Franks and Lucinda Hartley, have been asked repeatedly how the retail sector can respond and hopefully recover, during a crisis of unprecedented scale in this country.
As part of our series to answer 3 Questions in 5 Minutes, here is how the Neighbourlytics’ co-founders are advising clients in this sector this week.
Question 1 What are the biggest challenges facing the retail sector right now?
There are two primary impacts according to Jessica Christiansen-Franks, CEO of Neighbourlytics.
First, the immediate change of businesses being forced to close their doors and community members being prohibited from frequenting the public places they normally go to connect.
Second, is the knock-on effect that occurs with reduced foot traffic. “We all know as urban planners that foot traffic - or creating a critical mass of activity and that vitality - is really important when it comes to creating a really great and dynamic retail precinct or great local mainstreet offer,” said Jessica last week.
It is important to understand that there is an “ecosystem-effect.” - Jessica Christiansen-Franks, CEO of Neighbourlytics.
Downstream impacts are expected to be felt for a long time due to the dynamic and delicate nature of how local places are constructed, and how quickly and widely this balance has been disrupted.
“And it’s not just retail,” she continues, “Great shopping centres have been looking at how to become experience destinations… How to get the right food retail, how to get great playgrounds, how to become real hubs of activity; and all of that is off the table right now.”
Question 2 What should decision makers be thinking about?
There is a necessary immediate conversation about the losses, however it is equally important to think about the medium to long term impacts if leaders are going to be able to plan for neighbourhoods to be able to get through this enduring crisis.
“Right now, everyone is thinking about loss of jobs, businesses shutting down, and it’s a very emotional kind of question,” empathises Lucinda Hartley, Chief Growth Officer of Neighbourlytics, explaining that we also need to “play this out in the longer scenario.”
One thing leaders can be thinking about is how communities are changing their socialisation behaviours. When we look at data for retail precincts under usual conditions, we analyse the behaviour of what else people are doing in that trade area.
“The economic indicators like spending are not necessarily a proxy for success” - Lucinda Hartley, Chief Growth Officer of Neighbourlytics.
Rather than measuring success in terms of solely economic markers, Neighbourlytics also analyses data to reveal: what are the lifestyle factors? Social values? Most-loved local activities? “It’s all about activity, but if you don’t have that kind of foot traffic, we’re seeing a situation that maybe we’ve never really seen before,” continues Lucinda.
“To become a relevant retail destination, you need to tap into local values,” adds Jessica. “What’s happening is local values and local behaviours are changing in a really significant, and almost invisible way, because it is happening in people’s homes,” she explains.
“If the social life is changing right across the whole trade area… it’s happening in a very locally nuanced way, because we are not being cross-pollinated by each other any more.”
Question 3 Best case scenario, can retail bounce back in six months?
Local destinations within the retail sector are going to experience this differently, and retail asset managers need to respond in a hyper local way.
“How it’s going to play out in Newtown in Sydney, is going to be very different to how it ends up playing out in Point Cook in Melbourne,” shares Jessica. “I think never has it been more important to think about those hyper local nuances of what it is that makes a local community tick.”
One thing Neighbourlytics are seeing already is people “expressing a real love for their local traders”, whether that be through local food delivery and remote purchasing, or online yoga video sessions.
“Engagement has become a great indicator for whether a business will succeed,” says Lucinda.
Their final word of advice for retail strategy during this ongoing, unfolding crisis of the Covid-19 pandemic? Jessica advises asset managers to “tap into that hyper local, shop local, phenomenon” that we have campaigned for and is now happening organically.
Use digital community intelligence to gain a hyper local lens on what changes are happening in social values and behaviour in real-time and use these to shape your retail strategy accordingly.
This article was originally published on the Neighoburlytics website.