What’s new October-November 2012


Directional Insights’ Spotlight Series

Directional Insights’ Benchmark Reports have been an essential tool for property professionals since 2007, providing statistically reliable standards against which individual centres of all types have measured their performance.

The next instalment of Benchmarks will be released in 2013. In our ongoing quest to provide insightful analysis of consumer behaviour for the shopping centre industry, Directional Insights is now also producing a Spotlight Report Series. These Reports draw on our Benchmark data set of 27,000 in-centre customer interviews, and investigate particular aspects of shopping centre usage, purchasing patterns and consumer behaviour.

Spotlight on Food

In our first Spotlight Series we examine consumer’s food shopping behaviour.

How do Australian consumers shop for food in shopping centres? What type of customer is attracted to particular food offers? How does their relationship with food influence the way consumers shop and spend time in the shopping centre?

In 5 Spotlight Reports, we answer these questions and many more.

• Spotlight on Speciality Fresh Food

• Spotlight on Take-Away Food

• Spotlight on Cafes and Restaurants

• Spotlight on Main Food Grocery Shop

• Spotlight on Top Up Grocery Shop

Contact Directional Insights NOW for your copy of the reports, or to arrange a free presentation of the findings for your research, development or marketing team.

The Specialty Fresh Food Mission

Walk into any supermarket and you are immediately greeted with a bountiful display of fresh produce. The most engaging of these present what Michael Pollan describes as “supermarket pastoral” – rich imagery of freshly harvested produce and earthy, wholesome supply lines. They give the sense that what you are buying has been nurtured in a healthy outdoor environment and will in turn nourish and sustain yourself and your family.

In their pursuit of the high margins available on fresh produce, Australian supermarkets have done a good job in cultivating such images (Woolworths led the field with its ‘Fresh Food People’ positional statement in 1986). But while supermarket fresh food sections provide a compelling offer for many customers, fresh food specialty stores still garner 40% of Australia’s total spend in the category.

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For shopping centres, specialty fresh food stores contribute not only to a cohesive tenancy mix, but to the feel of a centre: there’s nothing like a bustling fresh food precinct to add ambience, variety and authenticity to the retail environment.

The shopping centre’s historical roots are in the marketplace, and nothing says ‘market’ like fresh food.

Fresh food adds (or should add) vitality to the shopping centre environment, but it also has specific appeal to particular customers. Currently 13% of all visitors to Australian shopping centres, and around 24% of visitors whose main reason to visit was grocery shopping, visit a specialty fresh food store.

Directional Insights’ Spotlight report on Specialty Fresh Food reveals a profile of these customers: three-quarters of them are female; they have higher average household incomes than non-fresh food customers; and are more likely to be in a married/defacto relationship with kids.

In compiling this report from in-centre interviews with 3,550 consumers, we found age to be a powerful determinant of fresh food store visitation. Fresh food customers have an average age of 50 years – 5 years older than the Australian shopping centre average.

Only 12% of shoppers visiting a specialty fresh food store were under the age of 30; 34% were between 30 and 49 years of age; 55% were over the age of 50. The age of fresh food customers is another reminder that with an aging population, shopping centres need to be increasingly conscious about how they cater to older demographics.

Consumers in this age bracket are attracted to the healthy wholesomeness of fresh food, but are also looking for more sophisticated, relaxing retailing environments for their other purchases. They’re also amongst the best customers.

Specialty Fresh Food shoppers between the ages of 50 and 69 have the highest average spend per visit to an Australian shopping centre.

Fresh food customers are more Mission focused than the benchmark averages for Australian shopping centres, a higher proportion come from the primary trade area, and they are, on average, more frequent visitors.

They are also what we would call ‘productive’. That is, they have a high average spend per minute of time they are in the shopping centre. The average for non-fresh food store visitors is 74 cents per minute. Those visiting a fresh food store spend 94 cents for every minute of their visit. That additional 20 cents per minute makes them high value customers!

A high, fairly intensive spend reflects the nature of food shopping. It also presents an opportunity to attract further custom by leveraging the positive attributes associated with quality fresh food, and the self-nurturing mind set of fresh food shoppers. How might you use the positional value of a quality fresh food market to leverage further visitation, cross shopping and expenditure in your centre? By Peter Kelly Back To Top

Dine in or Take-Away, the Social Shopper

Shopping centres are social spaces. When we ask consumers to record their main reason for visiting an Australian shopping centre, around 8% say that on the day of the interview they have come to either browse or visit with family or friends.

A lot more, of course, come to socialise in other ways: to shop with companions, to be amongst other people, to immerse themselves in the bustle of the marketplace, perhaps to enjoy some entertainment.

Food is central to sociability in all cultures, so it’s no surprise that food catering outlets help facilitate much of this social activity in shopping centres.

Directional Insights’ Spotlight Series reveals new insights about consumers who purchase food catering in Australian shopping centres.

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Firstly, they are social. They shop in larger average group sizes and are more likely to visit with a companion. They are also far more likely than the average customer to be Leisure Shopping, with almost half of Cafe/ Restaurant customers, and 36% of Take-Away Food customers recording this as their shopping mode on the day of interview.

This sociability, though does not make them overly productive. They stay for longer but spend less per minute than overall Benchmark averages.

For Take-Away Food customers, this result is close to the average expenditure per shopping trip.

With Cafe/ Restaurant customers spending an impressive average of 101 minutes in the centre, though, their average spend is a healthy $85, compared with the Benchmark average of $72. This is despite these customers having a slightly lower average income than Directional Insights Benchmarks for Australian shopping centres.

Take-Away Food customers on the other hand have higher average incomes. This relationship between income, time in centre and expenditure tells us much about the profile of shoppers and the shopping trips they conduct involving food catering purchases – especially when we combine it with other data from the Spotlight Reports.

Cafe/ Restaurant customers are on average older, by around 10 years, than Take-Away Food customers. They are over represented in the over fifty age brackets, just as Take-Away Food customers over represented in the under 30 age bracket.

Cafe/ Restaurant customers are more likely to be retired or superannuated, Take-Away Food customers are more likely to be in paid employment and live in households with children.

So even though they are spending more time in the shopping centre than the overall average, Take-Away Food customers are, at least compared to Cafe/ Restaurant customers, relatively time poor. Their longer stays are explained by the nature of their shopping trip:

Take-Away Food customer visitation is higher for all named stores and categories than the overall Benchmark averages; the only exception being supermarkets which attract less patronage.

Customers who purchase from Take-Away food outlets are on average spending more time and visiting more shops to make their purchases, and when they do purchase their spend tends to be higher.

Cafe/ Restaurant customers similarly show a higher percentage of visitation for most stores, with the exception of supermarkets. There is an ambivalent relationship with Discount Department Stores. Target receives a higher than average visitation, Big W equivalent, and K Mart lower than average.

Department Stores, though, are very well patronised by Cafe/ Restaurant customers. These customers are more refined in their tastes, even though their household incomes are lower than Take-Away Food customers.

In a forthcoming Spotlight Report we show that K Mart tends to attract lower income earners than Big W and especially Target.

Cafe/ Restaurant customers on average have time to spend, are willing to shop around for their purchases, are attracted to better end merchandise, and spend well when making purchases. They do, however, shop less frequently than both the average and the Take-Away Food customer.

Take-Away Food and Cafe/ Restaurant customers are two different types of customers. Though both are inclined more towards Leisure Shopping than the average, they also shop in contrasting ways – the result of their employment patterns, household structures, life-stage and personal predilection.  Back To Top

Food Courts on the Go

When Roselands opened in 1965, it included a dining hall offering dishes ‘from all the kitchens of the world’. Its international flavours were a gastronomic symbol of global consumer culture. Roselands brought the world to suburban Sydney, and the ‘Four Corners Dining Hall’ was billed as ‘the most exciting eating-out adventure ever introduced into Australia.’

Thankfully multiculturalism has made such eating experiences commonplace. But this is just one example of the ways that shopping centres have been at the forefront of changes to Australian life.

Subsequent changes in their take-away food offer, demonstrate that shopping centres have also been responsive to the shifting demands of consumers.

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Fast food came to Australia in 1968 with the opening of the first KFC. By the late 1970s, almost twenty-five percent of Australian money spent eating out was on fast food. Social researcher Hugh Mackay notes that if fast food outlets began as a means to ‘eat and run’, they became a social space where families and people could ‘stop and talk to each other’.

Consumer demand for such eating options paved the way for the food courts that were introduced into Australian shopping centres in the 1980s. They followed similar principles: quick service, standardised quality, and a bustling social atmosphere.

Food courts arrived with the expansion of shopping centre leisure and entertainment facilities. They made it more convenient than ever to extend the one-stop shopping trip to include a meal, and encouraged shoppers to spend more time and money in centres.

The effort the industry invested in these eating environments was in turn recognised by the fast food chains themselves. When McDonalds opened in Westfield Chatswood in 1987, it was the company’s first attempt to share facilities with other food retailers in the country. McDonalds Real Estate Director, Tat Cork, declared: “It took a centre as good as Chatswood to get us to change our established trading pattern… We built our name on quality control and normally the only way to ensure that is to operate in your own environment… But the quality and the finish of the Food Court is so good we decided if we were going to pioneer, this was the place to do it.”

Food courts, including McDonalds and other global chains, have become a staple of sub-regional and regional shopping centres in Australia. And they will continue to evolve with changing consumer expectations.

Recent research at Directional Insights indicates that consumers are looking for both healthier options as well as atmospheric changes. This is particularly the case when we begin to segment customers to consider how we might best cater to people across a range of lifestages, and depending on the type of shopping trip they are undertaking.

For many men, food courts remain a perfectly viable form of food distribution: they’re convenient, efficient and combine well with the Mission shopper mentality of the average male consumer. If anything were to change, they’d like more variety: more healthy options for when they feel like looking after themselves, but also an even wider range than the current offer of fast food for when they feel like chowing down on something containing a generous amount of fat and salt.

Women tend to be more discerning. Again the food court can work for women Mission shoppers: “If it’s a sales day I prefer to just grab something and go back to the sales.”

More relaxed shopping trips require different foods and spatial moods. Food courts for this mindset are too noisy, too crowded. Consumers with more sophisticated tastes don’t “want something that’s been in a food warmer for 3 hours.”

Even cafes can fall short. We receive complaints about food being sickly sweet, too fancy, or portions oversized (yes, this was a 52 year old woman, not a 20 year old male).  Back To Top

The Buzz

Directional Insights are very pleased to announce another new team member, further expanding our capabilities in providing high quality research for the shopping centre and property industries.

Responding to client demands for more qualitative research, Amanda Buckland has been working with us for a few months now, and we thought it was time that we formally introduced her to you.

Amanda has over 17 years experience in qualitative research in the UK, Australia and Asia Pacific region. She has worked on both agency and client-side, including four years with the UK’s largest retailer, Marks & Spencer. During her time with M&S, Amanda’s research and insights helped transform its menswear business unit into the most profitable unit in the company.

Amanda has expertise in both Consumer and B2B research. In a distinguished career she has worked with global and Australian brands including Audi, Tesco, Heinz, Mars, Guinness, Budweiser, Qantas, Colgate, Kellogg’s, Uncle Tobys, IBM, Hallmark Cards and Virgin.

We are delighted to have Amanda onboard and look forward to introducing her to you personally to discuss your qualitative research needs. Please feel free to contact us for more information about qualitative research, the insights it provides, and what it can do for your company in the current retail environment. Back To Top

Customer Service – the Ancient Art

In a recent article in Inside Retailing, Stuart Bennie provided a reminder that the past has much to teach us. He quoted C.H. Bromhead who was critical of the brand segregation of cosmetics in 1920s department stores.

I’d like to provide another example of what pre-World War II department stores might tell us about retailing – in this case customer service. In the inter-war period, Australian department stores stood at the peak of their powers. Massive, vertically integrated operations, they ran their own manufacturing plants, and dominated city skylines and retail trade. Mail order deliveries extended their reach deep into regional areas. Their control over the supply chain has only recently been surpassed by today’s supermarket giants.

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When we think of these stores, we picture their magnificent facades, but the lifeblood of their operations was customer service.

Buried in Box MYERS015 962 of the (also magnificent) Coles Myer Archives sit the 3rd, 4th and 5th year homework journals of one G. Conning, a Melbourne man who worked in the furniture department of Myer from around the mid-1930s – that’s right, 5 years of ongoing training, run on week nights with homework!

The contents of his 3rd year journal (1937) tell us something of the depth of this training: The Structure of Timber; The Physical Properties of Timber; The Mechanical Properties of Timber… chemical properties, air-seasoning, kiln drying, and onwards for around 80 pages of his own research in response to set questions.

He conducted similar research on fabrics (including the source of their fibers). He understood and knew his product inside out. A good salesman, he noted, “should be thoroughly conversant with the stock.”

Conning was trained and tested on his knowledge of the store’s operations: who held what role in the management structure; which stores stocked what products (Stove polish could be found on the 3rd Floor of the Grocery Department in Lonsdale Street); Myer’s total retail floor space (28 acres), and so on. If a customer asked, he knew.

Today’s consumers report both good and bad customer service across all types of stores. But too often they describe to us retail staff who are inattentive, lacking understanding, uninformed, or simply nowhere to be found.

Conning studied the importance of merchandising, how to understand customer behaviour and how to respond to different customer cues. He knew from both personal experience and his training that customer service was an essential ingredient of retail success: “The more good service you render to customers the more often those customers are going to return. Today… competition is so keen that there is little to choose between stores except in their service to customers. We as salesmen must always be courteous, ready to help, never complain, always cheerful…”

We are never going to return to the level of training provided to Conning – costs would be prohibitive, technology has changed, we live in a different world. But his homework journals should remind us of what customer service really means, and that we shouldn’t kid ourselves that we are providing it if we’re not.

Customers tell us repeatedly that they value genuine, quality customer service; that they appreciate it when they find it; that they will pay for it; that they walk into stores with money in their pockets and walk out again when they don’t receive it. So if you have any doubts, channel a little G. Conning: know your product; know your store; know your customer. It’s old, it’s simple, and it works.  Back To Top

NOTE:This is general information only and does not constitute advice nor take into account any individual’s or company’s specific requirements, and should not be relied upon as such. Readers are advised to seek specific advice. Directional Insights makes no representation nor gives any warranty as to the accuracy of future forecasts. This information is not intended as investment advice or other advice and must not be relied upon as such. You should make your own inquiries and take independent advice tailored to your specific circumstances prior to making any investment or other decision. To the fullest extent permitted by law, any conditions, warranties or liabilities implied by law into these conditions are hereby excluded. All copyright resides with Directional Insights Pty Ltd.

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