Shopping Centres: Using the Center Navigator for Successful Positioning

Competitive pressure in the German retail business is rising. These days, if a retail property is to prosper it needs to be more than a simple store or an agglomeration of stores sharing building. Decisive for success is above all the way you position a retail property, be it through the tenant mix, the service quality, its visual appearance, or its recreation value. To facilitate the process, IPH Retail Property developed the Center Navigator.

Competitive pressure in the German retail business is rising. These days, if a retail property is to prosper it needs to be more than a simple store or a agglomeration of stores sharing building. Decisive for success is above all the way you position a retail property, be it through the tenant mix, the service quality, its visual appearance, or its recreation value. To facilitate the process, IPH Retail Property developed the Center Navigator.

Not just products but the various property types, too, are subject to rising competitive pressure. Take the example of shopping centres: There are now 460 large-scale shopping centres in Germany – and the competition is just as sizeable. Since 1995 alone, the number of shopping centres in Germany has increased by almost 150 percent, and this in a market environment showing no real growth. Any profit increase in this situation is accomplished through elimination of competition, meaning at the expense of other retailers and other malls, too. Predictably, you will find ageing assets, often no longer on top of the times, at the losing end. There is a tremendous need for revitalisation: According to our estimate, four out of ten centres should be overhauled. The situation is also critical for properties that do not stand out from the rest, and fail set themselves apart from the competition, due to their generic character. In order to ensure the long-term viability of such centres, but also in order to place new retail properties successfully on the market, they need to be optimally positioned. After all: A clear orientation is indispensable for long-term corporate success. Unless a mall manages to set itself apart from the competition in a clear and unmistakeable way it runs the obvious risk of seeming generic.

So in order to successfully (re-) position a centre, IPH Retail Consultancy developed the Center Navigator. The tool permits a detailed strategy process that moves from the actual to the target situation, and supports a centre management’s efforts to develop a unique positioning for its centre. In this effort, initial stocktaking is of the essence. This step involves a detailed study of the property's appearance, its location, sector diversification, tenant quality, service spectrum, market communication and price level. All of these being points that a centre management also needs to address in its day-to-day business. But a centre manager rarely has an opportunity to consider all aspects simultaneously in order to identify the perks and shortcomings of the own centre. This is where a software solution that maps the entire analytic and positioning process can help as it creates an overview of the vast data volumes and complex contexts involved. After all, the analysis should by no means limit itself to the manager's own shopping centre. Rather, it should expand its in-depth analysis and assessment to include potential competitors. There is actually no better way to obtain an objective appraisal of the own strengths vis-à-vis those of the competition. Another important point is opinion polling among shoppers and non-shoppers. Dedicated image analyses of the centre among the residents of its catchment area should be conducted to determine the familiarity and popularity of the centre. The findings of the various analyses are distilled into an “actual” profile of the centre, which is evaluated according to objective criteria in the next step.

Positioning Goes beyond Marketing

Taking a systematic look at the centre's target groups, benefits, price level, and value statement is instrumental for sorting out just what the centre represents. What is the “story” the centre is supposed to have? Should the focus be on an extensive product range characterised by its large selection? Is it supposed to make shopping particularly convenient through short distances? Are shoppers supposed to have a special shopping experience at the centre? Or is the idea to gather bargain retailers in a single location? Competitive market analysis, customer surveys and market area delineations provide a sound foundation for a decision regarding the strategy that is likely to deliver the greatest possible value added. At the end of the analysis, these core elements will enter into the value statement and thus help to position the centre with promises such as the “largest shopping centre in Europe,” “shopping in style and looking great” or “the bargain shopping destination near you.” This goes to show: Positioning a shopping centre involves so much more than marketing. By delivering a clear definition of a “target” profile that relates to the existing “actual” profile in all relevant aspects, the positioning effort provides a clear picture of tenant structure, sector diversification, services spectrum and even of the decoration and the specific architectonic appearance of the centre.

Your contact:

Herr Joachim Stumpf

Tel: +49 89 55118-143

E-Mail: stumpf@bbe.de