Shopping centre marketing is an investment, not an unnecessary expense

The awards will be presented at the 8th Annual African Congress of Shopping Centres taking place at the Cape Town Convention Centre from 12-14 October and should stimulate a competitive spirit and challenge to the marketing professionals in the industry.

George Skinner, Executive Director of the South African Council of Shopping Centres, acknowledges that in a maturing shopping centre industry fierce competition is beginning to emerge between major centres, especially in the Cape Peninsula, Northern Durban, Eastern Pretoria and Greater Northern Johannesburg.

Skinner says "There are four major issues emerging for our industry. Firstly, due to the oversupply of retail space in the abovementioned markets, shopping centres are facing real competition for the first time, and the primary trading areas of the Regional Centres are beginning to overlap, which requires a more dynamic approach to marketing."

"The second concern," continues Skinner, "is traditionally marketing budgets have been dictated by owners and managers and not mutually built by the Shopping Centre team of management and retailers, resulting in general apathy from anchor, national, and small retailers alike. Marketing has been seen as a necessary evil, only aimed at counterbalancing the marketing efforts of their nearest competitor as opposed to growing the shopping centre business and its market penetration. Bearing in mind that shopping centres are multi-million to billion Rand businesses, budgets of 3-5% of gross rental income for marketing is hopelessly out of line with comparably sized businesses in other sectors of the economy, as this only represents some 0,5% to 1% of centre sales.

The challenge is to create a new mindset between centre managements and their retailers towards marketing that increases the viability of all of their businesses.

"The third factor is that a sense of partnership is non-existent in the centres. Relationships are strained as the owners, managers and retailers seem to work against each other, with opposing agendas. Shopping centres that have successfully withstood the test of time such as the V&A Waterfront, Cavendish Square, Constantia Village, Sandton City and Hyde Park Corner, have successful Merchant's Associations with a strong sense of this partnership ethos," says Skinner.

Skinner continues, "The last concern is that customers are becoming more discerning. Whilst they may still be dependent on some shopping centres for their basic needs, the real challenge for the shopping centre industry is meeting customer wants and emotional desires when shopping. Success in meeting or exceeding these requirements, will result in an affinity with and loyalty to the centre."

Andrew Barnes from the research group, De Facto, is considered a pioneer in researching this area and has implemented excellent pilot work on Affinity Shopping. His results clearly show that shoppers fit into two categories: Dependency on or Identification with a centre.

'Dependant shoppers' when making the shopping trip decision, are forced to use a shopping centre that satisfies their basic needs; whilst the shopper that identifies with a centre, chooses it to satisfy these emotional wants.

Marketing budgets in shopping centres have shrunk over the last decade as owners and asset managers strive to sweat these assets rather than grow them as business enterprises.

"Marketers have had to rely more and more on sponsorship revenue to generate marketing funds within the centres. The need for an integrated partnership in marketing a shopping centre is becoming more and more self-evident" says Skinner.

Andrew Barnes will be making a breakfast presentation at the Crowne Plaza in Johannesburg on 7 August at 7h30. The breakfast will discuss Affinity Shopping in detail. To book please contact Janine on (011) 807-6995.