Make the most out of shopping centres VIP events
Over the past few years, shopping centres have used VIP events to boost foot traffic and sales conversion. But unfortunately, not all retailers benefit from it. A recent study was made to answer this question: are shopping centre VIP events letting retailers down?
The rise of online shopping has affected shopping centres. Because of this, there has been a steady decline in shoppers’ numbers. Due to this competitive market, several strategies have been implemented to increase foot traffic and sales conversion. One prominent approach is to have VIP events. But does it deliver its purpose and is it an effective strategy? Let’s find out.
VIP Event VS Normal Day
A comparison between a standard trading day and VIP event was made to see the effectivity of VIP events. As expected, VIP events attract additional foot traffic in shopping centres. In the figures below (Figure1.1 and Figure 1.2), you can see that the average event lifts foot traffic by 1.5 times and sales by 1.6 times more than a standard trading day.
It has also been observed that the foot traffic generated by VIP events vary across different locations in the same shopping centre. In a recent VIP event at a shopping centre, the outside traffic lift of 10 stores located throughout the centre was tracked, and the result was striking. These stores experienced different levels of traffic lift between 1.3 times and 5.6 times (Figure 1.3).
According to the data gathered, there are different levels of traffic across the various locations in the centre. Some retailers benefited greatly, while others are less so affected.
The question we have right now, is why are other stores greatly affected and the others not? To answer this question, retailers were classified into three different categories based on sales increase; the Laggards, Average and Outperformers. The Outperformers can achieve up to five times more than their usual sales total (Figure 1.4). Those who have performed at this level during the VIP event can experience an incremental sales contribution of +2.2% of all annual sales.
Before and After VIP Event
To better understand the effectivity of VIP events, a comparison of foot traffic and sales performance was made seven days before and seven days after the VIP event. This comparison has shown an overall lift in foot traffic and sales performance in the seven days before and following the event (Figure 1.5 – Traffic and Figure 1.6 – Sales).
With this data gathered, staging VIP events not only have an impact on foot traffic and sales on the day itself, but the benefit also extends to surrounding days as well. VIP events can make a contribution of an additional 0.4% in annual foot traffic.
We already know that VIP events can attract foot traffic and sales but not all retailer benefit from this event. Here are a few tips on how to make the most out of shopping centre VIP events.
How to be a VIP Events Outperformer
Invest in shopfront visual merchandising
Since the event has already attracted foot traffic in shopping centres, it’s up to retailers to lure them in their stores. The easiest way to do that is to have a promising shopfront visual merchandising. If customers like what they see outside a store, they will be more likely to enter shops and therefore would increase sales and foot traffic.
Outperformers also maintain high shopfront conversion throughout the day and therefore experience a disproportionately larger share of foot traffic into the store. Also, the average shopfront conversion rate increases steadily during the day and hits the peak just before closing indicating late traffic want to buy (Figure 1.7)
Invest in your sales personnel
Once you’ve increased foot traffic in your stores, the next thing you need to do is to convert them to a sale. But how exactly you can do that? Through your employees. Make sure that during the VIP event, you’ve chosen your best sales staff to man the store. The right sales personnel will help you convert foot traffic to sales.
In the figure shown below (Figure 1.8a), shopping centres are uniformly busy throughout the VIP event. You can take advantage of this time by ensuring your roster of employees is the ones who are eager to convert traffic to a sale. Average conversion sales peak during lunch time and extended hours (Figure 1.8b), so be sure to take advantage of these hours of the day.
Exclusives discounts and promotions
Now you have foot traffic and roster who can help you make that sale, but what more can help you attract customers than the good old discounts and promotions. One great idea for an exclusive discount is aggressive bundling. This strategy compels your customer to buy more items per sale during the event.
During VIP events, retailers usually offer discounts, but what differs outperformers from average retailers is by offering massive discounts. An average retailer who tends to provide discounts drops their Average Transaction Value (ATV) by 10% (Figure 1.9). However, outperformers that offer more significant discounts can achieve a lift of 35% for ATV.
If you’re looking for tips on how to maximise your sale even if it’s not a shopping centre VIP event, you can read this article on redefining the in-store experience.
In conclusion, shopping centre VIP events don’t let retailers down. It increases foot traffic without any significant impact on traffic on prior and post periods. Use the three simple tips we provided on your next shopping centre VIP events and be an outperformer that will make the most out of shopping centre VIP events!
This study was first published on the Kepler analytics website on 6 July 2017.