BDS Sponsorship, Sponsorship Information

Off Road Retail

Richard Busby, Chief Executive of BDS Sponsorship, speaks to Retail Week about the importance of experiential marketing in retail leisure.

Off Road Retail

Strange is the question, “how many women over 40 years old go ten-pin bowling?” may seem, it has a point. With the highest disposable income shifting to the 40-60 years olds, shopping centres have to start addressing how they will attract this market, rather than continuing to provide leisure offerings based around food and beverage, cinemas, trendy nightclubs and ten-pin bowling.

Changes in consumer behaviour mean retail outlets – whether individual shops, shopping centres, retail parks or designer outlets – are not only having to provide an increasingly enhanced level of service, but also are being challenged to provide relevant leisure entertainment for visitors. Otherwise centres will fail to achieve footfall, dwell time, spend per head and loyalty targets.

The leisure offering at retail centres must reflect the tastes and preferences of their target audience. For example, the leisure offerings for women should include permanent, but constantly refreshed retail theatre, based o their key lifestyle interests, such as fashion, interior design and food. It’s also necessary to think of the family group and provide something for the reluctant male shopper and for children.

Tasting Life

Standard events, such as fashion, shows, are not the most cost-effective option. They involve continual chasing of sponsors, extensive management time and high-set costs. Long-term experiences that are continuously refreshed offer a more effective solution.

Shoppers are increasingly demanding more interactive experiences. But, how can retail complexes cover the capital and staffing costs involved in providing entertainment at their venues? This point is as true for retailers as for shopping centres. At the same time, there is an increasing awareness among some of the world’s leading consumer brands that retail venues provide excellent marketing opportunities. But why would brands be interested in sponsoring and financing enhancements in retail locations?

For brands, traditional advertising has become more and more cluttered. Within the UK, there are now hundreds of TV channels, ITV – the channel most brands use as a mass advertising medium – has found its audience numbers falling by over 50 percent.

Brands are looking at alternative ways of reaching mass-market audiences and venues provide an increasingly attractive alternative to TV. This has happened alongside brands increasingly recognising the value of experiential marketing – connecting their brands emotionally with consumers within retail outlets – as shown by the Land Rover Experience at Bluewater. Even small shopping centres can nowadays effectively compete with local media (news and radio), and many department stores could compete with the ‘Selfridges experience’, financed by bringing sponsors on board. Complementary sponsors such as telecomms, or utility companies, for example, could help finance Marks & Spencer’s new Lifestore concept.

Retailers know experiential marketing allows them to empower a consumer to connect physically or emotionally with a product or service. The consumers are engaged and entertained and subtly sold to by providing enhanced experiences. As a result, consumers buy lifestyle associations and not products, thus encouraging them to spend more. This important shift has spread from the retail sector. Almost all major brands, not just retailers, are interested in experiential marketing. As MasterCard senior vice president of global communications and sponsorship MavaHeffler says: “It is not enough for a brand to just be seen and heard, it has to be experienced.”

Since it opened in 1999, Bluewater has become one of Europe’s leading retail and leisure destinations, with more than 27 million visitors a year. Space within Bluewater is at a premium. However, BDS Sponsorship created a strategy to maximise the income from the under-utilised areas.

BDS secured Land Rover as a key sponsor to create a 4×4 paid-for driving attraction in the cliffs surrounding the centre. As a result of this initiative, footfall has increased by 6 per cent and Bluewater has gained a significant revenue stream from Land Rover, as well as the Global International Council of Shopping Centres Award for centre productivity.

The key issue with leisure and retail theatre is to keep it fresh. People will pay for experiences if they are good. Retail theatre offers many opportunities for sponsorship, for example a children’s play area could be sponsored by a brand wishing to reach parents and children.

Experimental Experiments

New shopping centres should focus on entertainment as one of the key issues when designing a centre. How will they use the ‘open space’? What costs could be offset by bringing in sponsors? Shopping centres will be build soon to accommodate already sponsored leisure experiences.

And, sponsors will start being signed up before retailers and food and beverage, as they increasingly contribute to a shopping centre’s bottom line and begin fulfilling a role similar to anchor tenants. The integration of added value services and retail theatre is increasingly being considered by both venue owners and retails, however the problem is usually in securing and raising funding for such a project.

BDS is advising both new and existingvenueson how they can restructure financial modelling of projects so that owners can both finance the experience and indeed, make a profit for stakeholders. Moreover, in addition to sponsored leisure and retail theatre, we are also looking at how sponsors can impact on value-added services, such as relaxation/pampering zones, valet parking and improved washrooms.

Consumer behaviour has and will continue to change. Consumers increasingly want great concepts, providing great experiences in convenient places, combined with an excellent level of service. The key element is how to finance these improvements. The answers are wide ranging, but include sponsorship, paid-for attractions and advertised supplied TV programming.