BDS Sponsorship, Sponsorship Information

Sponsor-ability

Pat Morgan of Shopping Centre magazine has a one to one with Richard Busby.

There were a few gasps in the audience at April’s ICSC Europe annual conference in Budapest when Ian Watt, managing director of Old Mutual Properties, revealed he had challenged staff in his South African shopping centres to produce 50 per cent of their revenue from non-rental income.

One man listening intently -agreeing with Watt, and hoping delegates were taking the idea on board – was Richard Busby, Chief Executive of BDS Sponsorship.

“I think 50 per cent is a bit high, but the principle that a large chunk of income and profit for shopping centres should come from non-rental services- of which sponsorship is one of a number of potential areas -is sound,” he says.

This is a man who has come to know the shopping-centre industry intimately through his company’s work with a growing number of owners, and who produced the deal whereby Bluewater boasts the ground-breaking (in more ways than one) Land Rover off-road experience.

The Kent megacentre offers four wheel drive trips over a challenging course around the chalk cliffs. It’s sponsored by Land Rover, which achieves a lot of test drives, and it’s paid for by willing passengers. “But it’s not just about making money,” says Busby. “It’s also about enhancing the shopper experience and providing a male crèche. And it’s increased footfall,” he adds with a smile. “It’s an iconic example of what we want to try to achieve.”

BDS’ impressive shopping-centre/retail-park client includes Lend Lease, McArthurGlen, Chelsfield, Pillar, the Pru and others. There’s also work going on, as you will gather from the photo on these pages, at London’s Battersea Power Station, long neglected but now the subject of ambitious plans to turn it into a leisure/retail destination.

“What we’re being asked to do there is to say whether the design could be improved to maximise the income, both in terms of simple things like making a corridor six inches wider so more advertising could be sold and in asking if the current design would attract, say, automotive sponsors.”

Potential sponsors are out there for all manner of activity in shopping centres, says Busby. But what’s in it for them? Brands looking to indulge in experiential marketing need venues in which to do it, and shopping centres are obvious venues. What’s more, it seems that, in the case of an owner with a substantial portfolio of centres, it is attracting a collective audience not far short of that achieved by ITV – and advertising through that medium is much more expensive than exposing your brand through shopping-centre sponsorship activity.

Sponsor-ability

“This is fundamentally occurring because of the advent of digital TV,” he goes on.

“You now have hundreds of digital TV stations in the UK, ITV’s audience will plummet further and the right combination of shopping centres will be able to reach significantly more people than the approach of mass-market media as it has been in the past.”

Good news for the owners of groups of sizeable centres with attractive footfalls, then. But what about the smaller owners or less glamorous centres?

Can they get a slice of the sponsorship cake? Busby quotes the example of work BDS has been doing with a company with a range of centres of all sizes. It thought it was making a good return from non-rental activities, he says, but income from those areas has increased by 2,000 per cent within four months.

Benefits will come, of course, from working collectively across a group of centres, but there might also be opportunities for smaller schemes. “If large players collectively can compete with ITV,” says Busby, “I believe the small players can compete with regional newspapers. If you could get the right group of centres to work together, you would have a very effective medium that would compete very strongly with, say the Yorkshire Post or The Scotsman.

So you might have the audience to compete with other media, but are you providing those people with the things they want? How relevant is, for example, a tenpin bowling offer as society changes and 40- to 60- year-olds become more important to shopping centres, asks Busby. And what about your non-prime markets: men and children? There are sponsorship opportunities in catering for these consumers and their demands.

“All the research shows quite categorically that shoppers want two things: a point of difference between malls and an enhanced level of service. “Sponsorship, in places, can help to make toilets look better or deal with some of the issues of transport. They’re not panaceas but until now people have said: ‘we can’t solve this, we haven’t got the money’. “I’ll simply ask: ‘Can we solve some issues by her income streams -sponsorship, for example?”

Why not consider – like Bluewater’s Land Rover -a paid-for attraction? Apart from anything else, it’s perceived as better value.” Shopping-centre owners should be thinking about the opportunities sponsorship can present as they start to plan for a new development, or a refurb.

Busby believes that, until now, there has been little thought given to the question of how to offer a better brand with a point of difference, and equally, to financial modelling outside the core of rental.There are significant new income streams waiting to be tapped, and it’s possible to reduce costs and cut loss-making activities and management time.

“Casual leasing makes relatively small sums of money and takes up enormous amounts of management time. Because they’re temporary road shows, they tend not to be terribly good – the good ones are fresh and they’re retail theatre, but they’re 20 per cent of what you actually get.

“We need to move beyond having local car dealers or even double-glazing companies, because of some of the quality of what they do- and the way they antagonise shoppers. At the end of the day, the core thing is to keep the shoppers happy, so they’ll come back and spend money in the shops.”

It’s still early days in exploiting non-rental income streams, says Busby, and there’s still a lack of acknowledgement in some quarters that they even exist. The industry has barely scratched the surface of sponsorship possibilities, and there are brave new worlds out there waiting to be discovered.
“1 think there are all sorts of things that I don’t know about that will come along in a few years’ time,” muses Busby, and he embarks on a little of what is known nowadays as ‘blue sky thinking’.

“Here’s an interesting issue. If you could increase your non-rental income significantly, how would that change the way you want to deal with retailers? You might decide that you’d be willing to do better deals with certain retailers because they’d pull in the audiences that might enable you to make 10 times as much money from sponsorship.

“I think that may well happen for some very sophisticated people in a few years’ time, because there are difficult-to-reach markets out there that advertisers will spend a lot of money to reach -more money, potentially, than would be obtainable from maximising the rental value. ”
Ooh-er. While some of the less progressive owners try to get their heads round that one, let’s move onto another Busby pensée.

There are too many shopping centres that are the same, he reasons. There is a need for some alternative offerings to create a point of difference. Sponsors might create a new type of anchor.

“If you wanted an up-market mall, it would make sense if you could link with an appropriate car company. It would make a big statement to the fashion retailers if you were to link with, say, BMW. “An experience BMW created as a lynchpin, with a ‘wow’ factor, would pull consumers in. All costs would be covered by the sponsors. And having BMW on board would pull in a lot of the retailers.”

Fascinating food for thought. Let’s see who’s the first to take up this challenge.