It’s a simple fact that people spend more money when they are on their feet than when they are in a car. That’s why foot traffic is so vital to most retail centers. Of course the trick is getting people to the center and out of their cars in the first place.
That’s where something we call retail synergy comes into play.
The word synergy is derived from the Greek work synergies, which means “working together.” In business terms, synergy refers to the ability of two or more units or companies to generate greater value working together than they could working apart.
When retail synergy occurs, a collection of shops can create a consumer response that is greater than the sum of the combined response those same shops would have elicited on their own.
The reason for this is simple, most people don’t want to spend their entire day driving around the city to run their errands. They’d rather drive to one location that can meet a variety of their needs than have to make ten stops to accomplish the same task.
However, this clustering not only increases the overall traffic to a center, it also exponentially increases something I’m calling “the wandering effect”.
Have you ever run an errand to a store, but while you were leaving couldn’t resist popping in next door for your favorite smoothie? Chances are you didn’t leave your house intending to get that smoothie, you left your house to run your errand. This is the wandering effect in action.
In essence once you get a person out of their car, on their feet and provide them a diverse range of shopping opportunities in a pedestrian friendly environment, most people are going to be inclined to wander. Yes they may have driven there with the intention to visit a particular store, but along the way to a from their car they’ll most likely visit a wide range of retailers and not just the one they originally intended to.
All this means three things for retailers and developers:
- You can use clustering to your advantage to help grow your consumer base.
- When choosing a location for your store, or accepting a lease for your center as a landlord, examine if the store will compliment the existing tenant mix of the center. Will this store add something that doesn’t currently exist, will it attract a demographic the center is currently lacking, will it create energy or buzz for the center as a whole?
- Make it pedestrian friendly. You finally have people out of their cars, make your center somewhere that a person would want to wander, loiter and stay a while.
In Huntsville alone we have some great examples of this concept. Centers such as Bridge Street Town Centre have created amazing retail synergy in the middle of nowhere by curating an eclectic mix of desirable tenants and cultivating an extremely pedestrian friendly environment that offers more than just shopping. Twickenham Square is another great example of retail synergy, with it’s mix of soft goods, services, restaurants and grocery you can visit any day of the week and see this concept in full effect!