MRI Springboard Footfall Insights September 2023

Diane Wehrle Marketing & Insights Director at MRI-Springboard joins Simon for their monthly chat about footfall trends and shopping behaviours. They cover:

• Footfall trends from July to August 2023
• The divergence of value and volume 
•  The importance of upselling and converting customers when footfall is flat

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Transcript

Speaker 1: 0:06

Welcome to the Productivity Podcast. I am again joined by Dayan Whirlmarketing Insights director, mri Springboard, and we are going to look at football from July to August. Hi, dayan.

Speaker 2: 0:18

Hi Simon.

Speaker 1: 0:19

How you doing.

Speaker 2: 0:20

I'm good, how are?

Speaker 1: 0:21

you Good, just recovered from the forum, or Productivity Forum, last week which you opened for us, so it was great to have you there again. Another good session and some brilliant feedback.

Speaker 2: 0:31

Yeah, no, it was a great day, really good, great network opportunities for us. So not talking about myself, but the papers and the presentations were great, really inspiring.

Speaker 1: 0:41

Good, good, and we're just in there in the throes of getting dates sorted. So we'll announce that soon and people can start signing up. So let's turn our attention back to football. We've talked over the months this year around the kind of different trends. I think last month was a record breaking month, probably for all the wrong reasons. So how have we fared from July into the end of August?

Speaker 2: 1:07

Well, good news is August was slightly more positive, which is great. We returned to positive territory in terms of a month-a-month increase in football, but it was actually only very marginal. It was point two percent up, which doesn't offset a point three percent drop from June to July, which is a real shame. So at top level, you know it's clear that the economic conditions are starting to tell on foot. For point two percent up on month, you know it's not great. It meant that the annual increase from 2022 in August was the lowest. It's been just 1.9 percent higher than August 2022 and whilst some of that is a natural sort of tailing off of the exponential rises that we've been having since Covid, it's also a reflection of the pressures that people are feeling in terms of household budgets.

Speaker 1: 1:58

So that's an area we talked about on a number of occasions, actually really starting to shine through now, unfortunately, in terms of I suppose we're out of peak holiday season so we've paid for our holidays or we've used the credit we had from lockdown. We're now in that run clear clocks, change kids back at school. We start to see Christmas in supermarkets. I've seen some this week. I think it was Marzi Pan and Mint Spies Cracky.

Speaker 2: 2:25

The skipped Halloween then.

Speaker 1: 2:26

Yeah, yeah, well, that'll come and go in a flash. And there's all the stuff you know on social media about 18 week at 18, fridays to Christmas and a hundred days and all that stuff. So it we've turned that corner into the, the darker nights and that means we'll start to put the heating on and the fires on because the temperature is going to drop and that's all kind of. I suppose those energy pricing have all been forgotten for a while while we've been bathing in the sun. So there's, there's those cost pressures. At the time we're recording, I think this week we're expecting interest rates to go up again, strangely, as inflation has come down. So we're heading into that, aren't we? Plus, like you say, there's Halloween, there's bonfire night, which which I think Halloween, probably a bigger event now than before, and bonfire night getting caught up in the whole animal welfare thing. So maybe diminishing. But and then you into the big event, are you? Then you then you're at Christmas and Black Friday and Cyber Monday, weeks in between.

Speaker 2: 3:27

Absolutely. I mean, I know, but we're getting into the Christmas period because I've and I presented this last week, didn't I? I'm the first telling of the like forecast for quarter four for Christmas in terms of footfall. So I definitely know that Christmas is on the horizon, but most definitely, you know, let's all talk about what's it going to deliver for Christmas and it's going to be a challenge. It really is.

Speaker 2: 3:51

I mean, we're very habitual as consumers. We don't change our habits very much. We do what we do every year. We've been tracking footfall at MRS springboard since 20 or 2002 actually, but publishing data since 2009 and over that period we can see a very, very clear pattern of upwards and downwards shifts across the year and it doesn't really change much. So when we forecast, what I do is, of course, look at what's happened in previous years and then take a judgment what I think is going to happen this year in terms of those monthly changes, and of course, that flows through into an annual change and a change from 2019.

Speaker 2: 4:28

So I won't still own Thunder, but needless to say it, I haven't been forecasting huge uplifts, but certainly in terms of August, that's Really the end of the summer, as you said, and it's the beginning of autumn and the run-up to Christmas and we're definitely seeing this reigning back, this caution. We're seeing it every August. Anyway people are more cautious in August than they were in the height of the summer, in July, but definitely we're seeing it and you know inflation has a big part to play in that. The O&S talk about this divergence between value and volume. You know values are going up of course they are, because inflation is sitting at 6.8% but people are buying fewer items because they can't afford as much and they're trading down as well. So volumes are lower and values are higher. So if you just look at values, you're going to get a very distorted view of retail sales and people go. All retail sales are holding up only because of inflation.

Speaker 1: 5:27

Yeah, and that's really interesting point. I know we touched on it last week briefly again at the forum. But in a retail, whatever world you work in, if the cost of goods is going up but your actual three puts going down, you therefore need less labor to do it because, from a pure workload point of view, you're handling less items, putting less items out, making less meals in restaurants, pulling less pints of beer in a pub, receiving less goods in a warehouse, so that I think people are starting to move away from that top line sales number as the kind of mechanism, because if you just look at that you pat yourself on the back. But actually, as you say, if you start to look at that divergence of value and volume, you can see that everything else is in decline.

Speaker 2: 6:15

Absolutely, and I think there's two sides of it. There's that fulfillment element, which is absolutely right. You know you need less people to fulfill less, but at the same time, because you're putting more eggs into a smaller basket, people are buying less. So every customer is more valuable to the retailer because you need to make sure that that sale value of every customer who walks through the door is as high as it possibly can be. So, therefore, what the focus needs to be is on shop floor staff, making sure they're doing their best job they can possibly can in converting more sales. So, you know, upselling where they can, converting more where they can, making that whole customer journey install more appealing, encouraging people to spend more time in store and therefore they're likely to buy more. So, and really improve the sale value of every customer in the store itself, because clearly, that they're going to need to do that.

Speaker 1: 7:13

And if you don't get it right I suppose you kind of end up, unfortunately, in the world of where Wilco ended over the last couple of weeks. So you know our thoughts go out to all the colleagues there. Clearly Poundland B&M have come in and hopefully taken the colleagues with some of the property I think the range we've said before have purchased the brand online brand rights. So tough time for those colleagues and everybody in their office in the kind of senior team. But any thoughts on how we got to where it got to?

Speaker 2: 7:48

Yes, I mean it's as you say. It's really sad for all those people who work so hard at Wilco to make it a successful retail operation and in many ways the demise of the business isn't a reflection on their efforts and their success. I mean a lot of the issues that Wilcos were dealing with were back office infrastructure cost issues. I mean certainly that's what put pay to the HMV offer for Wilcos. The infrastructure costs were just too high. They clearly overextended. There became a much bigger business than perhaps they should have been.

Speaker 2: 8:26

The store locations they bought quite a few stores which, as we know, had work for what was, and also a very large, often to two floors in town centers which are more highly rented, the retail parks and Simply the salesman to cover the cost of those stores.

Speaker 2: 8:46

And when you have four hundred stores and quite a few of those are very highly rented to large is it's gonna cause issues in association with all the other issues that they had very highly. So all of these things come together in the perfect stores. It's never one thing. And of course, the competition if they're leaner and meaner and better doing what they're doing and their costs are lower than they can survive. So it's really sad. I mean they do say clocks to clocks in three generations, but you hope it's not true and it's always sad when you lose a strong brand from the high street. But you know, I had a quick look last week at all the brands that I remember back from the seventies and eighties and I'm really I'm really share my age that just don't exist anymore. I mean, do you remember Athena?

Speaker 2: 9:30

I mean Just yes, I love Athena. You know, that's when we have posters on our walls and not that sock shop went, you know, and so it's not that size of store, because soft shop rent tiny stores, you know. So you know if the list continues and they all had that individual problems. But I think what it's saying is that you know the the re, the bricks and mortar retail industry, and even just the retail industry, is an ever evolving industry, as all industries are. But I think, because it's largely structured around a built environment, those shifts tend to be a bit slower than they are in the digital world. So you get movers in and out and that takes longer. So it needs to be a much more of a dire situation for a retail operation bricks and mortar retail operation to shut its doors, then perhaps a digital operation and it's more visible. So, yes, really sad, but we are a them or I swim board.

Speaker 2: 10:24

We've seen Online retailers look up stores. I mean, we know Amazon, we know you know best, you know most probably most widely regarded, you know example. But there's Gymshark, of course. They've bought a flagship store in Regent Street and they're an online operation. But there's also smaller retailers that we've been working with at MRI Spinboard who have started online and are moving into stores. So it's happening and the vacancy rate is dropping. So that shows businesses are opening. So it's always there's always a light at the end of the tunnel.

Speaker 1: 10:56

Yeah, and I think in any industry, even in life, kind of the strongest survive, don't they? But I suppose what it does mean is somebody unfortunately now takes the mantle of Will Cozen will be in the relegations zone, I suppose, if you like and it's a football in retail and unneed to up their game. And again, as we talked about last week, I think if you're in one of those businesses that's constantly changing, that's probably difficult but actually reassuring that the business is evolving. If you're in one of those businesses where you're kind of standing still, I think that's where the warning signs and things start to creep in, because we've seen what happened to Will Cozen's House of Fraser in its day, Debenhams, all of those other ones that we talked about Athena, my time, Focus, the IY I want to work there, do it all.

Speaker 1: 11:45

Fads, Fads. Get your wallpaper, yes, Get your wallpaper. But then some of them come back, don't they? So yeah, Mike actually has done a good job with Fraser's House of Fraser. They've opened a Wimpy, ironically, in Shrewsbury High Street that seems to be busy. So there is a bit of a 360 as well, where some of these brands come back. So I suppose you never know. But the point I wanted to stress was everybody that's in successful business is in constant change, because that's how you survive.

Speaker 2: 12:18

Absolutely it is.

Speaker 2: 12:19

And I suppose because I've because working at MRI Springboard and I found in that business and knowing that it's all about measurement and measurements change and seeing the data flow through every day in terms of footfall and sales, and I see it move from day to day that's naturally where I have sympathy with that and it's just part of my DNA.

Speaker 2: 12:42

So I see that I think for retailers although retailers work on short timelines, it's easy to forget that actually things are changing for day to day and it's those little incremental changes that make a big difference sometimes, and understanding the basics is absolutely critical. So how many customers are your stores attracting through the doors? What's the norm, what's good look like, what's bad, look like what's consistently good and consistently bad, and then, same with conversion, how many of those are actually buying anything and what are they buying? And also how that is at store performing in relation to where it's located. That's really important because you could think that the store is doing okay, but actually it could be doing so much better. So understanding just those three key metrics would mean that everyone has a handle on exactly where the issues are within the retail business and what come and what it therefore can be fixed and in what timeline. And you know, knowing what can be fixed and what can't be fixed, really, really important and then you get an idea of you know what's achievable.

Speaker 1: 13:47

Yeah, absolutely. A couple of other retailers for you that blast from the past, texas.

Speaker 2: 13:53

Oh, yes, and tandy, do you ever tandy?

Speaker 1: 13:55

blockbusters mbc. Yeah, comet. Yeah courts furnishes there's, there's, yeah, there's more than you think when you say my eye oh yes, yep, but then think of all the people that are in there. So I think our mfi Is now a range. I think our local bhs was a willco's, ironically. Um, so those units have evolved and and moved on, which is uh, which is always good.

Speaker 2: 14:21

Yeah, what's really interesting actually is what we've seen, what we're seeing and we haven't seen it fully yet and, and you know we've seen a lot of debonem stores remain vacant because that's they're quite an issue about redeveloping Big department stores because there's a lot of space that doesn't have any windows, so people to all make it into flats, you know, but actually if you did that, half the flats wouldn't have windows, so you can't. That's not very achievable very easily. But stores like Woolworth's and willco in in high streets are probably more able to be converted into flats because they have more Open natural light coming into them. And what we've seen in the past is that you know the top floor will go to resi or to office or to works, you know Co-working space. The bottom will get we split up into smaller stores. So whilst they're bigger than they used to be, they're still smaller than they are currently.

Speaker 2: 15:09

And that offers new retailers an opportunity to come in. Because over the years the conversations I've had with town centres and with business improvement districts has always been about my town stagnating because I cannot, I don't have any space to have any more retailers in, there was no one moving out and I don't have any flex. So the new retailers who want to come in, I can't, I can't accommodate them. So hopefully what we'll see over the next few years is some new retailers Springing up and developing and they're all. And you know what the internet has done is. It's been brilliant, it's been given that learning ground for all those retailers who to test their propositions and see whether they're a goer, and then they they realize I'm.

Speaker 1: 15:50

Something we've I've always known is that bricks and mortar is really important and people like going into store, and then they move over into store as well, so they get that omnichannel offer and one of the things you talked about In the kind of previously was around kind of knowing your business, knowing your data that fought for when people are in, and we talked on a previous episode around the kind of rise of Saturdays again the importance of making sure we've got the right colleagues in on those Saturdays. I remember again in my time running shops we probably weren't our best on Saturdays because in Sundays we had probably a younger workforce there students, part-timers and our Core team, our full-time's, our experience works. One worked Monday to Friday, so I know that shifts happened, but again, as we're working in a more hybrid world, saturdays and Sundays seem to be coming a lot more, the discreitional shopping days where we've got time and we want to go out and have a wonder.

Speaker 2: 16:46

Absolutely. I mean, saturday was always the peak trading day anyway, but the data is showing that that has increased in importance proportionately throughout the week, even more now, and that we're only seeing a small increase. But it's starting and that's as you say. Simon, you know we work in a hybrid fashion. I'm sitting at home at the moment. You know, the day that I have to go out to shop really Is Saturday.

Speaker 2: 17:07

I'm not in my town centre anymore during the working week where I used to be able to pop out at lunchtime and go shopping. I don't do that anymore. So Saturday is my day, and sometimes Sunday too. So, yes, you need Experienced sales people on those days because actually if I'm out on a leisure trip and I've got a bit more time to spend, I'm more likely to spend more money if someone's pretty persuasive and sells to me and helps me and supports me in my trip. So it has to be about resourcing it right and understanding your business, because for some businesses, saturdays, whilst may be busy, may be more functional. So In every business is different. But understanding where the benchmark, the national benchmark, is, really helps because it gives you that Laser view to be able to focus and say well, actually what is our Saturday doing. You know, what should we do on that? Should we change anything at all or just leave as is and start to test things as well as you go through?

Speaker 1: 18:03

Brilliant. So Lots of positivity, lots things to look at, some good tips there around again, reviewing Saturday's experience Making sure we're upselling to people when they're in the shop or at least trying to convert when football is relatively Flat or stagnant, with the kind of minimal gains and decreases. So, um, yeah, let's see what pans out in the next few months with weather, economics, black Friday, cyber Monday and then I suppose, ultimately for lots of retailers, it all comes, comes together at Christmas.

Speaker 2: 18:35

Absolutely. I mean, we'll be keeping a very close eye on this year, as we have in all the other years, but we're in a more normal economics cycle now, albeit not very pleasant one, because of course there's always something that's thrown at us. But yes, let's just keep it close on and we look forward to talking again.

Speaker 1: 18:54

Brilliant. Thanks, dye, we'll catch you soon.

Speaker 2: 18:56

Thanks, Simon.