Managing Operating Hours
Even the simplest decisions are better with data.
Most retailers take operating hours for granted. In a mall, your hours are effectively set for you. If you’re a destination store you have a little more flexibility, but there’s a small range of options that make any kind of sense. With live events, though, decisions about operating hours can be more fraught. It’s the usual story – a lot more variability and a lot less experience to draw on.
Operating hour decisions on merch and F&B impact an event in at least four ways. They impact cost since the longer your open times, the more labor cost you have. Obviously, the flip side of that is that the longer you’re open, the more revenue you’ll take in. This trade-off between cost/revenue is the obvious way to think about operating-time decisions and it’s probably the most important. But while cost and revenue may drive the decision, it’s important to at least consider the impact on two aspects of customer experience.
From a customer perspective, longer operating hours are nearly always a positive benefit. Customers don’t care if a merch store or concession is paying staff when nobody is buying, but they definitely do care if they can’t get what they want when they want it. There’s also a secondary impact on crowding and experience by having more options open and available.
It’s common at live events to have small satellite merch operations. These smaller operations are almost certainly revenue enhancing – putting more eyes on merch. But one of their main benefits is to reduce congestion at the main merch store by making the most common purchases widely available. If you just want a cap or a basic Tee, a satellite merch store is probably a better and faster experience for the buyer. By reducing crowding, it also makes the main store experience better for shoppers looking for something more.
All four of those factors come into play when you decide on operating hours – because you can tweak the hours for each component separately and there may even be interrelationships between factors (the longer people are getting F&B, the wider the window for merch shopping).
One aspect of satellite operating hours that’s worth keeping in mind is that satellite locations usually provide more flexibility in scheduling. Labor hours are usually pre-committed, meaning that on the fly adjustments are of limited use. But with secondary locations, you have a choice between staffing them or pulling that staff into the main locations. That alleviates a common drawback to event analytics - organizers don’t always have the ability to change things during the event. There’s always next time, of course, but being able to make adjustments during the event adds a lot of value.
When it comes to the data you need to make better in-event operating decisions, there are two flavors. The first is point-of-sale data. Nothing is better than PoS data for capturing the value of being open. PoS data provides revenue and, by capturing the number of transactions, it captures how many shoppers you’re shifting from the main to satellite locations. PoS data captures the value of being open. Your staffing data will capture the cost of being open. All well and good. But what about the revenue opportunity from being closed? You can’t measure that with PoS – that’s where crowd analytics comes in.
Optimizing operating hours starts with understanding broad site occupancy. Usually, that means real-time tracking of ticket scans, but it can also mean people measurement in public areas and even in parking lots. There are times when an event or venue might benefit from an earlier gate open time. There are also cases where merch and F&B are outside of ticket scan areas. Regardless of the method (ticket scans or crowd measurement), understanding arrival times pre-event is essential – especially since that time is precious. It’s the one time when event visitors have NOTHING ELSE to do – not even get to their cars or trains and go home.
In our airport work, we’ve learned the importance to landside operations of maximizing this time. Sure, airports want to lessen queue times to improve passenger experience, but they also want to maximize landside free time. The more time passengers have between security and boarding, the more likely they are to shop or eat. And the more likely they are to shop or eat, the more valuable that landside real-estate is to airport operations.
It’s the same at a live event. As an operator, giving fans a better experience by reducing wait times at entrance is good for customer experience and good for business. It’s one of those rare win-win situations in analytics. Give people more time to do things they enjoy, and they’ll probably spend more money while doing it.
Understanding entrance times (and time it takes to enter) is just the first step. Next, you’ll want to zoom into the actual locations in play. Just because you’ve got 5,000 people on site doesn’t mean any of them are near a particular satellite location. You can use crowd analytics to track the flow opportunity at any location. How crowded is the area around it? How many people are passing by per minute? Even how fast those people are going.
Largely stationery crowds in an area are particularly attractive targets for retail and F&B, because these are people with no particular place to go. That being said, you’ll also want to measure the flow rate of pass-by traffic. It’s the job of the merch and F&B offerings to peel off some share of that – a share you can measure in terms of both engagement (eyeballs and dwell) and, of course, conversion. For traffic moving past, we also measure the velocity of traffic including the percentage of fans moving in different speed categories. Velocity is a pretty decent proxy for potential engagement. When someone’s in a hurry to get to their seat/venue, the chance of them stopping for food or merch declines precipitously. If you focus your engagement rates on low & medium velocity movers, you’ll have a better measure of success – that’s especially true since different areas of an arena or event will often have quite different flow characteristics.
At the same time, if you're tracking pass-by and usage at every location, you can make a more informed decision about what needs to be open to alleviate crowding. If your main merch store isn't too crowded, you're often better off having potential shoppers go there since average basket size is almost always higher in the main store even for comparable shoppers.
Some of the biggest and easiest ROI’s we’ve seen from crowd management at live events come from simply observing significant crowds and traffic around retail locations that were closed. Not only is there often an immediate resolution strategy (not something that has to wait until next year), the revenue gains can dramatically outpace the cost.