Shopping Centres: Re-opening after lockdown | The Sierra Balmain Polish Experience (part 5 - Marketing)

19th May 2020

With yesterday marking two full weeks since the lifting of the ban on trading from retail stores in Poland, we have seen footfall at our centres on a steady increase week on week.

Anecdotaly, retail sales are hovering between 40%-60% of last year's.

At the end of the first week we observed that shoppers across our centres were slightly less likely - as a % compared to the same weekday as May 2019 - to visit on days that would have been busier in the era BC, namely Friday and Saturday (trading on Sundays has been banned in Poland for some time now.) The second week’s figures, however, have shown that the Friday ratio was more or less the same as the other weekdays ie. around 70-73%. Saturday, though the highest absolute number of any day of the week, was still the lowest ratio day but had improved significantly when compared to the previous Saturday showing an improvement from 53% to 62% vs last year. Anecdotaly, retail sales are hovering between 40%-60% of last year's.

Shopping is being sustained quite evenly thus far across the week, and week on week we have seen our stabilised centres' footfall increase from an average of 64% week one to 69% in week two. The best results of 83% (in 2 centres) and the lowest being 61% when compared to the same week in May 2019. Interestingly the lowest centre was actually the one that came bursting out of the gates on the day of reopening at 111% of last year. The centre is the heart of the local community and has a high degree of non-discretionary spend so saw a great deal of top up / one-off purchases in the first week.

Yesterday we also passed another milestone in Poland with the reopening of restaurants and hair salons. When compared to other EU countries, this has happened much more rapidly. One of the observations that we made in an earlier part in this series was the lack of atmosphere and ability to dwell within the scheme with food outlets and common mall seating closed off. Customers are still taking a cautious approach, but nonetheless there is some life in the malls again not just zig-zagging customers on a mission. Customers are behaving extremely well and observing the rules thus far. The tracking of this new development will be interesting over the course of the next few weeks, as will managing the additional challenges posed by these businesses reopening.

I wanted also to touch on some of the marketing challenges that we have faced to date and looking forward. Sierra Balmain’s marketing efforts are led by Paulina Szymczukiewicz from our Warsaw office. Paula has been working closely with the great marketing team within our partner, Sonae Sierra to join up thinking and shared experiences. Sonae Sierra operates in many jurisdictions across Europe, crucially in markets like Italy, Germany and Spain so the real time knowledge that we have shared has been invaluable. All of this was also pulled together in collaboration with marketing agency, BWP as well.

Whilst the majority of the retailers were closed, we were able to partner with age care charities and local volunteers to maintain community engagement and help those most vulnerable.

As the economic restrictions brought about by the pandemic bit suddenly, Paula and the team identified 4 stages of focus and action: 1. the shock stage, 2. the taming, 3. the re-birth, and 4. planning for the new world. Within each stage there are detailed approaches and specific activities.

Because of the very serious nature of the virus, our approach the whole way has been to avoid trivializing any aspect and to use each centre’s status as the hub of the community and extend that as best we could during lockdown. Whilst the majority of the retailers were closed, we were able to partner with age care charities and local volunteers to maintain community engagement and help those most vulnerable.

Right now, we’re in Re-Birth stage where every customer is worth his or her weight in gold. The number of shoppers at a given time is strictly limited. We are applying our efforts into investigating and implementing non-standard, creative solutions such as interactive fitting rooms, tools blending both “online” and “offline”, and eye-catching store displays in common areas to help retailers suffering the most

Of course, even BC we relied heavily on digital communication but now more so than ever. The crucial element right now when engaging with the shoppers is to keep their trust high and also to swiftly adapt to trends emerging at each centre day by day. Many behaviours before reopening were fairly predictable, others less so. A well-planned strategy therefore should have enough flexibility to adapt to the unfolding trends, whilst remaining focused on the big picture. Digital communication is key in engaging the shopper with these constant changes.  

We want also want to help re-birth the wider community and local entrepreneurs via such actions as revitalizing community event space (fitness, dancing lessons, workshops, etc) especially for those who didn’t get to learn everything about everything from YouTube during lockdown.

We also feel that it is right to support local entrepreneurs who are suffering as a result of the pandemic who needed to close their and also discover new local talents to help them spread their wings. We are looking for people whose business idea has a chance to succeed and in doing so help transform the old concept of the shopping mall.

The tenant landlord rhetoric is ramping up in public yet small steps are being made in private

As for existing tenant discussions, this is still taking place on two fronts and at two speeds – via a plethora of press articles and via direct conversation.

Where the press articles are concerned, the retailer and the shopping centre owners’ positions are equally argued passionately and purport to the same conclusion; we all need to talk. However, the reality of the messages is stark in that there is a widening gap on crucial matters such as the validity of lease contracts and terminations issue thereon by the retailers.

As an example, one owner of a national chain was asked in the press whether he thought the new arrangements, when agreed, would be via an amendment to the existing contract or via an entirely new one stated that the old contracts don’t exist and that they do not consider themselves bound by any such relationship.

The retailers feel that they have already put forward reasonable requests to landlords and that those have been ignored and thus by serving terminations they have now got the attention that they requested. A cynical landlord however would see this as “evidence laying” for what is an increasing likelihood in too many cases, court proceedings.

There is a lot at stake here on all fronts and we just hope that the strongest recovery in the shortest possible time helps take the heat out of an already boiling scenario.