“This Research Gave Us A Level of Information That Put Us On Par with the Research Being Done by Prospective Retailers”–Rich Hill

By Oscar Zaragoza

Attracting aspirational and luxury brands to a mall is tough at the best of times. Convincing them to commit to a multi-use development project years before it opens is almost unheard of in today’s market.

That was the challenge facing J. Richard Hill & Co. when the company was tasked with identifying target retailers for his client, Wai Kai Commercial Development, LLC. Wai Kai is a planned 235,000-square-foot mixed-used development in West Oahu, Hawaii located around a 52-acre man-made lagoon adjacent to the Pacific Ocean. Projected to open in fall 2021, it is designed to capitalize on its idyllic location. The coastal development features spectacular views of Diamond Head, ocean waves that spray into the air as they crash against the coral shelf and unobstructed sunsets at the end of the day. “It’s as authentic as you can get,” said Rick Hill, president and CEO of J. Richard Hill & Co.

Hard data needed
But Hill knew the picturesque setting alone wouldn’t be enough to get retailers to take a chance on this project, as it is located about 25 miles west of Honolulu and away from several established tourism hot spots. To identify the ideal tenants, Hill needed hard data to support the leasing effort by making the case that this was an opportunity that retailers couldn’t pass up. The company devised a plan to develop a targeted campaign to appeal directly to the nine luxury and aspirational retailers it thought would be the best fit for the development.

It was a unique challenge. Established malls have long struggled to gain complete views of their visitors to woo tenants and develop relevant and effective direct marketing campaigns. But in this case, with only blueprints and a site map, there were no visitors to profile. To compound matters, the leasing team was not clear on exactly what type of consumers typically shopped at the luxury brands it was targeting or if those consumers were already present in sufficient numbers around Wai Kai.

Turning to mobility analytics
To answer these questions, J. Richard Hill & Co. worked with Environics Analytics, which recommended mobility analytics to profile the customers visiting those retailers on the U.S. mainland. Mobility analytics works by using aggregated mobility data collected from smartphones to identify devices observed in defined areas.

By geofencing the existing standalone stores for each target retailer, Environics Analytics was able to connect visitor data to its demographic, behavioural and other data to build detailed profiles of the consumers visiting those stores. To make it easier to spot patterns, shoppers for each brand were divided into segments around shared attributes. If the mobility data identified a segment that visited one of Hill’s targeted retailers 30% more often than the average consumer, then those retailers were singled out for further study. The research also explored whether any of the targeted retailers engaged the same type of consumer, which would also help bolster J. Richard Hill & Co.’s real estate proposition.

Pleasantly surprising results
Armed with these insights, the next task for J. Richard Hill & Co. was to see if those same types of consumers were already present in high concentrations around the planned Wai Kai development. To ensure a fair representation of the local community who could easily access the development, the area was divided up into 14 sectors, factoring in drive times and natural barriers such as geography, major roads and expressways. Once these sectors were identified, Environics Analytics segmented the existing households by ZIP code and at the U.S. Census Block Group level to see if the same consumer segments identified on the mainland using the mobility data were present in Oahu.

The analysis revealed that there is a clear and significant demand for upscale and luxury retail in West Oahu. Prior to getting the results, Hill believed that wealthy people with household incomes above $200,000 would have been the main consumers shopping at the brands he was approaching. But the data revealed some surprises. In one instance, a segment that largely consisted of young single households with incomes of $60,000 visited some of the target retailers 10 times more often than the average household. “What jumped off the page for me was that they were spending a disproportionate amount of their incomes to achieve a certain aspirational lifestyle,” he said.
The information really opened his eyes about how perceptions about consumers can be so different from reality. “We found the households around our site represented some of the highest potential for luxury retailers,” he said. “I think that surprised a lot of people.”

The study revealed that there are more than 100,000 households in West Oahu that are likely shoppers of luxury goods. High net worth and aspirational households in the Wai Kai area are more than three times as likely to shop at the luxury brands that J. Richard Hill & Co. identified as potential fits for its development. Most importantly, in West Oahu the greatest concentration of households with the highest probability to shop luxury retail are centrally located in the neighbourhoods around Wai Kai.

“This research gave us a level of information that put us on par with the research being done by prospective retailers,” said Hill. “It has allowed our leasing team to have meaningful, ongoing conversations with upscale and luxury retailers.”

Oscar Zaragoza is a senior consultant with Environics Analytics, specializing in providing consumer insight and location-based intelligence for businesses in the retail, financial, insurance, and senior housing sectors.

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