ROI Analysis In Shopping Centers By Using Cubelizer System.

Any investment needs to be analyzed in terms of ROI. Or at least, it should be. In this article we are going to see two uses cases for ROI analysis in Shopping Centers by using Cubelizer System.

We have written about why footfall is not enough as KPI for a shopping center’s proper management and why they are losing a huge amount of valuable information to increase the shopping center profit.

It is time to go further and to analyze how using Cubelizer System helps Managers increase variable income due to marketing strategies and reduce the loss of income due to vacancy. And thus, you may understand how quick a shopping center recovers the investment.

INCREASE VARIABLE INCOME DUE TO MARKETING STRATEGIES

As we wrote in this article, we will be able to improve the impact of marketing campaigns due to add specific tenants metrics in the analysis of these campaigns and not only the increase of footfall.

But how this strategy is impacting in our income statement? And which is the ROI Analysis in Shopping Centers of this use case?

Shopping Center Heatmap

With Cubelizer System, Marketing Managers know which tenants are being impacted the most by a specific campaign or event. We have seen that managers can increase in average between 5%-10% of passing by traffic due to specific oriented marketing campaigns, what drives an increase of variable income about 3-5%.

For example, applying this metrics to a hypothetic mall with the following characteristics:

  • 200 tenants: 140 shops and 60 restaurants.
  • Annual footfall of 10,950,000 visitors.
  • Buyers Conversion: 1% shops and 2.6% in restaurants.
  • Average Ticket: shops 45€ and restaurants 20€.
  • Variable income due to tenants Sales 9% (standard fee).
  • Increasing traffic due to Cubelizer System: 2%

With these data, the time to recover the investment on Cubelizer system is extremely quick: just 2 months.

And now, can you imagine the impact on your income once you are using this information?

REDUCE THE LOST OF INCOME DUE TO CHURN RATE OF TENANTS

Cubelizer System allows Shopping Center Manager to identify tenants with potential problems in advance. It means, they can detect bad trends on tenants that are losing entries but not passing by traffic, and thus, be proactive in their management and relationship.

With this information, managers can:

  1. Share this information with the tenants so they can take action to improve their performance, as part of a proactive management initiative.
  2. Plan some campaigns to specifically impact to these tenants, as it was explained in the previous use case.
  3. Anticipate the search for new tenants at the problematic stores.

Finding a new tenant because of a vacant takes, in average, about 6 months. With the Cubelizer System, managers can identify these problematic tenants in advance and start looking for a new one much sooner, and thus, reducing the time that the venue radically. And that is money.

Following the previous example,

  • Average rent per month: 9,600 €/month.
  • Churn rate per year: 2%
  • Average period in replacing a new tenant: 6 months.
  • Average period an issued tenant is detected in advance due to Cubelizer System: 4months.

In this example, the savings because of Cubelizer Effect raise up to 234,000€. With just one tenant,  the time to recover the investment is 8 months, even considering the whole cost of the initial installation. And shopping malls have many of stores, and unfortunately, many of them in risk of failure. Finding out the problems quickly is key.

What are your figures? Can you measure them?