Shopping Centre in the City Centre of Plymouth - Case Study Example

Introduction: Drake Circus is a shopping centre in the centre of Plymouth, England. It is a newly built 49,200 m' (530,000 ft covered scheme which opened its doors to the public for the first time on 5 October 2006. It includes such retailers as Marks & Spencer, Next, Primark and Schuh (en.wikipedia.org/wiki/Drake_Circus). Drake Circus is Plymouths first covered shopping centre and is home to a wide range of well-known High Street and independent stores and restaurants. It has eight major store plus over 48 shops, cafes and restaurants. It is anchored at one end by Marks & Spencer and at the other by Next and Primark. All three are the largest stores in their group west of Bristol. It is full of modern facilities for shoppers, including 1,270 car parking spaces, lavatories, lifts, disabled access and the latest shopping centre information display screens. Drake Circus is the result of a 200 million private investment by P&O Estates Limited and Morgan Stanley Bank. It is managed by Donaldsons LLP which runs over 250 shopping centres throughout Europe (www.drakecircus.com/background). History The original Drake Circus shopping centre was a two level centre with open malls constructed in the early 1970s. Initial proposals to redevelop it in the early 1990s failed, but the developers, P&O Estates, tried again in the early part of the 21st century. Plans were drawn up for a much larger centre and having signed up Allders as the first anchor tenant in 2001 and Marks & Spencer in early 2004, work started on demolishing the old centre and the adjoining Charles Cross car park in February 2004. The new building, designed by Chapman Taylor Partnership, has provoked a mixed reception (en.wikipedia.org/wiki/Drake_Circus). The scheme suffered a setback in January 2005 when Allders went into administration, but other tenants, including Zara, Boots the Chemist, Virgin Megastore and H&M continued to commit to the scheme. New anchor tenants to replace Allders were found in summer 2005 in the guise of Next and Primark. The new development was topped out in June 2005 and the scheme opened, 90% let, on 5 October 2006 (en.wikipedia.org/wiki/Drake_Circus). Accessibility: Drake Circus offers step-free access and easy to use lift facilities to all levels. There are disabled toilets on the lower ground level and also next to the Restaurant Court at car park level one. The Restaurant Court toilets include a special room for more people who have profound and multiple disabilities and their carriers. Shop mobility can be found on car park level two. The new car park has five levels, with the first two levels larger than the upper three. It will have dedicated entry and exit ramps which will keep queue times to a minimum. There will be wider spaces, more headroom and much better levels of lighting. Interior finishes will be painted white with good direction signage for both cars and pedestrians. The car park will be well lit, with high levels of visibility for drivers and those on foot and clear signage that will comply with the 'secure by design' standard promoted by the police authority (www.drakecircus.com/background). The whole of Drake Circus shopping centre has been designed, wherever possible in line with the latest disability access regulations, will be wheel-chair friendly with ample provision of lifts, ramps and specially designated parking spaces for blue badge holders. Enhanced facilities for the ambulant disabled will also be provided (www.drakecircus.com/background). The scheme incorporates facilities for the loan of wheelchairs and powered scooters. Car Parking: Drake Circus is a "Pay on Foot" car park - so no more worrying about your time running out and having to dash back to your car! Simply take your ticket when you arrive and keep it with you while you shop. When you're ready to leave simply pay by cash or card at one of the pay stations, located on each car park levels before you return to your car. Technological impact in shopping centre sales: Advances in Information Technology are constantly transforming competitive dynamics in marketplace. One of these advances is bar code readers, which is a technology that uses a special tag or label embedded with a computer chip and an antenna that allows it to communicate with a reader or transponder. Further extension of this barcode reader is the RFID's which can store data and can even have processing capability. Potential benefits of RFID are numerous for all stakeholders in retailing industries. Some of these benefits include reduced labor costs, simplified business processes, improved inventory control, increased sales, and reduced shrinkage. In fact, many retailers and suppliers have already initiated various projects to utilize the technology. Studies have shown that most companies are intensely interested in the technology as a means to improve operation and gain competitiveness in the market. A recent study, commissioned by Wal-Mart, empirically demonstrated that RFID improves inventory management by significantly reducing downtime from stock turnover (Hardgrave, 2005). Steeple Analysis: Issue Implication & impact Potential action Social / Cultural As the largest city on the South Coast, the biggest shopping centre west of Bristol and a major regional centre in the West Country, Plymouth City Centre offers an ideal demographic mix for events and promotions. Population 256,000 Retail catchments area 465,000 City Centre floor space 130,000m/sq City Centre footfall 250,000/week Retail ranking 29th (Experian) Day visitors 11 million Students 16,000 Most visitors are tourist and not loyal customers. Focus should be on products which attract more tourists and thereby customers. Technological innovation Increase in the hyper markets throughout UK. Online shopping also reduces customer turnover. Easy for customers to shop around for the best price deal. Special in store gifts and promotions can attract customers to visit stores more frequently. Economic issues Rise in inflation in the country has result in a rise in the prices of the products. Lower priced goods from China and India. The local population comprises of 16000 students, therefore they have low disposable income level. The daily 11 million visitors to Plymouth possess an immense opportunity for the shopping centres to flourish. Average Consumer spending has decreased. The local manufacturers are taking the brunt of low priced good from China and India. Maintain old stocks as well at low prices. Education / training Many job vacancies are part time, and mostly student do these jobs to earn money. Therefore they do not have much experience of working in shopping centres. Most of the Consumers are visitors and educated. Political No apparent Political issues, the vicinity is peaceful and not affected by political issues. Increasing Unemployment rate in the UK. Labour Laws and Trade Laws inhibiting the local manufacturers to reduce prices and be competitive. Local Manufactures can outsource their manufacturing. Legal Increasing emphasis on consumer rights and exchange policies. Increase quality concerns among the manufacturers. Standardise manufacturing procedures to ensure quality. Environmental protection No potential problem. Porter Competition analysis Issue Implication and impact Potential action In sector competition Currently there is no shopping centre so big are Drake Circus. Although there are retail stores of BHS, Debenhams near by and Sainsburys Armada Centre nearby but no potential competition by these stores. To save the parking fee and time many customers prefer going to the retail outlets and shopping from there. Enrich customer shopping experience by providing an ambience of entertainment and relaxing. New entrants More shopping malls developing in the area. More shopping mall means that the customers will be divided among the malls. Offer discounts, conduct events within the shopping malls to attract customers, Substitute products Retail outlets and stores in the nearby vicinity. Reduces customers' turnover. Include more brand outlets in the store. Buyer power Buyer power is relatively low, as the prices are fixed. Customers prefer buying them from the retail outlets. Introduce discount stores and factory outlets. Supplier power Low supplier's power. Delays in deliveries. Encourage instant delivering by giving incentives. Outline marketing mix review Product All types of brands and food stuff available in the City Centre. More brands needed. The customers would not opt to go to other shopping centres. Price Regular prices are charged. Need to open factory outlets to maintain low prices and thereby attracting customers. Encourage factory outlets. Place Shelf Space is necessary to display the product More shop area required. Arrange more shelf space for displaying the products. Promotion Special in house advertisements, sales promotions on special occasions and discounts are major promotion strategies. Higher operating costs. Organize events to generate money for advertisments. People Mostly visitors and tourists. Less loyal customers. Focus on one time selling. Process Encourage more visitors to visit Drake Circus Organize event and shows with in the shopping centre. Hire companies to manage events. Segment Analysis: The main target customers of Drake Circus Shopping centre are Visitors, Tourist and Students. Students have a plethora of shopping and experiential consumption options. The enclosed shopping mall is a significant venue for these young students in that it is capable of offering both a shopping and an experiential environment. Students seem to be concerned with how "cool" (up-to-date or trendy) stores are within a mall. As DeMarco (2004) notes in a recent Washington Times article, students are looking for "cool stuff." Baker and Haytko (2000) in their qualitative study of girl students and their mall shopping experiences, find that the students are looking for stores that carry specific merchandise, especially the latest fashions. "Coolness" of the mall is tied to the types of clothes and the merchandise the stores carried. Tourists, including high schoolers, on the other hand are attracted to unique, contemporary and sophisticated merchandise in stores (Kinley et al., 2002). Shoppers in general are attracted to "novelty". All of these qualities are interpreted as meaning a perceived level of trendiness, uniqueness or coolness. The prevailing word for this characteristic, according to a random sample of interviews conducted with teens, is cool - or a level of coolness. Coolness is related to a certain level of fashion, but is not necessarily "image" related; e.g. cool merchandise may be trendy clothes OR trendy cell phones. Coolness is associated with certain stores such as Next Outfitters, MnS OR Target stores that carry merchandise considered trendy for students but at a value price. Will Drake Circus be a threat to existing retailers and draw shoppers away from the rest of the town centre' Some retailers are choosing to relocate their premises to the new Drake Circus scheme as it offers the large, modern units they need. This in turn will give smaller retailers the opportunity to take space in the town centre, in units more suited to their businesses. This shift will be an encouragement to new and up-coming local companies. The mix of retailers at Drake Circus will complement the range of shops in the rest of Plymouth town centre, creating an overall improved shopping experience in Plymouth (www.drakecircus.com/background). Marks & Spencer is the major anchor store at the western end of Drake Circus. The new Marks & Spencer store at Drake Circus will provide 80,000 sq ft of retail space - almost twice as large as the existing Plymouth store. The store has been extended and completely revamped with a contemporary new look, providing customers with an improved retail experience and extended facilities (www.drakecircus.com/background). The new store will also have bridge links to the car park and mall area of the new Drake Circus development. Conclusion: Drake Circus is an icon of entertainment and shopping in the Plymouth area. It not only is the biggest shopping centre in the region but also provides unforgettable entertainment and a splendid shopping experience to its visitors. Plymouth area is visited by 11 million people daily and there possesses and immense opportunity for the Drake Circus to generate sales. References: DeMarco, Donna (2004), "Retailers Woo Teenagers with 'Cool Stuff' at Low Prices. Eastlake, Mary Ann, Sherry Lotz, and Soyeon Shim (1998), "Retail-Tainment: Factors Impacting Cross-Shopping in Regional Malls," Journal of Shopping Center Research, 5(1): 7-31. en.wikipedia.org/wiki/Drake_Circus Finn, Adam and Jordan Louviere (1996), "Shopping Center Image, Consideration, and Choice: Anchor Store Contribution," Journal of Business Research, 35: 241-251. http://www.drakecircus.com/ http://www.drakecircus.com/background http://www.plymouth.gov.uk/homepage/communityandliving/citycentre.htm Ibrahim, Faishal and Chye Wee Ng (2002), "Determinants of Entertaining Shopping Experiences and Their Link to Consumer Behavior: Case Studies of Shopping Centres in Singapore,"Journal of Retail and Leisure Property, 2(4): 338-357 Kinley, Tammy, Youn-Kyung Kim, and Judith Forney (2003), "Tourist-Destination Shopping Centers: An Importance-Performance Analysis of Attributes," Journal of Shopping Center Research. Wang, Shuguang, Ricardo Gomez-Insausti, Marco Biasiotto, Pina Barbiero and Bruce McNally (2000), "A Comparative Analysis of Entertainment Cross-Shopping in a Power Node and a Regional Mall," Journal of Shopping Center Research 7(1): 59-84. Read More