Insight into Action Ben Dimson October 2016
About British Land • One of Europe’s largest publicly listed real estate companies • Our properties cover 30m sq ft and are home to 1,200 organisations £ 20 bn total assets under management £ 10 bn retail assets under management • 60,000 people live and work across our London office & residential portfolio • 330m people visit our multi-let retail sites every year “We create outstanding places for modern consumer lifestyles: places to shop, eat and be entertained” 2
Executive Summary 1 Stores are at the heart of the consumer journey 89% of retail sales touch a physical store 2 Channels have become blurred Online and offline are symbiotic 3 Convenience is key Consumers shop more locally than ever before 4 Consumer expectations are changing Retail and leisure are increasingly intertwined 5 British Land is being proactive By creating Places People Prefer 3
True Value of Stores • From multichannel to omnichannel • How to allocate online sales? • The True Value of Stores formula Total online sales Online sales of store operators Online that touched the store • Beyond the True Vale of Stores there is a ‘halo effect’ 4 Source: Verdict
89% of retail sales touch a store Online Online sales Mail order & pure-play not browsed TV shopping Online sales sales Click & in store browsed collect £4bn in store £13bn sales £18bn £8bn £5bn Total True sales 89% of total Physical Value of Boost retail sales £313bn sales Stores +5% in 2015 £266bn £278bn Total online sales Online sales of store operators Online that touched the store • Click & collect and store browsing boost UK physical sales by +5% 5 Source: Verdict
Excluding grocery, the boost to physical rises to +9% Online Mail order & pure-play Online sales TV shopping sales not browsed Online sales Click & in store browsed £4bn collect in store £11bn sales £11bn £8bn £4bn Total True sales Value of Physical Boost £174bn Stores sales +9% £148bn £136bn Total online sales Online sales of store operators Online that touched the store • Excluding grocery, 66% of online sales are from store operators • Of those sales, 53% have touched a store 6 Source: Verdict
The boost is determined by 3 levers 1. The ratio online-to-physical 2. Within online, the share of store operators vs pure-plays 3. Within store operators online sales, the share that touch a store Mail & TV Online Did not pure-plays Online Store touch a store sales browsing Store Physical Touched operators sales a store Click & collect 7 Source: Verdict
Boost varies considerably by sector +32% +25% +20% +12% +9% average boost excluding Food & Grocery +8% +5% +5% +3% +3% Electricals Sports & Toys Department Clothing & Entertainment Homewares Furniture & Health & DIY & stores Footwear Floorcoverings Beauty Gardening • High boost in Electricals: high online penetration, showrooming and click & collect • Low boost in Health & Beauty: limited online penetration, impulse and needs- based buying 8 Source: Verdict
Role of store differs by sector • Examples: – Electricals vs. Entertainment – Department stores vs. Clothing & Footwear TVoS boost +3% Health & Beauty 92% 2% 2% 2% +3% DIY & Gardening 90% 2% 2% 3% 2% Department +20% 77% 8% 8% 8% stores Furniture & +5% 87% 4% 3% 5% Floorcoverings Homewares +5% 84% 3% 3% 6% 2% Clothing & +12% 77% 5% 5% 7% 3% 3% Footwear Sports & Toys +25% 60% 2% 13% 13% 9% 3% Electricals 49% 6% 10% 17% 16% 2% +32% Entertainment 46% 3% 4% 44% 2% +8% Physical store sales Click & collect sales Online sales browsed in store Online sales not browsed in store Online pure-play sales Mail order & TV sales 9 Source: Verdict
Differences within sectors • Example: 20 leading Clothing & Footwear retailers • Boost to physical sales ranges between 0% and 30% Boost to store sales +30% +25% +20% +12% average boost +15% for Clothing & Footwear +10% +5% +0% Retailer 1 Retailer 2 Retailer 3 Retailer 4 Retailer 5 Retailer 6 Retailer 7 Retailer 8 Retailer 9 Retailer 11 Retailer 10 Retailer 12 Retailer 13 Retailer 14 Retailer 15 Retailer 16 Retailer 17 Retailer 18 Retailer 19 Retailer 20 10 Source: Verdict, the size of the bubble represents the 2015 True Value of Store sales
Shopper profile, ex. grocery • Under 35 year olds use stores the most, and their use of online pure-plays is lower • Over 35 year olds are heavier users of click & collect • Over 65 year olds still use mail order and TV shopping TVoS boost 16 – 24 +8% 81% 2% 5% 6% 6% 1% 25 – 34 +9% 80% 2% 5% 6% 6% 1% +10% 35 – 44 77% 3% 5% 6% 7% 2% +9% 45 – 54 77% 3% 4% 6% 8% 2% +7% 55 – 64 79% 3% 3% 6% 7% 3% +7% 65+ 79% 3% 3% 5% 6% 4% Physical stores sales Click & collect sales Online sales browsed in store Online sales not browsed in store Online pure-play sales Mail order & TV sales 11 Source: Verdict
Outlook • Click & collect set to double by 2021 • True Value of Stores to grow faster than physical sales alone • ‘Halo effect’ also expected to grow as stores continue to influence online sales £20bn £15bn £15bn £11bn +16% £9bn £11bn Growth £8bn Physical store sales £4bn Click & collect sales Online sales browsed in store Online sales not browsed in store +11% £151bn Other remote sales £136bn Growth 2015 2021f 12 Source: Verdict
Channels are becoming increasingly integrated with the emergence of a ‘halo effect’ +55% Postal area share of retailer website visits, indexed vs store opening date 150 140 130 120 +55% 110 100 90 80 70 60 50 -20 -15 -10 -5 Store Opening 5 10 15 +20 weeks weeks 13 Source: Hitwise, based on a sample of 18 retailers opening at BL schemes
True Value of Stores furthers our understanding of affordability • British Land retail portfolio affordability % 20 17% 15% 15 10% 9% 10 5 0 Rent to net sales Total occupancy cost to net sales Excluding the True Value of Stores Including the True Value of Stores 14 Source: Verdict, British Land
Consumer expectations are changing We are expanding into new segments to enhance the retail experience F&B and Leisure are often interlinked with Consumer spend (2015) Retail Leisure 6% Food & Beverage 77% 8% Housing 25% Health & Beauty 4% of F&B spenders in UK centres also spend on Retail Home & Leisure 11% 38% Fashion Transport & 6% Comms 15% of Leisure users also spend Education on F&B Grocery 2% 12% Other 11% Historical focus Recent additional focus Not relevant to BL Source: Oxford Economics Source: British Land exit surveys 2015 15
Consumers are shopping more locally than ever before “Which of the different aspects of the shopping experience listed below are important to you ?” 78% Distance 90% 4.2 miles 78% 80% 74% Per shopping trip 70% on average 60% (vs. 5.2 in 1995) 60% 50% 50% 39% Travel Times 40% 35% 18 mins 30% Per shopping trip 20% on average 10% 0% Convenience Retail Offer Parking Quality of Services Food, drink Facilities Shopping offered & leisure Environment offer Source: DfT National Travel Survey 2014 16 Source: Kantar survey for BL, Nov 2015
Retailers are creating hub and spoke networks To support fulfilment and maintain brand awareness 17 Source: CACI
Our portfolio is well positioned to meet both consumer and retailer demands BL regional centres 1 BL local centres BL asset catchments Regional Attracting visitors from a wide catchment for planned trips 2 Local Fitting into the daily life of local communities 18
We deliver through our Placemaking framework, Creating Places People Prefer We We We We Connect Design Enhance Enliven Accessibility Form Segment mix Customer service Convenience & Efficient & relevant Balanced retail, F&B, On-site hospitality car parking built environment leisure & services & customer service Community Authenticity Events Occupier mix Supporting & Look & feel, streets Creating a buzz and Selecting brands involving local people & landscaping driving footfall which fit the location Communication Function Occupier service Experience Branding, messaging, Facilities, safety & Supporting our Creating lasting marketing & digital way-finding occupiers impressions 19
We connect Accessibility Website Platform Promoting Click & Collect through convenient access & free parking Tollgate, Colchester Glasgow Fort Community 13,000 people benefited from this year’s community programme Communication 10m website sessions p.a. 20
We design Authenticity Form Meadowhall, Sheffield £60m c.£300m invested in improving Meadowhall the assets over the last 3 years refurbishment Glasgow Fort currently underway & £300m proposed Leisure Hall Function Doddle providing Click & Collect facilities at Ealing Broadway Ealing Broadway 21
We enhance Whiteley, Fareham Whiteley, Fareham Occupier mix Occupier Service Broader range of Ability to assess peel-off new occupiers rates using unit counters Segment mix 8% F&B, up from 2%, Old Market, Hereford with a target to double this 22
Recommend
More recommend
