When Resolution Property acquired Park Avenue in Bilbao in 2006, it was in the final stages of development. The scheme was originally destined to be a full price shopping centre but the Resolution team arrived and turned the initial plan on its head. “When we arrived and took the set-up on board we decided to convert this full price shopping centre into a factory outlet. As it was our second venture into factory outlets we understood that in order for a factory outlet to succeed it would need a lot more management involvement to drive sales,” explains Michel Nangia, senior manager at Resolution.

Despite the majority of building work already having been completed, footfall counters were yet to have been installed when Resolution took the scheme on. However, having accurate and detailed footfall data became even more important as the new format of the centre began to take shape. As is often the case on
the Continent, a portion of the rent is turnover based, deeming the quality
of the data absolutely crucial.

Resolution instructed footfall counter company PFM to create a bespoke service for its Bilbao scheme and counters were installed at every entrance to the shopping centre itself, but also to the individual stores. “We wanted to be able to monitor the flow of people walking into the scheme and then into each individual store. We wanted to understand not only why shoppers were walking into a store but also how often shoppers were actually buying in the stores,” recounts Nangia.

In addition to this, clauses were also inserted into tenants’ leases requiring them to disclose turnover figures, thereby allowing the retailer and the centre management team to work out store conversion rates. “After receiving footfall data from PFM and turnover data directly from the tenant, we incorporate all of that into PFM’s website,” Nangia explains. PFM then processes all of the information and produces a weekly report, complete with a series of key performance indicators (KPIs) for Resolution and tenants to peruse.

“Those KPIs enable us to get a better understanding of why a tenant is performing well or badly, and it also enables us to think about solutions we can work on with the tenant to increase sales,” elaborates Nangia. Resolution plumped for a bespoke horizontal infrared detector for its retail stores which are very discreet, to stay in keeping with the aesthetics of the scheme.

The horizontal infrared detectors send an infrared beam point to point across the area being monitored. As
a customer passes through the beam a count is recorded. The system uses two beams per detector so the direction of travel can be determined, allowing PFM to calculate an average dwell time. David Sturdy of PFM says horizontal infrared was opted for in Bilbao as it was the most cost effective solution over a large site
– 61 detectors are currently installed with more to follow.

After collating all of the relevant information and feeding it in to the applications on PFM’s website, centre management then meets with tenants on a weekly or monthly basis and examines their individual reports and talk through methods to increase sales where necessary.

“If the capture rate is too low for instance, we’ll know that the store isn’t doing enough to attract people into the store. Or we may find the capture rate is very high but the conversion rate is very low. This means that people are walking into the store but finding nothing to trigger a purchase. This can be down to pricing, merchandising, bad customer service, so there’s a list of things that can be worked on from
the KPIs,” explains Nangia.

The system clearly is mutually beneficial for tenants and centre management alike – both have a shared interest to drive sales. However, tenants are not always happy to foot the bill for the counters, especially during times of economic hardship, as Nangia has discovered. “At the beginning of the leasing process, when we weren’t yet hit by the credit crunch, and Spain has been badly affected, we didn’t have too many problems convincing tenants that they should pay for the counters,” he recalls. “In today’s market we mention it and tenants just laugh at us and say ‘no way’.”

They may laugh in the face of installation costs, yet tenants remain liable for maintenance and data management costs associated with the counters, which is added to their service charge. Despite current pressures to reduce service charges, Nangia says tenants are largely happy to pay. “We’re providing them with a useful service; off the back of these reports, tenants do often manage to boost their sales. And we think it’s very fair to recover the cost of the data management from the tenants,” he adds.