Investing in a Brand in the Lifestyle Category
By Bob Spratt, president, Hill Partners
To lifestyle centers, in particular, the overall brand and image of the center is paramount. From the merchandising, to the architecture and the aesthetics, to the marketing, everything works in unison to create one larger than life reputation — the brand image. A proper image can effectively set the tone for the property, especially with new developments that continually arise, and with the changing moods, wants and desires of shoppers. At the end of the day, it’s the image of the property that will prevail, setting the tone for quality from day one.
But how can lifestyle centers predict whether their branding efforts overall are effective, and whether the brand is being built or eroded? Telltale signs exist every step along the way, but the acid test is whether shoppers buy, and continue to return to buy, at the prices these premium lifestyle retailers command. Poor shopper support, retailer support, and in general, community support are all signs of a brand that has been eroded over time.
Best Foot Forward
Perhaps the first and most noticeable brand to the community is the name of the property. Many real estate firms have been successful in naming properties by virtue of referencing a historical entity within the community. In doing so, the brand speaks to the larger market and is more recognizable, accepted and a part of the community early on.
But the strongest, more endearing property brands effectively make an emotional connection with their market. This is a valuable first step to build that relationship early. Tangible living examples of properties tied to a historical reference include Clemmons Town Center and Biltmore Village. These endearing brands are regarded as true property assets for a reason. Well built in the community’s eyes, endearing brands are more resilient in trying times, such as economic downturns, are more believable and are more sustainable — not to mention more valuable. Like any property, the more well regarded it is, the higher the value. And, when we speak with regard to the development industry, it’s all about desirability. Rarely, if ever, do you see a property that the community feels emotionally connected to failing. From this perspective, your brand is a tangible asset.
Building or Eroding? It’s a Choice.
It’s true that a strong brand is built from the inside out. With that said, bringing strong, well respected names and programs to the project early in the process is perhaps the most important aspect of the long-term brand. Still, tools that we have found effective in helping to build our property brands include building early relationships with key partners, a keen focus on merchandising, an uncompromised approach to securing quality retailers, leasing brochures, and advertising, web and e-mail marketing efforts that put the information consumers want when and where they want it and more. Especially with newer communities, however, public relations go a long way. Offering a sincere third party objective opinion shared with the community, effective public relations can also efficiently help a newer property build lasting and meaningful relationships in the community, building credibility along the way.
Of course, in the development stage of building a new lifestyle center, there are no real shoppers on the property with which to build your brand. Still, it’s critical that we work with all parties involved to set the tone – set the stage for the brand overall and the things to come. Doing so transforms the center quickly into a living part of the community. From there, strong brands work diligently to ensure no stone is left unturned in the effort to live up to the brand promise you’ve given to shoppers and the community at large.
In contrast, for the same reason, redevelopments within communities, if not carefully handled, can quickly erode a brand. In many cases, when HPI redevelops a property, it’s important to consider, as part of the initial strategic plan, how to distance itself from the mistakes of the past. Renaming, redesign and an upgrade of the overall image of the property is key to breaking free from the past, and allowing the property to embrace a new and fresh image and at the same time weaving the property into the fabric of the already existing community is key to redevelopment. In short, use branding as a strategy to assist the property in breaking from its immediate past.
One Larger, Collective Brand
From Hill Partners’ perspective, the collective brand of HPI as well as the individual brands built within our projects offer a strong statement of quality in everything we do. It’s just smart business. A well-built brand aids considerably in the external community in terms of gaining support with financing, landowners, investors and newly recruited tenants. It fuels employee support of initiatives and elevates public opinion.
One of the best examples we can share of a well built, in fact, built to last brand, is that of The Town Center at Levis Commons. The success of this property has been built with a collective team, each anchored into the vision that we were trying to create for this bright spot in northwest Ohio. We created a simplified way of life — a beautiful, safe and comfortable environment where families can bring their children, friends can meet, business people conduct business — all at one time and in the same place. In the end, the brand promise remains. The Town Center at Levis Commons absolutely is life simplified. We brought the community the most upscale shopping venue in the greater Toledo market – and in return, shoppers continue to reward us every day with their loyalty and sales, allowing quality retailers to thrive in the environment.
Dollars, Sense and ROI
Still, at the end of the day, there’s the issue of the dollars and sense of investing in a brand. In a world that’s virtually impossible to track dollar for dollar investments against retailer foot traffic and sales, many developers have chosen to abandon the effort of brand building overall. Still, at HPI, we know that credible research demonstrates that when a brand's budget is cut, its market share is greatly affected … and not just for one year, but for up to four. In fact, a cut in brand building advertising below certain “danger” points in almost every case will show a decline in profits within a two year period. That makes a lot of long-term sense to our team.
Hill Partners, Inc., is a commercial real estate firm specializing in providing retail and mixed-use development solutions.