Time is money

December 12, 2020


Time is money

Shopping malls are facing very difficult times today. Online competition, warehouses, retail stores, and large supermarkets are increasing in number. Due to increased competition and a changing market, shopping malls must discover and understand the behavior of potential buyers. Traditionally, managers and owners have sought to understand buyer behavior through the number of people entering their mall. However, the number of people entering has been declining, so the focus is now on the quality of the shoppers' visit. Shoppers vote with their feet, therefore the amount of time they spend in a shopping mall (dwell time) is a key indicator of the overall shopping experience quality.

According to a study from the United Kingdom conducted by Path Intelligence, the research identified an inverse relationship between foot traffic (dwell time) and time spent. Now, what is dwell time? Dwell time is the amount of time spent in a closed space where the sounds produced inside it do not pass to the outside or vice versa. The aim of this study was to understand and quantify the link between the time shoppers spend in a shopping mall ("dwell time") and the impact on total mall sales. As a secondary goal, the research sought to see what mall managers could do to improve the quality of a shopper's visit and increase their dwell time. The study was conducted in a shopping mall between March and November. Dwell time data was captured using Path Intelligence technology, which was able to continuously collect statistical data related to anonymous buyer behavior during this period.

Importance of this study:For some time, there has been a debate about whether shoppers spend more when they stay longer at the mall. The question is critical. Brands want to know if they can bring 10 million shoppers beyond the doors of their store in a shopping mall (for example) and measure the performance of malls based on that. However, since the quality of the shopper's visit (not just the quantity) matters, shopping malls are making brands choose store locations by only providing them with half of the information. Additionally, mall managers choose strategies for their malls based on whether they want shoppers to stay around certain stores for a long time. Managers who believe shoppers should stay longer provide more events, while others change prices to encourage shoppers to enter, spend, and leave. Until recently, it was not possible to quantify the impact of visits on sales. Dwell time information was only available (at best) twice a year through surveys of a few hundred shoppers entering and exiting malls, and therefore, there was not enough information to conclusively investigate the linkage. Instead, this study used Path Intelligence technology to continuously gather dwell time information for each surveyed shopper over a nine-month period. This is the largest dataset ever collected about shopper dwell times and empirically tested it against sales. Thanks to the information from this mall, it was possible to investigate and understand the nature of the relationship between the length of time shoppers stay in the mall and total sales in that mall.

Key findings:
The key conclusion of the research is that shoppers spend more when they stay longer. The study showed that there was a significant and positive relationship between dwell time and sales. Specifically, the research found that a 1% increase in average daily dwell time is associated with a 1.3% increase in mall sales. In other words, dwell time may be decreasing, but sales can remain high if shoppers spend more time inside a shopping mall. It's the quality as well as the quantity of visits that counts. The study also took a preliminary empirical approach to identify key factors that directly influence shopper dwell time. Specifically, the research identified an inverse relationship between foot traffic (dwell time) and time spent - when the mall becomes busy, shoppers shorten the time they spend there. It has been hypothesized that shoppers visiting crowded malls feel "overwhelmed" and end up leaving the mall before they have purchased the items they were looking for. Shoppers were found to react positively to events and when provided with entertainment - dwell time consistently increased on days when special events took place (although further research is needed to identify where shoppers were during this additional time). The research findings demonstrated that the presence of vacant stores negatively impacts shopper dwell times.

How can mall owners and managers use dwell time?Path Intelligence technology has shown that longer dwell times are associated with higher sales and that mall managers can have a direct impact on the length of time shoppers stay. How does Path Intelligence technology work? Path Intelligence technology is the first reality mining tool. It uses data detected by machines to understand patterns of human behavior. It works by detecting anonymous transmissions from mobile phones carried by mall shoppers. This technology is a tool that replaces the need to conduct surveys of shoppers. Mall managers and owners can obtain an automatic insight into how their malls are used. For individual stores, the advantage is understanding the path shoppers take and how it is significant for their sales. This information can also help the shopping mall itself. For example:

  • Understanding foot traffic in the mall.
  • Ensuring that stores are paying optimal rent given their location within the mall.
  • Identifying underutilized areas within the mall.
  • Understanding the impact of stores in the mall.
  • Measuring specific promotional activations or events within the mall.
  • Assisting in the daily operational planning of mall management, such as cleaning and security.

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