Business Improvement Districts and their role in place management.

I had the pleasure of speaking at the British BIDs conference this week in London. BIDs, as place management entities, are growing significantly and were borne out of their success in North America. They now number over 162 (150 at the time of the survey), of which 122 contributed to the British BIDs annual survey (which I would recommend that you read). I was but one of a number of speakers at the conference, so my aim here is to summarise the key points that I found of interest for the world of retail and leisure and the places they operate from.

Andy Cresswell from Midcounties Co-Op spoke about their £300m travel business: only a third is online and revenue growth through their branches is faster than any other channel. This is a interesting point at a time when Virgin plan to open 30 high street shops, yet the sector overall declined by nearly 60 shops in the top 650 town centres in the first half of this year. Experience is the key word here, and the Internet gives retailers the opportunity to show the art of the possible. At the end of the day, especially on big-ticket items, we all like to be sold to. It reaffirms the value in our purchasing psyche!

Paul Swinney from Centre for Cities made some very good points from their recent report on employment, or should I say the lack of employment, in our towns and cities. If you don’t live or work in a town then the chances of you visiting it on a regular basis and spending money are significantly reduced. Most job growth has been out of towns, and many councils have led the way by moving their offices out of town – not a great example of leadership by example. A defining statistic is that of the 36 enterprise zones set up, all of them are OUTSIDE urban areas!

Cathy Hart from Loughborough University gave us some excellent insight into the consumer and how they behave. I was involved with Cathy in identifying the six centres they identified as target consumer locations, and believe that an ongoing understanding of the consumer is key in order for town centres to adapt and change for success. Over a quarter of visits by the 200 tracked consumers were to out of town supermarkets, and 13% of their ‘visits’ were online. This correlates to 12% of retail sales being online.

Fashion and general clothing is the most frequently shopped category. This is interesting in light of the impact of ASOS and online delivery. This fact is a key point for town centres, as one of the things I always look at in the LDC data is the number of fashion and general clothing retailers and where they are located. By identifying the chain clothing retailers you are essentially defining the prime of a town centre – often focused in and around a shopping centre. 60% of customer journeys are habitual. This just shows that you have to work very hard to change the human psyche, and therefore psychology based on experiences is key. There are some fascinating psychological studies into how human behavior can be changed, be it from the smell of fresh coffee, BOGOF offers, to limited time events etc. No time to cover this but it is an increasingly important aspect to place management.

The final significant point was that social groups visiting town centres spend more than individuals. This brings one back to the raison d’etre of town centres – meeting places. Community is an often misused word in modern society but the value to places where they have it, is far greater than those that don’t, e.g. dormitory towns, transitory towns, etc. Having said all of this, if as a shop you lack choice, range, and stock then you have no hope of attracting these people to spend ,and this was cited as a big problem by the consumer panel.

Richard Bradley, the grandfather of BIDs who founded them in the USA, gave some fascinating insights into place management across the pond. His great saying was ‘when you get to a fork in the road take it’ – great advice! The key aspect to be addressed is the strategic management of place, which hits on the thorny subject of BID terms, as well as the need for towns to have long-term strategic plans of 20 years as proposed in the Grimsey Review. I think this is important, as to build something in the UK takes anywhere between 10-20 years depending on planning (etc.) and retailers are then expected to commit to 10-25 year leases, so it is important that the road ahead is clear and aligned to the success of all. As we see in politics short term plans do not enable the greatest chance for success especially in the world of bricks and mortar!

Richard identified succinctly that towns and BIDs have to be managers of experience and be clear in all they do what the outcome expectation versus performance is. Aspiration vs reality! Understanding the total economy of a place is key – how many places across the UK do this as part of their plan? As with any good business, he suggested that at least 5% of budgets should be spent on independent and evidence-based research. Music to my ears as all too often plans are built around no data, flawed or inaccurate data. At a recent council presentation I gave I was told that their plan have been rejected due to the lack of an evidence base. I hope LDC and our partnerships with other data providers as well as universities, will go some way to solving this problem nationally, regionally, and locally. What gets measured gets done!

So there you have it: a very interesting and informative day which was reinforced when we were split into four teams to come up with a plan to convince funding of a BID in a town with high crime and antisocial behaviour records. The BID team I was in, team ABC (Action, Beautify & Communicate), was a collection of very well informed, enthusiastic and experienced individuals who delivered the winning pitch! As a data and technology guy, I learnt a great deal from them on the practicalities making a success of places and improving the livelihoods of people, so thank you team ABC. The quality and innovation I saw from these BID professionals gave me great hope. If we could replicate this across the country at a wider town level supported by a solid evidence base and expert organizational support as provided by British BIDs, then UK towns would have the opportunity to better face the challenges that many feel are drowning them.