Are bicyclists attractive to retail?

We are ususally told local businesses wither and die, when cars can not park curb side. Photo: Lars Barfred

By Lars Barfred

It is always frustrating to see local shops waging a war against a new bike pathpredicting their own eminent demise, once a few parking spaces are converted.
Mostly because they could not aim better for their own foot, its such misunderstood message. As a bicyclist I know how important local trade is to the city environment, the less local trade, the more cars, the less life in the streets, its that simple.
Whats killing local trade is not bike paths, it’s the shopping malls designed for cars, hiding the stores away in gigantic concrete mausoleums, often on the outskirts of town, close to the freeway.
My position is that bicyclists are the most important ally of the local stores, and here I will provide three steps for local trade associations and municipalities, to make the trade, restaurants and traffic infrastructure work better for all.
In a couple of projects, consulting firm Incentive on behalf of The City of Copenhagen and Hoe360 consulting and the Danish Cyclist Federation, has tried to show cyclists are of as attractive customers as motorists, yet they fail, as they do not look at retail, from a retailers perspective, but from a shopper perspective.
Retailing in its core about shoppers and sales. Drive traffic to your store and motivate each of the customers to buy more, preferably of the goods the retailers makes the highest gross margin on.
To attract shoppers, retailers concentrate on location of the store and pull in customers by advertising great bargains, depending on the customer to do the rest of their shopping at a normal margin, once the shopper is in the store.
Retail, and specifically grocery shopping, has increased promotion pressure and rebating astronomically over the last 30 years, the largest advertising media category in Denmark is estimated to be the weekly and biweekly advertising catalogs. Increased promotion pressure reduces the average margins. 
To drive sale per shopper, retailers layout the store to force the shopper thru the entire store, passing offers of non essential goods such as snacks, cakes, soft drinks, non-food on their way to the diary and meat products in the back of the store.
Bicyclists principally never make the trip to the shopping mall or mega-markets on the outskirts of the city, and neither do they drive to the Swedish or German border shops to buy beer, soft drinks, candy and tobacco.
Bicyclists are distance averse, shopping closer to home, less prone to bargain hunt across town, and are as such both more loyal, and more importantly more profitable, as less of their shopping basket is rebated. Making the retailer less dependent on a costly high promotion pressure.
Accordingly, this is the first place to do your analysis, if you want to identify attractiveness of bicyclists, what is the gross margin of the average basket by modality.
Bicyclists are not poor people, but prioritize their wealth in a different way, on average Danes use 30% of their income on transport, cars being the massive bulk, a car cost all together around USD 1.000 a month to own and operate incl. insurance, depriciation and interest on car-loan, very few mass transit users pay more than a USD 200 a month and few bicyclists pay more than USD 20,- a month.
In other words, the non-car owner has much more left of his pay check every month, many choose to use this to live in a more expensive house or apartment, but of course many also use the additional means to shop more, travel more, eat out and so on.
In fact a study made for the largest Danish car sharing service shows that logically car share members mostly bike and use mass transit, they are not members because they can´t afford a car, they are a really highly educated segment of the population, 8% of members had a PhD!
Designing the street for maximum profits
We often hear bicyclists buy less when they shop. Yes they have no reason to stock up, and less cargo space on the bike. Is this bad for the retailer, no its not. For one thing bicyclists shop much more often, measured by revenue per person, bicyclists may still fuel a higher sales.
Second, revenue is less important than gross margin, as a retailer you don´t care as much about how much you sold, as how much you profited. Retailers look at the gross margin per product, category, shopping basket and so on.
Third, a key marketing strategy of retailers is discussed earlier, to expose non-essential goods to shoppers, to increase purchase of impulse. If a retailer could choose between customers visiting the store once a week and 3 times a week, the retailer will choose the latter, even though the customer may buy exactly the same amount and brand of milk, meat, toilet paper etc. Knowing the retailer will now be able to trick impulse purchases 3 times, rather than one.
Second you want to know about shopping frequency, loyalty and what is the maximum radius of which the shopper considers to locate stores in.
The retailer is also averse to cost, parking is relatively cheap to offer for the mega market on the outskirts of the city, whereas it may be ten times as expensive for the average supermarket in the city center.
If the super market is new, they are forced to build expensive parking basements (USD 65.000 each) and these parking basements are used very little.
Instead the supermarket prefer the city to provide this part of their customer service for free, curb side. Anyone can understand how it is in the interest of the retailer to have the city pay for attractive parking, rather than being forced themselves, to invest in unattractive parking.
However this should not be interpreted as retailers need for motorist customers, it is an expression of retailers sub-optimizing, and externalizing their cost as much as possible.
Further there is broad understanding that even if you don’t provide space for bike parking, bicyclists will manage anyway, while car drivers will not, respecting the parking regulations and/or fearing receiving a ticket. Retailers will accordingly fight for more free local curb side parking, thinking they optimize traffic flow at no cost to their business.
Now retailers have no transport-traffic understanding, naturally, it is not part of their education, nor should it be. To a retailer, traffic is the amount of people who enters trough their front door, and how those people travel through theirs store.
So we know retailers need high amount of people arriving at their store, and seek to find a location, whereas many people as possible pass the store with the expressed opportunity of stopping and entering the store. If we can increase this traffic of people outside the store, the value of the store location increases.
What kind of traffic can easily stop and shop? What modality has a high conversion rate, from passing by to stopping and entering the store?
Well as we see in most places pedestrians are king! Pedestrians travel at a pace, where the retailer can draw them into the store by decorating their storefront windows attractively, advertising bargains, even letting the pedestrian pass through the store, by displaying goods on the sidewalk, such as clothes, fruits, flowers… For this reason pedestrian streets are associated with the most coveted store space in the city. Shopping malls are likewise attractive, because even people who arrived by car, are forced out of the car and must walk through the pedestrian shopping streets to arrive at the store of choice/need.
 
Second, bicyclists can easily stop and park. Even though 15 km/h is to fast to view store fronts, bicyclists can easily drop speed to pedestrian speed and even stop, without thinking of a need to park, the bicyclist can hold his bike by hand, while studying the store front, and most likely park the bike within 20 meters.
Mass transit will be less likely to stop on impulse, but nevertheless, passengers easily jump off a frequent route, shop and jump back on the bus or light rail.
Car traffic has none of this flexibility and car drivers will tend to add some extra miles and favor easy curb side or at least terrain level parking. Services inner city stores simply can´t have in fair amounts.
Car traffic are basically the least likely traffic to be converted from street traffic to store traffic.
Given the limited space in a given street, how can we optimize the amount of people who can travel by the store? Is it possible to increase the capacity of the limited width of the street, without bringing down the buildings across the street? 
Contrary to common wisdom, car traffic has a very low person transport capacity, dwarfed by pedestrian, bicycle and mass transit capacity (see graphic below).
 
 
 
Pedestrian and bicyclist are most likely to be converted to shoppers, mass transit has the most capacity, car traffic looses out on both parameters being the least attractive traffic outside the store
Researching local conversion rates for passing traffic by modality, and knowing what capacity properties of the respective traffic modalities, enables you to estimate, how to design the street layout for maximum profit for retailers, restaurants and other local trade, as well as for maximizing urban mobility.
The street environment
A store location will primarily be attractive for one or more of three reasons,
1. The population and workplace density of the immediate surroundings.
2. Large traffic arteries passing by.
3. Attractiveness of the street environment.
Population and workplace density is the most long term parameters to change. There is a common misunderstanding that a “car hostile” environment drives away businesses, there is no empiric evidence. Along with an ever increasing urbanity, congestion rises and business and government offices increases along the same pace. In Copenhagen the industrial belt along the Ring3 motorway, we find the highest vacancy rates for offices and industry/business property, close to all motorways and with plenty of free parking, yet people detest working in the area, and there is no demand for business space.
Large arteries of traffic are similar difficult to change, but most big cities has started to modernize the 6-lane through fares often converting a major through fare to parks, which are in high demand in the ever more dense metropolises.
As we saw before car lanes has the lowest productivity, which is a great opportunity, because cities can convert car lanes to light rail, save 2 thirds of the space or more, and still increase mobility, using the saved space for parks, wide sidewalks with sidewalk restaurants and cafés, and of course bike lanes.

 

Small inexpensive initiatives softens the street environment, making the locations attractive, Vesterbro, Copenhagen. Photo: Lars Barfred
The attractiveness of the street environment is often an added bonus of modernising the great arteries, the street becomes less polluted, less noise, trees, flowers and shops and restaurants which are more open and integrated into the street environment, attracts much more customers. This creates a much more liveable and friendly urban space, which the malls can never compete with. The attractive streets increase the value of the store location.
The latest case of change a major road in Copenhagen, Nørrebrogade is still being debated. The change in priority of transport modality, which favoured pedestrians, bikes and busses is by itself a success, but recent criticism has sited the lack of trees and flowers to create the attractive welcoming visual impression. One could add, that stores along the modernized wide sidewalks has been slow to take advantage of the new opportunities to open the store front into the street. 
Supermarkets and many convenience stores favour blinding storefronts with dull logos or Photostats, not something which is known to neither draw in the crowds or increasing the value of the street environment. In stead store owners should brighten its part of the street. Set up waste bins to reduce garbage around the store front, make attractive store front displays, which opens wide. if there is a short order or bakery, have an open counter for people in the street etc. Permanent or mobile flower beds in front, would too, be a friendly signal to the surroundings, showing you care to be part of the local community.
 
A store front which generously opens to the street, and enriches the local community every day. Photo: Lars Barfred
 
Curb side parking is actually the last thing you want in front of your store, as parked cars, especially white vans and trucks, will hide the store completely front from traffic passing on the opposite side of the street.
Finally, do you know your customer?
Target the shoppers, you can attract locally. Not the average of Denmark, 95% of the population will never come, anyway, no matter what you do. Know your local customer and embrace the potential your store location gives you, cater to their needs, show them you are interested in providing the value they demand.
In Copenhagen petrol station Statoil has begun to cater to bicyclists the same way, they cater to cars, they take their value proposition, strengths and capabilities, and modify them to the local audience. In reality this translates into a bike repair stand, bike washing facilities and carrying an assortment of run-flat kits, lights, tubes etc. apart from gas the petrol stations are really convenience stores, by targeting bicyclists they become more relevant to bicyclists, and compete with 7-11 in a way most convenience stores and small supermarkets can´t.
In the same way the Bakery may sell their bread in bags, convenient to hang on the handle bars, the book stores may advertise DIY and coffee table bike books or simply adopt a set of titles which attract active life style segment.
Stores which are not bike stores may still offer complementary services, such as a compressor pump, to pump op those tires, nice and hard. Hypermarket grocery chain Føtex did so on Nørrebrogade, along with actually having a broad every day low price bike accessory assortment and even kids, bikes, city bikes. Their competitor Coop Kvickly even sells cargo bikes.
A supermarket may also take into account a bicyclist tend to be more environmentally concerned, why not let them reuse manufacturers cardboard boxes for transporting home the groceries, make a series of good looking reusable backs subtly branded and communicating environmental messages, which handles well on a bike. The store may even offer locker boxes for those arriving on really expensive bikes, and expensive solution, yet still a tenth of the cost of one parking space or less!
 
Third, use syndicated research data to identify macro patterns, how your local customers stand out. use this knowledge in your dialogue with your customers on a daily basis, to understand whats important and get better ideas about what will make your store relevant and interesting to your local customer base.
 

And remember first things first: Remove those stupid signs along your store front saying “bikes are removed, no responsibility accepted” -Why would you want to be hostile to the largest customer segment in the city? Bikes in front of the store does not shield the store like a car, the threat is not legal, you are not allowed to move the bike, and bikes are in fact meant to be parked on the sidewalk along the façade of the buildings, along as they do not block entrances. Your goods and services are rarely unique and essential, and bicyclists can  choose another store in the neighbourhood or order on the internet in stead, if they become unsympathetic to your store!
 
Amsterdam is a great case of a city with a thriving local trade, stores are dominated by locally owned shops, not international chains and brand stores, which they also have, but less. Amsterdam is also the capital in the world that prioritized active transportation and mass transit in the street environment the most. Photo: Lars Barfred
 

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