 |
 |
 |
 |
 |
 |
 |
 |
Shopping Centers Today -> May 2004
 PRINT THIS STORY: |
  CHANGE TEXT SIZE: |
SELLING POINTS
Europe’s key malls embrace product sponsorship
BY SUSAN THORNE
 |
| Germany’s Centro, the Continent’s largest mall, has learned that shopping centers don’t have to leave all the business of selling to their tenants. |
 |
Centro and one other major European mall have adopted sponsorship in a big way. Indeed, some mall professionals now think they have a thing or two to teach their U.S. counterparts on the subject.
This fashion-anchored, 749,000-square-foot (70,000-square-meter) super-regional (the Continent’s largest mall) in Germany’s industrial Ruhr district has the panoply of long- and short-term relationships with corporate sponsors that would be the envy of many landlords. Chief among its sponsored facilities is the Coca-Cola Oasis, a circular food court area where the red-and-white Coke logo appears on everything from signage to cups and food trays. A video wall broadcasts sponsors’ (purchased) messages, and the Coca-Cola Stage provides an in-house venue for concerts, fashion shows and other promotional events. Having the exclusive rights to sell its products in most of Centro’s venues, Coke rings up 97 percent of all beverage sales in Centro, making this mall its biggest point of sale in Germany.
“I think there will be an enormous change in the direction of supplemental sources of income such as sponsorship once shopping centers understand the potential of this type of arrangement,” said Rainer Becker, general manager of PMC (Partner Marketing Cooperation). PMC is the Oberhausen-based specialized-sponsorship consulting firm that developed and managed Centro’s program. “In principle, the mind-set is already there for sponsorship alliances. We find that centers are looking for sources of income other than rents.”
Chocolate manufacturer Nestlé Schöller, another Centro sponsoring partner, has exclusive supplier rights for coffee and ice cream sales in the mall’s common areas and the naming rights to the family-oriented Nestlé Schöller Adventure Island in the Centro leisure park. Glue stick maker The Pritt Co., a subsidiary of the Düsseldorf-based Henkel Group, sponsors Pritt Kinderland, a child-care center. Two banks have supplier agreements to set up ATMs in the center; Düsseldorf-based ISIS, a private telecom that provides cordless Internet hookups, offers closed-circuit cell phones to parents whose children are in the child-care center, so they can keep in touch while they shop. Centro has also linked up with nontraditional sponsors, such as EVO, an Oberhausen-based regional power supplier that has an agreement to furnish the center with Christmas lighting.
Besides these long-standing agreements (they typically last three to 10 years), Centro enters into seasonal alliances, such as the Nokia snowboard festival in January, and shorter-term test-marketing agreements. There are also in-kind partnerships, through which companies provide their own products in lieu of payment, such as toy maker Lego’s December installation in the central court of the world’s biggest Christmas tree, built from Lego bricks.
Additional revenue is generated through advertising on illuminated boards and megaposters hung all over the mall and its parking lots, and in center magazines and coupon books.
To be sure, a diverse sponsor lineup like this challenges the wisdom of signing over a whole center to one sponsor, as has happened in the United States, says Becker.
“Nobody would commit the personality of the whole project when they can bargain for separate parts,” he said. “We can address different markets here with different sponsors here, such as small children and their parents at the Pritt Kinderland, or teen-agers in the Coca-Cola Oasis.”
Becker does not disclose the total revenue generated by Centro’s partnerships, but he’s quick to point out that sponsorship yields further returns that are not financial in character. For example, tenants at Centro benefit from the favorable electricity rates negotiated as part of the power company’s sponsorship contract.
“And all partnership activities have to add something to shoppers’ visits, making them more pleasant, like the Christmas decorations, or more convenient, like the closed-circuit cell phones provided by ISIS to parents while their children are at the Kinderland,” said Becker.
Interest in this type of collaboration is growing. Sponsorship took a giant step forward in November when Hamburg-based ECE Projektmanagement, Europe’s largest shopping center developer, signed an agreement with PMC for the development and management of corporate partnerships at ECE’s 66 malls in Germany. The deal was first struck in December 2001, but has been renegotiated and will move forward soon, Becker says. He plans to approach ECE’s portfolio with a diversified approach similar to the one at Centro, customizing sponsor partnerships to suit individual centers rather than applying a generic sponsorship package chainwide. Once this extensive corporate program is in place, it will have the potential to heighten awareness of sponsorship within Germany and beyond.
 |
| A glue stick manufacturer underwrites the Pritt Kinderland child-care center at Centro. It is just one of more than a half-dozen long-term sponsors at the center. |
Ford Motor Co. recently did a 20-week brand promotion aimed at five different market segments in turn; the “female”-themed portion, for instance, included customer makeovers and displays of car models favored by women.
A recent three-month sponsorship established the Toyota guest lounge, a relaxation venue for shoppers, serving Nestlé coffee. Visa, Bluewater’s preferred credit card, is included in marketing initiatives such as instant-win game cards, and there are frequent short-term promotions for different brands.
But the sponsorship “jewel in the crown,” according to Byron Lewis, Lend Lease’s national commercialization manager, is the Land Rover Adventure Zone, a 45-minute demo drive in a Land Rover vehicle over an obstacle course adjacent to Bluewater. Now in its third year, this ride has attracted 15,000 drivers, “and that’s 15,000 people buzzing with enthusiasm for our products,” said Bill Welch, marketing-programs manager at Land Rover U.K. Land Rover selected Bluewater because of its affluent demographic, and high-quality design and retail environment.
“That profile suits us, because we are a premium brand,” Welch said. Upmarket centers provide a good fit with Land Rover’s customer offer, he opined, “because it is in their very nature to support a lifestyle proposition. They are all about brands that excite and interest.” Moreover, Welch says, such centers are developing themselves into leisure destinations rather than just shopping venues, “which makes them great destinations for brand extension activities.”
Although Bluewater’s size makes it a particularly attractive marketing venue, Land Rover is interested in marketing at other shopping centers, Welch says. “Certainly, there is the potential to do similar promotions at other malls, and we are investigating a number of alternatives.”
The growth of sponsorship in Europe is also being abetted by at least one U.S. mall developer. When Arlington, Va.-based Mills Corp. opened the 1.2 million-square-foot Madrid Xanadú center near Madrid in the spring of 2003, a partnership arrangement with Coca-Cola was in place for vending rights and experiential promotional events. And Mills is investigating other partnership options. Xanadú, which has an area for skiing and other winter sports, is designed as a retail-entertainment leisure destination where visitors will do more than just shop, says Petra A. Maruca, Mills’ vice president of partnership marketing.
“When you have that mix available, it furthers the customer’s inclination to participate in sponsor-driven activities,” Maruca said. “We think this will be a very successful sponsor platform in the future, and we’ll have a lot more to report in six to eight months.”
Maruca identifies six merchandise categories or industries that are most likely to become involved in shopping-center-related sponsorship in Europe: automotive, beverages, consumer-packaged goods, finance, telecommunications and technology.
“A lot of U.S. credit cards are starting to make inroads into Europe, and we’ve been in discussions with a couple of companies about co-branding,” she said. Mills has not carried over its U.S. corporate partnerships to Xanadú Europe, but may enter into multisite sponsorship deals once it has developed other European malls. The company is exploring possible projects in Spain and Italy.
In the meantime, Maruca regards Europe as fertile ground for sponsor partnerships. “Brand marketers are looking to establish their brand marketing just as they do in the U.S., and they are beginning to recognize that nontraditional channels such as malls can deliver customer loyalty,” she said. “We anticipate that over time, sponsorship will be just as strong in Europe as it is here.”
 | Current Issue November 2008 |