This is not a reasearch paper, but an argument to convince retail-centre managers to attract a (stall) market to it. Please contact the author for comments or permission to print/publish at reynders@softhome.net.

1. Fear?

There are some stark differences between Australian markets including street markets and their derivatives, and those in Europe. The first difference is location. In Europe, a market is usually and for centuries part of the commercial centre of town; or at least part of one of the shopping centres. New markets planned also tend to be following this tradition. In Australia, retail markets tend to be out on a sports oval, a show ground, a vacant industrial site or a church yard or car park. The second difference concerns the day it is held in the week. Most Australian markets are Sunday markets. The trip to them is more a tourist outing than part of the weekly shopping pattern. Impulse buying is the norm. In Europe, the market is part of the weekly retail pattern and on a weekday. Markets in Australia tend to be removed from mainstream trading, both in location and day of the week, as if the two should not meet. In doing so they have become competing retail entities, rather than attracting additional customers to the established centres. Even though there are a few "old" markets in Australia, most markets are less than 25 years old, although some begin to have a hint of heritage, such as Paddy's Market, Sydney. The Australian situation seems based on a misplaced fear shop keepers and retail managers have of the phenomenon of temporary market stalls. There seems to be a mistaken belief that a temporary market takes trade from them.

2. Win-Win

Europeans discovered long ago that where shops and markets are trading in one location, they create a win-win situation. This can be understood if one would only stop to analyse the situation, both in theory and empirically. In Australia, the value of markets to any local economy is generally badly understood as documentation of their role is very sparse. There are other differences, as there are similarities. The focus here is on why the two retailing venues should dovetail as well as be planned to be located together.

3. An explanation is needed.

Australia does not have the same market tradition as Europe. Sometimes a market is presented as entertainment or just a charity focussed fund raising event. It comes down to opinions, rather than a rational explanation through analysis. If I would outline some of the factors that make a business centre draw additional customers, it can then be suggested how an adjoining market impacts on those factors. Briefly, a market as part of a centre represents an expansion of the centre for the day, in terms of size, variety, interest, social attraction and tourist value and therefore in the number of customers. It provides a different shopping experience from a set of shops. If a market that can attract thousands of customers on its own when located on an oval on the outskirts of town (thereby acting as a competing centre for the day), it would also attract its followers if it were part of a centre.

The additional visitors would discover and explore the shops of the centre as the regular shoppers would discover the market. It is a symbiotic position. But let's go step by step because there is more.

4. Predictive modelling

The total attraction of a business centre, as it results in large numbers of people going to it and dollars being spent there, can be dissected into individual factors of attraction. Regional economists, geographers and urban planners have noted over time that some business centres were more popular than others. There is a specialist field known as systems analysis, where the future impacts of development, growth etc. are analysed. Mathematical models, formulas, measuring information and predictive calculations are developed for particular circumstances, so one can for example, estimate the resulting attractiveness of a centre. I will not go into these models, but there is literature about them. However we will now hope to agree on some of the broad observations they are based on.

5. The factor distance

Suppose you are just out of milk and you need a loaf of bread in a hurry, and nothing else for the moment. Where do you go to get it? I suggest, you go to the closest shop, the neighbourhood shopping centre or the general store at the corner. They may charge a few cents more, but you would lose more in petrol and time, if you drive to the much larger town centre. We have just established that distance is a factor of attraction and that attraction decreases with distance.

6. Size does matter

Why would, by way of example, many citizens of Cooma regularly travel an extra 100 km to Tuggeranong Town Centre or somewhat further to Woden or Civic, to do some shopping? Few people living and working in the ACT shop regularly in Cooma. The Cooma business centre has most products needed by a family, there is a large Woolworths Supermarket and a whole street of shops and other services, and is within 2 or 3 kilometres of most of the population's homes. One of the answers is size, the attraction of sheer size, total square metres of floor space of the centre. So size can override closeness as a centre attraction factor. Tuggeranong Town Centre is several times bigger than all the shops of Cooma put together. Hence its atttraction reaches several times further; it has a larger "catchment" of customers. The size factor operates also when comparing the catchment of a neighbourhood shopping centre and of a Town Centre. However we can easily see that size is not the only difference between Tuggeranong Town Centre and Cooma's centre. We know that the greater centres have more shops, different shops, additional services, a greater range of products some in much bigger shops and there are often cheaper prices.
 
 

7. Other factors

Other than size and distance there are attraction-factors that one can easily agree on as being relevant for centres in a large urban town, even without examples being given. The choice and quality of products and variety of shops and outlets (including level of specialisation), availability and quality of parking and easy access, price levels, service qualities, centre management and advertising, the environmental and social qualities and the entertainment values of a centre are such factors.

The inclusion of a so called "anchor development", or outlet that by itself will attract more people than other shops, is another important factor for a centre. If the anchor attracts a customer, the other shops and their goods are then exposed to that customer who will know the way to it then or later. For example in a small centre a post office can be an anchor, because most people have to go to the post office from time to time. In large centres the "anchors" are the department stores or the larger supermarkets. All these factors combine in creating the image and total attraction of a centre, but not all those factors make an equal contribution to the attractiveness to potential customers. Parking, for example, is often far from ideal, even expensive. People are often prepared to bear the search for and cost of parking if the other attraction factors are great enough. However where there is choice between two otherwise equal centres better parking becomes an important factor.

For clarity I will point list these factors:

distance

size

choice

quality

variety

specialisation

parking availability

parking quality

access

price

service

management

advertising

environmental

social

entertainment

anchor development

On the other side of the equation, the numbers of people in the "catchment", income levels, expenditure patterns, etc. are important factors because we want to know: attractive to whom, what could they spend? The information required about people is for large groups, because the idiosyncracies of individuals and small groups are assumed to cancel each other out in these theories.

8. Impacts of markets

How does a market that is part of a commercial centre perform on these factors?

By definition it increases the size of the centre for the day and should therefore be able to attract customers from further away. It becomes part of the centre. The character of markets, with stall frontages of a few metres each with a different highly specialised range of products, is clearly one of great variety in a relatively small area and therefore additional variety and specialisation for the centre. The centre therefore offers a greater choice, for the day. Indeed there will be outlets and product types that the centre does not have on non-market days. Some of them extremely specialised, such as stall selling only buttons, thousands of different ones. A creative parking solution can always be found for the day. This is particularly needed where the car park is used for the market. This highlights the need for pro-active planning for markets.

The additional customers that have come because the market have also been exposed to the other outlets of the centre and are likely to use these too. In that sense, as far as the additional customers are concerned the market takes the role of an anchor development for the day.

Customers already coming to the centre have now additional reasons (the market) to keep coming back to the centre. This is referred to as a form of customer binding. The quality of stall products and even the stall display, can be highly influenced by market management. They can invite certain kinds of merchandise and bar others. An 'all-goods-are-welcome-market' soon finds itself flogging 'down market' goods, even dodgy ones. If that is the intention, fine, as a range of cheap items can also attract additional people. One town planner has claimed, that a St Vincent de Paul store attracts a whole set of new opportunity seekers to a centre, who as a result also do their grocery shopping there. However, a market can invite quality products only if that is the aim.

9. The price is right.

The same applies to price levels. A second hand market will include cheaply priced items. A craft market with product selection criteria, may offer some unique and very expensive goods. How each of these will add to the attractiveness of the centre depends on what kind of centre it is.

10. The people things: Social and serving.

Customer contact, serving and other social issues are quite complicated and I will not deal with them exhaustively. The helpful uniformed shop assistent, with a formal "are you being served?", "Can I help you?" can be quite threatening and may frighten some of the mulling customers away. Some people want to be ignored, others want to be talked to. At markets, the public somehow feels that there is neither barrier nor obligation in a chat with the marketeer. They know that the stallholder is likely to be expert about the product offered and are often keen to ask. The marketeer learns to be comfortable with unthreatening small talk and are generally good sales people in a sociable way.

Nobody sells anything in a supermarket, rarely is the talent present to do so; people just grab the things they have come for. Marketeers can express their own character and style, rather than that of store management. They are the boss of the business and can respond immediately to questions on possible deals, discounts, bargaining on volume purchases etc. No store manager has to be consulted first to deal with such questions. The social environment of a centre therefore can be quite relaxed and have attractive social attributes, meeting place functions influenced by the adjoining market. This is in addition to markets being known as interesting and accidental meeting places and many of the marketeers, as well as the visitors, are interesting characters. If you want to meet interesting people, go to the market. It's part of the attraction. And I did not even mention buskers and live bands that some market managers assign to enrich the already great entertainment value.

11. Competition.

Competition, as economists teach us, gives rise to better productivity, to price stabilisation, to greater variety in product definition and better service. All three factors would increase the attraction of a centre. From the point of view of the consumer, the one that ultimately counts, competition is therefore a positive aspect of commerce.

Markets mean additional competition into the centre for the day, not for the rest of the week. There is only competition if there is a substitution effect between products or if they offer exactly the same products offered in the shops. Some markets have barred certain products that are sold in adjoining shops, as a matter of rule. e.g. The chemist sells sunglasses, so there shall be no stall with sunglasses. This is trying to avoid competition, a key mechanism of commerce. This may be qustionable practice. The shop, it must be remembered competes in turn with the marketeer in all sorts of ways. Permanency, guarantees, after sales service etc. and, the shop should be able to place a stall at the market too, or offer market day specials to attract the additional visitor. However centre management and market management should be able to influence the product mix to achieve optimum variety.

There is an unsubstantiated myth that marketeers compete the easy way and on the cheap.

Though rates vary, an undercover market stall space at a well managed market in the ACT may cost roughly one dollar per square metre (of bare space, no power, or anything else) per market hour. Applying that rate to a 100sq metre shop, the shop would pay close to $5000 per week for brick and mortar commercial real estate, with utilities, all week storage and trading, security, and all the legal certainties laid down in a lease. The Canberra Show, only partly a market, charges $100 per sq metre for its smaller stalls for three days. One can see that the marketeer can pay a relatively high rate for space, and without the certainty that the place is always available. Some markets have an entrance fee, possibly discouraging some customers from entering. The load-up/set-up/sell/pack-up/un-load effort for the day by the marketeer can be tough. Marketeers must be tough people if they are to make a living. Any suggestion that the playing field is stacked against the shopkeeper is therefore likely to be untested rhetoric.

12. Management and advertising.

Like a shopping centre, a market may be managed well or may not. Management may have frequent advertising campaigns and extensive operational rules, or just collect the stall and entrance fees and put up the fence. The advertising of a market adjoining a shopping centre, is likely to benefit that centre, if only because its location is mentioned. If centre management and market management consult, or indeed are the same body, coordinated management and advertising can result.

The Lismore Shopping Square (owned by Lend Lease), is a shopping mall on a large concrete platform above flood level, with parking underneath. In the 'eighties, centre management decided to have a Sunday carboot market in part of the car park, because on Sundays the centre was closed anyway. The market was a huge success and brought people from near and far, many of them not customers of the Square. Management decided that they would open the centre on Sundays as well, to capitilise on the flow of additional visitors. It worked; first slowly as not all shop operators wanted to open on the Sunday; but soon Sundays were buzzing with business; downstairs at the markets, upstairs in the shops. Market and shops economically supported each other in jointly creating the increased attraction of the centre. It is still a huge success.

13. Conclusions

A shopping centre of any size can benefit from the operation of a well managed market immediately adjoining it, because the market can positively influence many of the factors of a centre's attractiveness. The market causes additional people to find their way to the centre who return on non-market days. It is a win-win situation for all concerned, except perhaps for that other similar sized centre a few kilometres away that our shopping centre has always competed with. You see, it has no market.

© Peter Reynders 12-01-01

Town planner and marketeer