Street Dots- Myth Busting Placemaking 2.0

Posted by StreetDots on 12th November 2019 -

As reported last month vendors using the StreetDots platform bucked the trend of flat to negative revenue growth and reported average year-on-year growth in August of 22%. The east of London faired particular well, up 26% - driven by the perfect storm of increasing office relocations (particularly tech from central) and a shortfall of desired amenities. This positive news prompted us to dig deeper and question some of the assumptions surrounding placemaking in today’s environment.

Bigger is best, build it and they will come? London alone has over thirty indoor food halls/markets, a trend that shows no signs of slowing with several high profile openings over the last quarter and a steady stream due to open their doors in 2020. However are these bastions of smashed avocado facing the same shelf-life as their beloved ingredient. Figures from across the Atlantic already show the explosion of these ridged behemoths is starting to reverse, as over-saturation and the novelty factor quickly kick in. 

By comparison our latest annual research indicates that smaller, more bespoke clusters of vendors generate on average 36% more revenue. Crucially this phenomenon is not restricted to the plates and glasses of F&B. With little or no questioning placemaking in the 21st century has found itself held aloft on the twin pillars of personalisation and experiential (P&E).

Even at this relatively early stage are the much-vaulted concepts of P&E dead in the water? Paradoxically to what the above data would suggest our assertion is absolutely not. Crucial and indeed critical to the effectiveness of placemaking is the environment in which P&E exist.

By contrast smaller clusters offer far great impact for individual brands, especially if they can be located close to their key target audience. With millennials accounting for the majority of office workers by 2020 and the resulting blurring between the living and working environments it is arrogant to assume consumers must come to you, rather than you to them.

Layer on top of this an over saturation of similar environments and the payoff for brands and landlords who embrace a smaller more targeted location becomes obvious. Especially if these environments themselves morph and change to reflect the multiple uses consumers demand of them in the digital era.

In environments where your main consumer group is habitual and your product is specialised the evidence is overwhelmingly in favour of rotation. This scenario is particularly pertinent to office developments and commuter hubs but also semi-rural high streets and community open spaces.

Regardless of geographical location across London our data strongly indicates mobile businesses that trade for a single day per week in a specific location perform significantly better than those doing multiple days. The more specialised the offering and the more consumers class it as a ‘want’ rather than a ‘need’ the greater the differential. 

Businesses go mobile for multiple reasons, the clamour to shoehorn these brands into fixed locations negates many of the positives without offering sufficient benefits. Coupled with over-saturation the concept of condensing demand down to shorter time periods and replicating this across multiple locations is core to successful placemaking for landlords, and consistent revenue for businesses.

The stats surrounding why small businesses fail are well known but poorly understood. The largest single reason given for failure 

(42%) is that there is perceived to be no market need. Whilst an additional 13% highlight market timing for their demise. Such large numbers spike our curiosity and deserve closure analysis.

Undeniably there are products or services that come to market driven by entrepreneurial blindness; a narrow and misguided view that ignores the environment in which they exist and overestimates the need they are seeking to satisfy. However, far more new businesses simply don’t match the right offer to the right place at the right time. In essence there are multiple environments in which a business can exist - key is matching to the right one.

Every independent business on the StreetDots platform is assessed against 43 unique criteria and locations are similarly categorised. Over the course of the last 12 months we have discovered that vendors trading on locations ‘market-matched’ for them earn 71% more than those that have a lower correlation.

Placemaking as a term has been around since the 1960s but as a concept it dates back to when early man sat at the camp fire eating and reciting stories. So why the modern obsession? Fundamentally placemaking relies on creating a connection. The more diverse our environments become the harder it is to create and maintain these connections to the benefit of all.

Stripping out the emotions and pre-existing assumptions that surround placemaking and focusing solely on the data we can debunk myths and misconceptions and strengthen these vital connections. If environments are fluid and dynamic and we can no-longer seek to impose ridged inflexible ways of working that stifle mobility.

Placemaking 2.0 flips the current model 180 degrees and puts the individual at its core. It builds rotating, flexible, mobile and hyperlocal connections. It embraces the "I" and puts in places ways of working that allow individuals to interact for the specific time they inhabit that space, be this virtual or physical.