Changing traffic, changing business

Consumer behaviour and the retail landscape have significantly changed as a result of the pandemic. With government restrictions and work from home recommendations, New Zealanders have spent more time at or near home than ever before. 

This has meant that there has been a shift in the types of precincts that New Zealanders are frequenting. There has been the strengthening of the concept of ‘the local’, with consumers turning towards neighbourhood retail precincts as a result of greater levels of working from home. A similar pattern has been seen in Australia. 

‘The uncertainty created as a result of the pandemic meant that consumers were more selective with their spend, and what brands they were frequenting – turning to those local brands and franchises that they know and trust,’ says Vanessa Wilmot from Geotech Information Services. 

‘Consumers transitioned to local precincts as a result of being at home more often, and to support local and small businesses. Many local precincts also offer convenient and external access for consumers, who were looking to minimise their touchpoints and movements during the height of the pandemic.’ 

These trends are expected to continue, at least in the short term, with many organisations adopting hybrid models of working. The shifts have meant that precincts reliant predominantly on more white-collar, commercial populations (such as CBD environments) were more negatively impacted due to the pandemic, and still have a way to go for their recovery. That's meant that, as we report in the cover story of our latest issue, if your business relies on location then finding the right site is more important than ever.

For example, looking at a busy area of the Auckland CBD – the top end of Queen Street – we are seeing a slower recovery of pedestrian activity since the pandemic. 

During the height of the pandemic, in 2020 and 2021 the level of foot traffic in this section of the CBD fell to around only a third of pre-pandemic levels when compared to the same time period in 2019. While pedestrian activity in the Auckland CBD is starting to increase in 2022, there is still a long way to go, with activity still at less than half that of pre-pandemic levels.

Looking at Melbourne CBD, drops in pedestrian activity during the height of the pandemic were even more severe due to the long and extensive lockdowns that the city endured. In 2020 and 2021, the levels of pedestrian activity in the Collins Street / Swanston Street section of the Melbourne CBD were at only a fraction of that of pre-pandemic levels. 

But things are improving. During 2022, pedestrian activity in this section of the CBD has been gradually getting closer to pre-pandemic levels, as Melbournians have started to come back to the CBD – in particular, for dining and entertainment experiences. 

Unfortunately this has not yet translated to significantly increased occupancy rates, with a significant proportion of CBD office workers continuing to work from home at least part of the time. According to a recent Property Council of Australia Survey, the occupancy rates in the Melbourne CBD fell to around 38 percent in July 2022, down from 49 percent in June 2022. 

Where are the current hot spots – and when?

So if consumers are coming into the CBDs, where are they going if they are not coming in for work? Geotech Mobile Device data can be used to profile and track consumer movements and retail habits, and has been used to assist franchises in answering this question.

In New Zealand, the busiest sections within the Auckland CBD are currently between Queen Street and Hobson Street, which contain significant entertainment, dining and retail activity. Another hot spot is towards the top end of Queen Street. 

‘Currently, these sections are consistently the busiest throughout different day parts, including during lunch time as well as dinner and evening trade,’ says Vanessa. ‘However, we do sometimes see differences on where the hot spots are across different day parts, which is important for franchises to know depending on whether their offer has more day or night time appeal’.

Auckland CBD 2022: Activity Across All Day Parts (Geotech Mobile Device Data)

 

An example of this is the Wellington CBD. Overall, the Wellington CBD is currently the busiest in the precincts between Lambton Quay and Jervois Quay, where there are significant entertainment options and attractions such as the Cable Car and galleries, as well as dining. However, this is largely driven by day time and lunch time activity.

‘Activity in this section of the Wellington CBD drops off significantly during dinner time and evening trade,’ says Vanessa, ‘while the entertainment and dining sections around Courtenay Place become much busier in comparison’.

Wellington CBD 2022: Activity Across All Day Parts (Geotech Mobile Device Data)

 

The Christchurch CBD is also currently the busiest in the sections of the CBD that have significant entertainment, dining and retail activity on either side of Colombo Street, between Hereford and Tuam Street.

Christchurch CBD 2022: Activity Across All Day Parts (Geotech Mobile Device Data)

 

Maximising potential

‘While the New Zealand CBDs have a way to go in their recovery, they still offer a unique experience for consumers,’ Vanessa points out. ‘The busiest sections of the CBDs are currently where there is significant entertainment, dining and retail activity. The key will be whether significant proportions of workers will continue to stay at home, or will come back into the CBD more regularly than they currently are’.

‘At Geotech, we have been working with our clients and franchises to put up-to-date numbers on the trends and assist them in understanding changing consumer and purchasing behaviours, to help them with their network planning strategies, and what this might mean for their brand moving forward. Some of the main trends we are seeing are:

Local: there has been a shift of consumers frequenting more local retail precincts and neighbourhood centres. This is anticipated to stay for at least the short term, with a degree of working from home or hybrid models of working expected to continue;

Loyalty: many consumers have become more brand loyal, to brands and franchises that they know and trust, and in support of local businesses;

Caution: a proportion of consumers have become more cautious in their behaviours, purposely continuing to limit their touchpoints. These consumers have either turned more towards online and delivery channels, or have favoured bricks and mortar sites that are easy to access and have fewer touchpoints then others;

Convenience: consumers are now demanding convenience with their purchasing behaviours. With trends towards online and delivery here to stay, any bricks and mortar business will need to ensure it offers convenience and a customer experience over and above that of other channels.

‘While no-one has the answers for what the future might hold, these trends need to be taken on board while we are all adjusting to what the “new normal” might look like,’ says Vanessa.  ‘Part of this is helping franchises understand what this might mean for their business moving forward, and where the best locations will be to help franchisees maximise their potential returns.’

 

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