Enhancing the experience: A growing demand

  • Design
  • November 22, 2017
  • Courtney Devereux
Enhancing the experience: A growing demand

Some commentators think food and integrated hospitality offerings will save brick and mortar retail from obsolescence in the age of ecommerce. But does catering to the consumer’s every need result in sales, or are shoppers moving on without making a purchase? In the Enhancing the experience series Courtney Devereux looks into why these two different sectors are working together. 

The last few years have been tough times for retailers both in New Zealand and overseas, the global boom of the ‘experience economy’ has seen both Kiwis and international tourists driving strong growth in New Zealand’s hospitality industry.

Stats NZ data indicates that between 2011 and 2016, the number of businesses listed under ‘Accommodation and Food Services’ grew from 18,300 to 20,532. Employee count also increased from 129,200 in 2011 to 149,000 (19,800 more employees) in that five-year period.

It is important to acknowledge that the increase of retail could be less than what is reported as the hospitality part of it could be raising the average in instances where they are integrated, such as the total value of a mall. Regardless, the ability to increase sales is likely due to the fact that SMEs in the retail and hospitality industry are one of the most connected when it comes to engagement.

J’aime Les Macarons is a Christchurch-based business selling French-style sweet treats. It recently opened a pop-up inside Seletti Concept Store in Newmarket, which sells high-end home décor and apparel.

Although J’aime Les Macarons has a committed fan base down in Christchurch, the pop-up closed within a few months. According to a spokesperson for J’aime Les Macarons, the closure was due to low foot traffic within the area.

Less-than-adequate sales is a reality for some retailers, and the example of J’aime Les Macarons’ experience shows that just because a retailer adds a hospitality aspect into its model doesn’t always mean it is going to work. 

Made to order

A study by Antony Ede and Allister Hitchcock for market researcher TRA, titled Great experiences keep customers coming back, analysed data on hundreds of eateries across New Zealand to find out whether great customer experience really pays. In the study, data on what consumers said about the eateries’ service on rating website TripAdvisor was compared to how many consumers came back according to electronic transaction data from Paymark.

Researchers found that 34 percent of customers returned when the quality of the experience was five stars and the price of the meal was on the lower spectrum. This is compared with the lowest return rate of 24 percent, where price was on the low spectrum but quality was also scored low.

The study’s average percentage for a customer return rate was around 30 percent. This shows that for the most part, consumers are willing to return and pay more for meals if the quality of the food and the experience remains higher on the scale.

This result can be translated into most hospitality and retail: consumers will be willing to return if the quality of the experience remains high – regardless of price.

Original recipe

Auckland garden store chain Kings Plant Barn has included a branded hospitality offering - the Kings Plant Barn Café - in all its locations since its opening in 1992.

Jon Kirman, marketing manager for Kings Plant Barn, says the café is a destination itself but its location greatly relies on the consumers already in-store wanting to visit the café.

“Gardening is a leisure activity, and a visit to a good café at the same time as buying your gardening supplies or getting your gardening advice is sure to add to the whole experience.

“By having a café on site, it helps to turn a traditional retail space into a destination, an afternoon outing with the family. It adds a good level of enjoyment to the shopping experience.”

Kirman says that for the gardening centres, as for most other mixed-use spaces, neither one would operate to its fullest capabilities without the other.

“Both business work really well together and most customers enjoy shopping at both when they come to visit our site.”

Without releasing formal financial reports, Kirman says that the profit the café draws in is enough to cover all running costs. They are set up as individual businesses and are not subsidised by the garden centres.

Although the cafes are such a staple of the centres, like all retailer models, Kirman says if the business model of the café stopped producing a profit it would need to be reconsidered to hold it as a permanent structure.

“Although I don’t see why they would ever stop making a profit. Like any café, provided that it is well-run and managed there’s no reason why it shouldn’t be a thriving business.”

Supersize it

Kiwi Property has implemented some of Auckland’s biggest expansions of refreshment and dining areas in its retail precincts over the last two years. The Grove dining lane, set to open December this year alongside Sylvia Park Shopping Centre is a $9.1 million project.

The Grove dining lane is planned to cater to the growing demand for high-quality dining experiences, while also increasing foot traffic to the surrounding retail areas.

Chris Gudgeon, Kiwi Property chief executive, says The Grove is a long-term vision to create a world-class town centre – one which focuses on the whole experience rather than just the food offered.

“It is designed to integrate seamlessly with an upgrade and refresh of the existing dining lane, and will set a new standard for suburban dining in Auckland.”

Although $9 million is no small investment, Sylvia Park itself is valued at around $724 million.

Another part of Kiwi Property’s focus on hospitality expansion is LynnMall’s ‘The Brickworks’ dining lane. Its completion in late 2015 saw the new hotspot open alongside an expanded retail mix. The expansion, including the retail sector, capped at $39 million, while LynnMall’s value upon completion was $269 million, as reported by Kiwi Property’s 2016 annual report.

Both these spaces are examples of retail and hospitality working together to maximise profit, as each draw in select crowds which can transfer onto the other. With retail, all the customer’s needs must be met for the best experience, and this includes food, drink and some level of entertainment they cannot get elsewhere. 

​ ​

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.


A challenger appears: Homegrown furniture giant Nido to compete with Ikea

  • News
  • January 21, 2019
  • The Register team
A challenger appears: Homegrown furniture giant Nido to compete with Ikea

Within a few weeks of confirmation that Ikea will come to New Zealand comes the announcement that New Zealand’s largest-ever retailer is set to open in Auckland. This new mega-retailer is nothing to do with Ikea, however: it’s a homegrown furniture and homewares concept store called Nido.

Read more

Getting drastic about plastic

Government plans to phase out single-use plastic bags have been heartily embraced by leaders in the grocery sector, but there are plenty of other ways ...


H&M extends footprint into Auckland

  • News
  • January 17, 2019
H&M extends footprint into Auckland

H&M has continued to strengthen its portfolio of stores in New Zealand. The Swedish fashion chain is now brining a third store to the Auckland region, to be located in Botany Town Centre.

Read more

Social scoreboard

Zavy and The Register have worked together to create a scoreboard that compares how the top 25 traditional media advertising spenders in New Zealand have performed on social media over the past 30 days, updated in real time.

Concept to closet
Business coverage of New Zealand Fashion Week.
Town centres
A positive retail environment over the past 12 ...
Amazon Arrival
Keeping up with all things Amazon as it ...
The Retail Yearbook 2017
As we battle our way through the busiest ...
Hospitality enhancing retail
Some think food and integrated hospitality offerings will ...
The future is bright
We spoke with four retailers in their twenties ...
Spotlight on signage
At first glance, the humble in-store sign might ...
Red Awards 2016
The Red Awards for retail interior design celebrate ...
Auckland Unitary Plan
Auckland is changing. The Unitary Plan will decide ...
How to open a store
Sarah Dunn considers what it would take to ...
All things to all people
Kiwi retailers share their omnichannel strategies.
Rising stars
Retail's top young achievers.
Delivering on your promises
The sale isn't over until your item is ...
Retail in heartland New Zealand
Retailers keep the regions pumping, but how strong ...
Women in retail help one another. We spoke ...
The changing face of retail
Shifting demographics are creating big changes in New ...
The retail yearbook
With the help of experts in the retail ...
Retail rogues
We put the spotlight on staff training. Jai ...
Here come the giants
Topshop has arrived in Auckland’s CBD, David Jones ...
Window shopping: A spotlight on social media
Sarah Dunn and Elly Strang look at how ...
From retail to e-tail
Ecommerce has become part of the way mainstream ...
Loyalty in the digital age
How are retailers maintaining loyalty? Sarah Dunn, Elly ...
The Innovators | In partnership with Spark Business
Technology is rapidly changing the retail industry as ...
Sponsored content

Why unified commerce changes everything

eStar chief technology officer, Matt Neale discusses why true unified commerce changes everything


Jack Ma to step down from Alibaba position

  • Who's Where
  • January 15, 2019
Jack Ma to step down from Alibaba position

Jack Ma, executive chairman of shopping platform Alibaba has announced plans to step down September of this year.

Read more

Bottoms up: Absolut Vodka takes a stance on sustainability

  • News
  • January 14, 2019
  • Courtney Devereux
Bottoms up: Absolut Vodka takes a stance on sustainability

A new responsible cocktail era is on the cards as Absolut Vodka introduces its new sustainability focused campaign, The Green Hustle.

Read more
Next page
Results for
About us.

The Register provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2015 Tangible Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

The Register

Content marketing/advertising? Email or call 022 639 3004

View Media Kit