Introducing FountainPlace, considered a Cincinnati landmark and at 50 stories, the tallest building in downtown Cincinnati. Located opposite the city's foremost urban park, Fountain Square, the mixed-use development will occupy one million square feet of retail, hotel and office space.
The development is impressive by anyone's standards. One-hundred specialty shops and restaurants will provide the retail component of FountainPlace. The 225,000 square foot, three-level retail galleria surrounding a glass enclosed rotunda will be brightened with streams of natural light and refreshing water features. The entire retail galleria and rotunda will support a fourth floor food, entertainment, health club and cinema complex.
An 11-story atrium and glass elevators will be the focal points of the 264unit hotel occupying levels five through 17. Above this, 30 stories of prime office space will rise to a public observatory on the uppermost level.
This leisure and business wonderland is a joint venture of JMB/Federated Realty, acting as managing developer, and Emery Realty/NORO.
Based in Cincinnati and with regional offices in Los Angeles, Tampa and Dallas, JMB/Federated is among the country's leading companies in real estate development and acquisitions with 138 regional malls and community centers, 153 office and industrial buildings, 153 multi-family residential properties and eight luxury hotels. Many landmark retail developments are credited to the JMB family of development companies such as nationally-known showplaces like Water Tower Place in Chicago, Copley Place in Boston and Town Center at Boca Raton.
Attaining such status isn't achieved by real estate agents who "kick the dirt" in order to make decisions on properties. The sites for all of JMB/ Federated Realty's developments are chosen on the basis of highly sophisticated research techniques.
Through JMB/Federated Market Research Co., analyses of consumer behavior, trade area dynamics and the competitive environment help the development to respond to the changing dynamics of retailing and to maintain existing centers as vibrant and vital marketplaces within their communities.
Three-fold purpose
The role of market research at JMB/ Federated Market Research has three purposes, explains Rohan Andrew, president of this division of JMB/Federated Realty.
"The first is consumer research, which comprises a basic data 'building block' function. The second is location research which helps us identify and evaluate new development opportunities. And the third is strategic planning which involves long-range probes of emerging market demographics and identifying within these market areas future opportunities. Each phase of research builds upon the other, adding strength to the integrity of the overall program."
While many retail developers engage in these research functions, what sets JMB/Federated apart is its application of a wide variety of marketing tools. One of these tools is VISION, a second-generation customer targeting and lifestyle segmentation system developed by National Decision Systems (NDS), Encinitas, Cal., a target marketing and marketing information company.
VISION, says Richard Brumfield, manager of consumer research, "is a key consumer discriminator when demographics alone look the same." Another tool is Polk Vehicle Origin studies which help define retail trade areas and consumer travel distances to shopping centers. Last, statistical models, which show the surplus/deficit of retail space in metro areas, facilitate future development planning.
Carrie Goodman, public relations manager at NDS, praises the company's sophisticated use of multiple resources.
"All in all, JMB/Federated is a perfect example of the necessity to integrate different databases; such as NDS' and their own proprietary information, with systems such as NDS' Infomark and Lotus software, to complete the most thorough market research analysis."
Andrew, Brumfield and Susan Olson, manager of market feasibility analysis, describe how these research tools are integrated into the company's research functions.
According to Brumfield, consumer research is conducted to "help us define the trading area of our centers from which 70-80% of our customers are drawn."
To define the trading area, the firm conducts customer exit surveys every other year at its shopping malls. "We do these to monitor trading area changes in terms of both geography and shopper behavior. This knowledge permits us to adopt marketing strategies which intensify our business activity," explains Brumfield.
Demographic information is obtained in these surveys and questions about where the customers shop, what they did in the center that day, as well as "customized questions" on potential renovation or expansion, and the customers' attitudes toward the center, media and special events are also addressed in the survey.
Once the trading area is defined, telephone surveys are conducted among shoppers and non-shoppers in the trading area to determine the center's share of market and to help JMB/Federated identify strategic marketing programs that will yield an even greater share of the market in a particular trade area.
Respondents are asked where they shop, how often they shop at these places, and queried with customized "image questions" which address issues of center positioning. Through these, JMB/Federated learns what the customers feel about a whole variety of attributes relating to its shopping centers, such as its level of quality in small store presentation, its convenience in terms of access, and even the helpfulness of sales personnel. Participants are also asked what television and radio stations they watch or listen to so that future advertising can be closely matched to the target customer.
"Image questions help in the positioning of our centers and knowing customers' media habits helps us decide which media to use for advertising purposes," explains Brumfield.
Assess competition
Overall, both of these surveys help the company profile its customers, assess the competition and find out what people like and dislike about the centers.
"These studies are a kind of report card," describes Brumfield, "to show us how we've progressed from one study to the next, and they provide a way for us to assess changes occurring in the marketplace, its competition profile and the economy. The surveys help us to monitor those changes and make plans for the future."
Before either of these surveys are conducted, JBM/Federated uses NDS' Infomark and VISION systems to get an idea of the kinds of people residing in a trade area, such as their gender, age, housing, income and educational level.
After the surveys are conducted, the trade area is "mapped out" via NDS' microcomputer mapping system to find out which areas a center is penetrating more highly, and to estimate the number of people in the trade area and their potential expenditures.
"Using VISION after doing the surveys helps us classify households more intelligently. It provides us with more detailed and richer data to better identify trade areas and to help us tailor our advertising. It also allows us to compare our customers to the broader market and assists us in deciding whether we need to make some changes in our center positioning."
Attracting tenants
The data generated from these surveys is invaluable to JMB/Federated not only in terms of advertising and positioning of the mall, but in leasing to current and prospective shopping center tenants.
"The NDS Infomark system helps us assess the dimensions of trading areas, provides census tract data, zip codes, income characteristics and the growth projected to take place within those areas," says Brumfield.
Another tool which allows JMB/ Federated Market Research to describe the trading areas of competitive centers is Polk Vehicle Origin studies. The company does this by doing license plate surveys at these centers.
"It's our way of analyzing the competition," notes Brumfield. "This information is then fed into the NDS system and it figures out what the demographics are of the competitive market."
For location research, JMB/Federated Market Research works in conjunction with JMB Realty in Chicago to decide on properties for future acquisition or development of major regional shopping centers and to evaluate the overall feasibility of these projects," says Andrew.
From the earliest projects, the company has worked with the top names in retailing. Department stores such as Bloomingdale's, Saks Fifth Avenue, Burdines, Foley's, Lord & Taylor, Mervyn's, Jordan Marsh, Dillard's and Sears form the basis of the company's project strength.
Market feasibility work identifies the scale, demographics and expenditure potential for areas that would be served by a shopping center site, explains Olson. Along with data from the Census Bureau, various planning agencies and National Planning Data Corp., JMB/Federated Market Research uses NDS to look at the potential of the market served by a proposed site. A lot of mapping is done as well, says Olson, to provide graphic illustration of population distribution and population growth trends in the area which are then related to the prospective market. Demographic information, such as income levels and age groups, is also mapped out.
"Once we look at income, we can develop expenditure reports and projections. These reports provide the basic data for feasibility analysis of a shopping mall in a market," explains Olson.
Strategic or long-range planning involves the use of statistical models which aid the company in understanding the relationship between population and retail space and in identifying "overstored and understored" markets. Notes Andrew, "Analysis of emerging and changing demographics within market areas pinpoints future opportunities for center development in the period to the year 2000 and beyond."