International City Marketing Congress (CMDC)04.28/29.2010 Moscow

Lovro Mandac, Chairman of the Board of Directors, GALERIA Kaufhof GmbH

“City and city marketing, regional reputation of attractive cities.”Securing the loyality and support of the local community

GALERIA KaufhofWelcome to Moscow

Kaufhof profile today

Kaufhof in figures Markets: Germany, Belgium Located in city centers / shopping malls Locations:

126 branches* in more than80 German towns and cities15 branches in 12 Belgian towns and cities*incl. Sportarena

Turnover 2009 (net sales): 3.5 billion € Sales area: 1.5 million m² Visitors / customers: approx. 2 million per day Employees: 22,200

(2009; full time equivalent)

GALERIA Kaufhof GmbH

01The situation in the city centers

City center retailing yesterday and today

The move to the city center

The early years: The first department stores(The start of the 20th century)

Department stores used aggressive marketing tactics to attract customers from the countryside into the city center for the first time

The new “cathedrals to consumption” were utterly unique

CITY CENTER RETAILING YESTERDAY AND TODAY

CITY CENTER RETAILING YESTERDAY AND TODAY

From the mid 1980s:

“The urban revival”

Towns and cities become centers for trade and hubs for communication and innovation

People move back from the suburbs to live in the city center

Large retailers return and establish food outlets and shopping centers

Source: Bernd Heimbüchel (2007): Erlebnis Stadt.

The return to the city center

The move to the city center

Today: The department store plays an important role in city centers

The department store acts as an initiator of various activities aimed at vitalising the city center

Its ability to attract shoppers into the city center is significant

CITY CENTER RETAILING YESTERDAY AND TODAY

Current city center trendExplosive rise of the shopping mall

Today’s favored location: the town center

Total area of approx. 13.5 million m² 01.01.2010 total of 428 shopping malls 2010 at least 9 malls planned

The move to the city centerCITY CENTER RETAILING YESTERDAY AND TODAY

Source: www.rheinparkcenter-neuss.de, Rheinische Post 10/23/2010

Beyond the town center: Artificial shopping environments

Current trend “against” the town center“Artificial shopping environments” FOCs and purpose-built “retail villages”?

The concept of a simulated urban environment:

Professional, targeted marketing strategy successfully promotes shopping tourism

“Leisure park atmosphere” based on cleanliness and straightforward layout

Well-organised services (convenient parking, childcare, ATMs, maps)

Competitive advantage: Luxury brands at discount prices

Source: WÜS 13 August 2008; Photos: www.wertheimvillage,com, www.panoramio.com

CITY CENTER RETAILING YESTERDAY AND TODAY

Problem areas: City center retailers come under pressure from competitors

Without increase in purchasing power, retail forms grow at others’ expense

CITY CENTER RETAILING YESTERDAY AND TODAY

02We need to work together

Cities and retailers – make contact and act jointly Successful strategies and partnerships between cities and retailers

Leading by example

Development of the new Cologne city center network (since 2008)Joint conception, planning and implementation of all measures aimed at strengthening the position of the city center

WE NEED TO WORK TOGETHER

Leading by example

Nationwide support program

“Operation Midtown” – Largest city competition:

Idea behind the action: Annual competition intended to enhance the

appeal of city centers (since 1999) Public-Private-Partnership – city projects and

city marketing projects

Participation in 2009: Applications from 122 cities / communities in

five federal states

Organizing Partners 2010:Relevant federal state ministeriesGALERIA Kaufhof GmbH, Multi Development Germany GmbH

Other cooperation partners (example North Rhine-Westphalia):

Städtetag NRW, EHV NRW, Mc Donald‘s, Handelsjournal, STRÖER Deutsche Städte Medien GmbH,

Source: Imorde, Projekt- und Kulturberatung GmbH

WE NEED TO WORK TOGETHER

Leading by example

Organigram “Operation Midtown”

WE NEED TO WORK TOGETHER

Leading by example

Inspiring and exchanging ideas through nationwide and international communication and informationurbanicom e.V. – Platform for city and trade

urbanicom unites the strengths of everyone involved:

Since 1966 international association of leading European city planners, architects, property owners and business people aimed at forward looking urban development

Resolute commitment at grass roots level right down to the smallest retail unit and citizen interest group

WE NEED TO WORK TOGETHER

Leading by example

Inspiring and exchanging ideas through nationwide and international communication and informationurbanicom e.V. – speaking for the city

The work of urbanicom: urbanicom discusses questions that affect both

the city and retailers urbanicom believes in strengthening urban centers urbanicom works to preserve multifunctionality in towns

and cities – home, work, life urbanicom offers a framework for annual seminars

and events e.g. “urbanicom vor Ort”

Source: Urbanicom, Eberhard Gebauer

WE NEED TO WORK TOGETHER

03Case studies and voices from the cities

Measures aimed at cementing customer loyalty in the city centerHow to create and exploit synergies

Center of attraction - the city center CASE STUDIES AND VOICES FROM THE CITIES

Networking to increase efficiency and effectivenessIndependent network unites privatecommercial interests in Cologne withCity-Marketing Köln

City-Marketing Köln brings together previouslygo-it-alone die-hards in a single, effective team:

Consistent management and coordination of activities by City-Marketing Köln

Joint development of ideas and concepts Implementation in three operative areas:

City Commerce, City Image, City Quality Development of a balanced member structure as a

private commercial initiative

Leading by exampleWE NEED TO WORK TOGETHER

Leading by example

Enduring events that draw visitors from far beyond the local areaThe “biggest fashion show in the world”: Krefeld

“Our fashion show perfectly showcases the diversityand effectiveness of retailers in Krefeld – our visitors have been coming for years from all over Germany.”Jörg Pastoors, Managing Director GALERIA Kaufhof Krefeld

Mega-City-Event for the past 18 years with Sunday opening Draws visitors from all over Germany, 2009 approx. 500,000 visitors Huge media coverage, even in national press

CASE STUDIES AND VOICES FROM THE CITIES

Leading by example

The “biggest fashion show in the world”: Krefeld

CASE STUDIES AND VOICES FROM THE CITIES

Leading by example

Enduring events which have influenced urbandevelopmentWindow dressing competition on a worldwide scale

“Hagen has become THE capital of window dressing. The event has brought the city and retailers even closer together.”Christina Göttert, Business Development Hagen

Successful events aimed at countering the increasing homogenisation of towns and cities as well as the retail sector

Exhibition stand at the world’s biggest industry trade fair Euroshop (2008)

CASE STUDIES AND VOICES FROM THE CITIES

Leading by example

Seasonal, attractive eventsThe city is a beach – footfall throughout the day until midnight

“Our visitors feel like they are on holiday, the optimalmix of consumption and relaxation.”Frank Tüting, Sales Director GALERIA Kaufhof GmbH

Extraordinary use of “ordinary” buildings outside peak times or when vacant (e.g. car park floors or event venues)

Top media presence over 2 months (ARD, ZDF, local media)

Picture: City beach on the rooftops of Düsseldorf

CASE STUDIES AND VOICES FROM THE CITIES

Leading by example

Increasing the number of foreign visitorsExpanding shopping tourism: Targeted offers and joint ventures

“Creative joint ventures and innovative marketingconcepts are the real secret to boosting sales.” Martina Baumgärtner, Business development association for the district of Viersen

Successful and innovative events: New tourism projects such as “Cool Breaks”

and “Fly and buy” are large-scale marketing events designed to attract European short-break tourists.

CASE STUDIES AND VOICES FROM THE CITIES

04The challenges today and tomorrow

We need a clear commitment to the city centerTowns and cities, government, property owners and commerce… all must play their part

Leading by example

Investment in problem districtsBIDS and ISGs – how to add value to a district

Without the commitment of the private sector, the problems facing many cities cannot be solved:

Joint financing through private and public investments Modernization and renovation of entire city districts Ensuring cleanliness and safety Financing for seasonal decorations, Christmas lights etc.

Quelle: www.bid-neuerwall.de, www.graf-adolf-strasse.de, www.ihk-hessen.de, www.hamburg.de/bid-projekte/

WE NEED TO WORK TOGETHER

Towns and cities need visions and dreams ...THE CHALLENGES TODAY AND TOMORROW

… and people who will join forces to make them realityTHE CHALLENGES TODAY AND TOMORROW

The focus is on a common goal: Raising the appeal of the city center!

The path to success …

... a joint future based on communication: Active mutual support Closer relationship between associations, clubs and

institutions City managers act as a point of contact for all parties

involved

Beyond this:

We need to harness the creativity andintelligence of each and every citizen!

THE CHALLENGES TODAY AND TOMORROW

More than just the sum of its parts …WE NEED TO WORK TOGETHER

Pursuing a common goal togetherTRADE, GASTRONOMY AND CITY – CHALLENGES FOR ALL INVOLVED

Our commitment to the city center

It is time to act: If everyone does the best they can,

then the winner will be the city center!