CREJ - Retail Properties Quarterly - September 2015
Every retail facility is looking for ways to attract customers and keep them shopping longer, whether it is offering free Wi-Fi, children’s play areas, water features, background music or valet parking. One of the most effective and proven ways to increase dwell time and average dollars spent is to install electric vehicle charging stations. The data is compelling. Kohl’s found that EV drivers spend about 20 minutes more in store than non-EV drivers, while another major retailer found EV drivers spend more than three times longer in store. With statistics like these, the return on investment is higher and easier to calculate than many other amenities. However, before adding EV charging stations, do some homework regarding service providers, installation and maintenance. Don’t be suckered into an offer from a service provider that leaves your store or shopping center with little power or control. Often service providers will ask to lease space to install charging stations at no cost. On the surface it seems like a no-brainer to let someone else pay for and manage a charging station on your property. The offer is compelling – no upfront investment in hardware, no maintenance fees and no day-to-day management of a new technology. But, dig a little deeper and it quickly is revealed that this offer is too good to be true. As it turns out, this scheme can become a disincentive. While the station might be installed at no cost to the property owner, someone has to pay for it, and in this model it is the electric car drivers. Because third-party-owned stations don’t benefit from the additional shopping revenue, they recover their costs via a big markup on electricity, sometimes as much as five times the cost. As a result, the price the driver pays is high relative to other charging options. Unfortunately, once third-party operators start charging drivers high prices to plug in, your shopping center loses all of the benefits of having it in the first place. Shoppers no longer linger and spend more, but instead become clock-watchers, eager to leave as soon as they have enough power to do so. Even worse, most of the contracts with third-party providers have long-term exclusivity clauses, which means you as the property owner lose all control and cannot take any action on your own if their solution is failing. In fact, one property recently told a national customer of ours that they were prohibited from putting in their own charging station at their own cost due to an exclusivity clause with a third-party provider, regardless of the fact that the other station would have been too far of a walk to use conveniently. At another retailer, a third-party station has been out of order for nine months with no repair in sight. Then there is the issue of image. Overpriced charging fees paint your store or shopping center as being greedy and unreasonable, since the driver may not realize it is really a third-party station owner setting the price. For the same reason your store wouldn’t let a vendor charge $10 per session for Wi-Fi or $15 per child for the play area. If you did, why would you bother having those amenities in the first place? If station management is the concern driving you to consider third-party ownership, a better strategy is to find a charging station reseller that offers station management and maintenance services for a reasonable annual fee. This way you retain control and receive the benefits of having a station, while outsourcing the day-today oversight. While third-party ownership of EV charging stations on your site may seem like a great deal at first, the fact is that the host site rarely receives the promised benefit because the goals of attracting shoppers while extracting substantial charging revenue from them at the same time are incompatible. In the end, a third-party EV station can end up being detrimental to those shoppers who are electric car drivers, and an unfortunate exercise in “green-washing” for your property.