Dwell time as a predictor of real estate revenue
Intro: make use of time, let not advantage slip
When Shakespeare coined this famous romantic plea, he might have not had an idea how practical his appeal could be in the field of commerce. The amount of time one spends in a location, so-called dwell time is way more important than the number of people passing this location.
The dwell time curve is the trade-off between people’s time in the location, measured by the number of hours spent by active users of the location and the actual number of people there.
As our calculation shows, the more time people spend in a location the more commercially successful this location can be. Just thousands of passing by citizens at a road intersection may not generate enough demand for the nearby retail outlets. On the contrary, a few dwellers spending long hours could contribute to the revenue of local shops and services better than those who just pass.
The most attractive dwell interval, as we found out, stretches from one to three hours, which are normally associated with recreational activity, shopping, dining, education, and the like. Residential compounds where people spend more than 8 hours a day may not be that attractive for the retailers as any residence is more about private time, not public activity.
Therefore, the amount of active population in the residential areas, those who are on the streets, in the shops, restaurants, and on the move is not high enough to support public dwell time, producing demand for business diversity.
This is why urban planning professionals may want to be closely looking at the relationship between their planning concepts and the functional composition of an area that either attracts people to stay longer or fails people’s attention.
Despite the fact that large modern cities are highly diversified, only certain locations within their urban milieu become real points of attraction. This is why the micro-geography of the dwell time cohorts becomes essential both for urban planners and urban businesses.
A way to analyze people’s demand for locations is to estimate how long people stay there. It is not the volume of passing by traffic flow that determines the importance of a place, it is about how many people dwell here and for how long.
Exploring millions of locations across the globe, we found a strong relationship between the length of stay in a location and the type of people’s consumer activity. We formed 4 dwell-time cohorts:
- On the Move (0–30 min);
- Out and About (30–60 min);
- Work and Leisure (60–180 min);
- Staying Put (300+ min).
On the Move cohort highlights transit flows and short errands trips. Out and About activity is more associated with lunch, household shopping, or visiting a doctor. Work and Leisure is likely about business meetings, going to the movies, dinner, or thorough shopping. A working day at the office, or just being at home can be attributed to a Staying Put dwell cohort.
In our previous dwell time study (CoMotion NEWS exclusive: Dwell-Time Data Insights for COVID-19 Recovery in US Cities) in order to estimate for the retail outlets “distance to recovery” up to pre-COVID-19 revenue level, we examined the distribution of dwell time cohorts across the United States, by the grid of 50*50 meters units on a weekly basis. We also used dwell time information to make projections of the impact of people’s obedience to the lockdown regimes on the COVID-19 virus spread across the United States.
This study is focused on one big metropolis, the city of Moscow, one of the largest urban areas in the world with a population of about 15M people. This time around our focus was specifically on business clusters and shopping malls. Below are the most interesting findings.
Cohorts: tell me will you stay, or will you run away
In the analysis, we used anonymized human mobility data provided by one of the national telecom operators. The data was aggregated by a regular grid 250x250 meters for March 2020, the last month before the 3-month long lockdown was mandated by the City of Moscow. The data shows a % distribution of the dwell time cohorts across Moscow space.
On the Move is the most common dwell cohort, the majority of people spend less than half an hour in every location
On the Move represents transit traffic flows. Concentrations of this dwell cohort highlight metro (underground) stations, transport hubs, and highways such as the Third Transport Ring Highway (marked by a black circle). There are also two enlarged segments (see below) marked by dash line rectangular shapes, providing a more granular view.
However, On the Move dwell time cohort is not limited to transit only. High concentrations are also found in non-metro locations — at local clusters of FMCG stores and pharmacies.
Out and About. 30 to 60 min, cafes and shopping streets
Presumably, this type of dwell time is typical for grocery and household shopping, short lunch, or coffee breaks. We identified two groups of properties to see how long people usually stay there:
- Local commercial clusters — grocery and hardware stores, pharmacies, consumer services (as well as beauty salons and clothing/footwear stores);
- Cafes and restaurants, including those located in or near business centers.
Local commercial centers — shopping streets with commercial diversity clusters, are characterized by two cohorts of dwell time: On the Move and Out and About. Indeed, a person rarely spends more than 30 min in a grocery store or pharmacy, but for longer lists of household purchases, these clusters provide a significant part of the weekly shopping which may take up to an hour.
We expected to see a very specific distribution of Out and About dwell time cohort related to cafe and restaurant visits — identifying lunch places, where people spend up to an hour, and classy dinner restaurants. Local shopping streets are points of attraction where you face the everyday life of a neighborhood. In these areas Out and About dwell time cohort prevails over the transit, so that may have a good impact on local growth, with the prospective for setting up new businesses — retail, cafes, etc.
Work and Leisure. 1 to 3 hours in restaurants, malls, and business centers
Most of the shopping malls fall into the visiting pattern from 30 to 180 minutes, where two groups are clearly distinguished: community shopping centers and malls of city-wide significance. The former are usually located within a maximum 20 min walk from residential buildings, often near metro stations; the latter tend to be located either outside the city limits, or along major highways, or at transport interchanges.
People visiting community shopping centers (as well as shopping streets) usually dwell from 30 min to 1 hour there, the dwell pattern for city-wide malls is 1 to 3 hours as a trip to a large mall takes time and is more likely to involve some solid shopping.
Below are two examples — the 1st map fragment shows the distribution of dwell time for a large mall on the highway (Moscow Ring Road), the 2nd is a community shopping center in a local neighborhood.
Staying Put. Offices and residential areas.
Long stays are typical for 70+% of business centers
Most business centers fall into 2 cohorts of dwell time — 1 to 3 hours and 5+ hours. The first cohort (1 to 3 hours) obviously prevails especially in the areas where employees go out for lunch breaks and meetings. The modest representation of the second category (5+ hours) is likely related to remote work arrangements that some companies have already introduced by the time this study was carried out. In this context, the core of Moscow (see the map above), which normally concentrates the lion's share of the office activity looks almost empty. The outskirts of Moscow on the contrary show some representation of a 5+hours cohort, that can be explained by a different type of employment, mostly related to basic services such as car repair, or industrial sites where remote work option either is not possible or limited.
Staying Put dwell time is more typical for home activities (evenings, nights, weekends) and most often is found in residential areas outside the city center.
Takeaways: we do not know who we are unless we know where we are
By connecting places with the activity of their visitors, it is possible to see spatial differences in people’s behavior across the urban space.
So, transport hubs and metro stations are marked with On the Move dwell time cohort, while Staying Put is typical for residential areas. The dominance of a single type of activity usually describes mono-functional locations, which leads to decay. Being planned in Soviet times, Moscow remains a notorious example of specialized mono-functional areas, be it dormitory residential communities, industrial compounds, or transportation hubs.
All these three area types do not leave a chance for the productive dwell time cohorts, as they are about either privacy, work, or transit. Lack of functional diversity almost killed these areas at the time of the COVID-19 lockdown.
For example, some of Moscow's transport hubs lost almost all their audiences when travelers to work disappeared from them. In pre-COVID-19 lockdown time, those hubs provided purely technical transportation service and no hosting for commercial and hospitality functions that would not be entirely related to transit.
If those functions did exist and worked for the regular urban community then the transport hubs could have continued generation of revenue. This is why transformation into shopping, business and hospitality centers, “anchoring” visitors from all over the city, not just passengers, by creating diverse functional zones and comfortable public spaces become one of the most prominent global trends for transit areas and transportation hubs.
The most productive dwell time cohorts — Out and About and Work and Leisure — are associated with the activity in shopping malls and street retail, with commercial density and diversity clusters. Mixed-use areas are more likely to be characterized by mixed dwell time cohorts. Multi-functionality often becomes a synonym for well-developed and high-profile development projects.
The spatial juxtaposition of the main points of interest is another problem in Moscow as housing and business clusters are often distant one from the other, which causes overruns and extra mileage. Increasing the role of rental housing could be a solution. However, as for now, more than 80% of Moscow's housing stock is privatized and therefore “frozen”, hindering the ability of the employees to settle near their employers.
The Moscow example shows that transformation of “transit” and other low-performing areas into the “productive” ones requires an extensive reconceptualization of the urban planning approach, and calls for brand new metrics of people’s urban mobility such as dwell-time. On one hand, dwell-time data could easily detect and define non-productive areas in the city, but on another hand, a type of area (transit, residential, work) could immediately suggest to developers and planners what realistic expectations they may consider.
Prepared by Habidatum in collaboration with Polina Koroleva as a part of dwell-time research study
