Are Malls dying in India? Not yet and not soon!
PaciĆc Mall, a part of PaciĆc India – one of India’s reputed business groups with presence in real estate, hospitality and education sectors – is positioned as a premium, shopping, entertainment and leisure destination. The mall is home to more than 130 n
Pacific Mall, is positioned as a premium, shopping, entertainment and leisure destination.
We caught up with Abhishek Bansal, Executive Director of Pacific India Group, to discuss the changing Indian retail landscape and the key recent developments that are adding to the transformation. He says that to combat the e-commerce onslaught, the physical retailers and malls must adapt, evolve and stay fresh – and it would not be wise to write off malls so soon.
GST has been welcomed by (almost) all sections of the Indian business fraternity. Share your overview of GST and its impact on the country’s retail sector.
Shopping malls will witness great benefits with GST. There is no doubt that a unified GST will not only help streamline different types of taxes but will incorporate different tax legislations under one cohesive regime across India. Like any other sector, the new tax system introduced by GST is all set to change the dynamics of the Indian retail sector including shopping malls. Value and volume will both become key drivers for the retail segment as brands will be providing more product lines and the latest in trends at shorter intervals. Moreover, fast fashion will be the way forward. Thus, the impact of GST seems to be advantageous for shopping mall owners from taxation as well as operations standpoint.
What is your observation about the customer payments scenario—is digital transaction increasingly becoming a preferred mode of payment? Any key trend(s) to watch out for?
The retail world is undergoing a fast-paced revolution. Technological advancement and digital innovations have ushered new life into retail spaces by integrating physical and digital experiences. The pace of this revolution is remarkable with no sign of slowing down, provided all stakeholders embrace this change simultaneously. With shopping centres taking steps to merge offline experiences with online ones, the future of retail is becoming increasingly exciting for both retailers and consumers. Social Media has its own role to play in this retail world and its importance will continue to grow. Today, the first part of decision making for the new age consumer
is initiated before he enters the store. The physical store is an extension and culmination of his primary online journey. He carries the retail world within his mobile, with the entire shopping and leisure universe in his pocket!
India has crossed the one billion mark for mobile smart phone users. So, one can but expect an increase in digital mode of payments in malls, especially among the younger crowd – between 18-16 years. A survey of internet users conducted on behalf of the firm by Kantar TNS in December 2016 found that 40 percent of respondents had used a credit card to complete a digital shopping transaction. Digital payments through mobile wallets and mobile banking apps have increased as the numbers above denote. This is a hassle free transaction mechanism for all users who have a bank account.
The Indian retail scenario is transforming drastically on all counts: faster pace, consumer demands and habits, brand availability, product assortments and offerings, technology-driven selling and buying process, intensified competition, and regulatory environment. How can physical retailers keep up with the changing retail landscape and find room for further growth?
With increased competition from e-commerce, there is now a pressing need for physical retailers to evolve. To flourish in this dynamic scenario and beat competition, the physical outlets will have to provide a more specialized shopping experience. At Pacific Mall, we think ahead, try to give the customer what they need from their “mall experience” even before they ask for it. We try to keep a step ahead of the current trends. Experiential shopping is the key to stay afloat and ahead in the game in this state of flux.
At Pacific Mall, we use Cloud based applications to empower teams to help them deliver higher productivity and efficiency. This includes services like Real time CSI & RSI Mgmt. System, Fit-out Mgmt. application, Automated Daily Sales Report (ADSR), Leasing & SOH Inventory Mgmt., Retailer Analytics System and customer analytics, Task & Snag Mgmt. application to name a few. Latest in technology and operational systems are one of the biggest enablers for us and we have deployed some of the latest innovative programs in technology such as the completely automated system for logging and tracking of complaints, use of advanced software for Mall management and operations for tracking, audits and data management, centralized one point system to track consumption of all utilities throughout the mall.
We have invested in state of the art security management service and surveillance systems and an International Mall Management company (PPZ) to help us maintain these high standards at mall. This involves continuous renovations and up-gradation of customer service areas to enhance customer experience, introduction of C1 (Customer First program) program to continuously train and groom on roll and out sourced staff to establish high standards in customer interaction and experience.
Other concepts are also doing the rounds in the mall space. Everybody is trying out new things to do expand business and increase footfall. One of the emerging concepts is that of ‘Pop-up-Stores’ which entails temporary use of physical space to create a long term, lasting impression with potential customers. Environment friendly malls using sunlight and open spaces will also evolve.
In the US, many major retailers and malls have closed down or are shrinking their physical presence. Do you think Indian brick-and-mortar retailers and mall operators need to worry as of now? How do they need to rethink, reinvent themselves to survive and thrive in the long run?
If retail is dying why is money pouring into malls? The retail segment in the real estate sector attracted an investment of over $700 million in 2016, which can rise by 20 percent in 2017, according to property consultant CBRE. Over 40 major international brands have entered the country over the past two years, CBRE said in February. Amid the flux in India’s retailing business, rentals for tenants in malls haven’t fallen.
If you look around you will find, most of today’s top-performing and hi- footfall gaining shopping malls are mixed-use spaces with significant social entertainment potential that provide exclusive appeal along with certain intensity and novelty in shopping experience. Malls are changing their positioning and converting to a neighbourhood centre to cater to a particular catchment. Some are also getting in luxury brands to differentiate themselves.
With malls, what counts most is the perception of customers. To meet this challenge, stores may have to be re-imagined to create richer shopping experiences that reflect their customers’ needs and shopping preferences. For a mall to achieve scalable success and to stay a step ahead of other players, today, you have to be adroit in understanding, forecasting and adapting to changing consumer needs and expectation. It’s a race to keep up with the constantly evolving ecosystem and stay current on new trends and deliver a new, customized and refreshing experience to people. The scope of growth for the physical outlets lies in this adaptation, this zeal to evolve and stay fresh.
Things are changing fast, evolving fast to attract footfalls and to stay in business. It would not be wise to write off malls so soon.
At PaciĆc Mall, we think ahead, try to give the customer what they need from their “mall experience” even before they ask for it. We try to keep a step ahead of the current trends.