Shop­ping Cen­tre Turn­around Sto­ries of The Year

A large chunk of un­der­per­form­ing malls are tak­ing a leaf out of the book of new malls, ren­o­vat­ing them­selves to give them a new look and feel, up­grad­ing their in­fra­struc­ture and ten­ant mix to boost foot­falls and thus, gen­er­ate higher rev­enues…

Shopping Center News - - CONTENTS -

With the ad­vent of on­line shop­ping and the de­cline of large depart­ment stores, many tra­di­tional malls across the coun­try face ex­tinc­tion. At the same time, as towns and re­gions grap­ple with how to spark long-term eco­nomic growth, new think­ing about what a mall is may be just what is needed.

Ac­cord­ing to a 2017 study by JLL’s retail arm, some­times suc­cess is all about mar­ketabil­ity. For ex­am­ple, in the US, more than 94 per­cent of mall own­ers are ditch­ing their old digs for new com­mon ar­eas, a fresh coat of paint, new stores and/or a name change. A lit­tle fresh­en­ing goes a long way along.

Malls are re­fresh­ing brand­ing strate­gies to im­prove and add to their ap­peal, through com­mon area im­prove­ments like mod­ern­iz­ing out­dated features like new lob­bies, com­fort­able seat­ing, free WiFi, re­light­ing walk­ways, im­proved way ͤnd­ing, fresh paint and more win­dows for nat­u­ral light.

The study goes on to say that mall own­ers are fo­cus­ing on a ten­ant mix that will en­tice shop­pers, and more malls are speciͤ­cally tar­get­ing re­tail­ers to im­prove ten­ant mixes, hom­ing in on ap­parel, lux­ury, and ͤt­ness re­tail­ers. In most coun­tries, ap­parel re­tail­ers that en­tice Mil­len­nial con­sumers – ex­am­ple fast fash­ion re­tail­ers H&M and Zara – are leas­ing top in­line spa­ces.

The In­dian Sce­nario

Ac­cord­ing to Anarock Prop­erty Con­sul­tants, In­dia has more than 600 small and big op­er­a­tional shop­ping cen­ters pri­mar­ily spread across in and around metropoli­tan cities, Tier I and II mar­kets. Pushed by devel­op­ers, In­dian retail com­pa­nies with mul­ti­ple for­mats to­gether with re­gional chains and lo­cal re­tail­ers have suc­cess­fully pen­e­trated some 50 new cities in the past few years. They are dra­mat­i­cally chang­ing the retail sce­nario and bring­ing the ‘Mall’ cul­ture closer to shop­pers of over 100 cities of In­dia.

However, de­spite all the talk about a boom­ing con­sumer mar­ket, the mall busi­ness in In­dia has been tough and own­ers are now in­creas­ingly try­ing to ͤnd unique points of ap­peal. Most

mall devel­op­ers agree that build­ing a mall is far eas­ier than run­ning it and mak­ing sure it keeps at­tract­ing foot­falls.

Ac­cord­ing to es­ti­mates by Anarock Prop­erty Con­sul­tants, the year 2017 wit­nessed largescale clo­sures, and nearly 5 mil­lion sq. ft of retail space was wiped out, lead­ing to the phe­nom­e­non of ‘dead’ malls.

With sev­eral malls bit­ing the dust al­ready due to non­per­for­mance – ei­ther be­cause of a bad brand mix, wrong lo­ca­tion, a catch­ment area that doesn’t want what the mall is of­fer­ing – devel­op­ers are look­ing to­wards res­ur­rec­tion and turn­around pos­si­bil­i­ties to bring a dead mall back to life.

Suc­cess­ful shop­ping cen­tres in­fuse life into an oth­er­wise mun­dane city life. These are the fam­ily en­ter­tain­ment cen­tres where cus­tomers spend qual­ity time with and buy goods and ser­vices, come to be en­ter­tained and sam­ple great food. These are places where retail busi­nesses thrive, where mall pro­mot­ers see qual­ity re­turns for their in­vest­ments, and all these boost the GDP of the re­gion.

On the other hand, un­der­per­form­ing malls have an equally neg­a­tive im­pact on the sur­round­ing re­gion and its econ­omy in gen­eral. Cus­tomers hes­i­tate walk­ing into malls, which af­fects the re­tailer’s busi­ness, which in turn ad­versely af­fects the mall devel­op­ers’ RoI.

Un­for­tu­nately, most re­ports sug­gest that there are more of the un­der-per­form­ing malls in the coun­try to­day than the ones that per­form. So, how do such malls get back on track and be the driv­ers of GDP? There is no sim­ple an­swer or an easy ͤx to this con­cern. Such a turn­around re­quires ͤnan­cial will backed by the man­age­rial will to con­vert this into a suc­cess­ful busi­ness. It needs the col­lec­tive pool­ing of spe­cial­ists across dis­ci­plines and a lot of ef­fort to en­sure that we get it right at the very ͤrst in­stance, as cus­tomers may not give this cen­tre a se­cond chance for re­vival.

Malls as Com­mu­nity Hubs

De­spite set­backs like the ad­vent of e-com­merce and the ris­ing num­ber of dy­ing malls, there were more than 500 op­er­a­tional malls across the coun­try as of 2017. The past few years have also wit­nessed en­thu­si­asm by mar­que global in­vestors to buy or build malls, mak­ing them grander than what In­di­ans are used to. The en­try of renowned global brands into In­dia – most of whom are mak­ing a bee­line for and open­ing stores in big malls – has also proved to be a game changer for In­dian malls.

So how can malls make them­selves over in or­der to in­crease their foot­falls and rake in more proͤts?

While it’s true that mall makeovers can be com­plex, take time and won’t im­me­di­ately bring in rev­enues, it is also true that com­mu­ni­ties de­pend on malls to pro­vide them ar­eas to re­lax and un­wind. With the de­cline of the tra­di­tional de­part­men­tal store, it has be­come more im­por­tant than ever for malls to ͤll in that space for their catch­ment area.

Turn­ing a Mall Around Many mall devel­op­ers ap­proach a turn­around in a se­quen­tial man­ner. Some ad­vo­cate that the de­sign be al­tered ͤrst while oth­ers be­lieve that im­prov­ing the day-to-day op­er­a­tions should be the ͤrst area to re­ceive at­ten­tion while many oth­ers main­tain that get­ting in the right re­tail­ers will do the trick. What mall devel­op­ers need to ask them­selves is why big ticket re­tail­ers don’t want to open stores in their cen­tres? The

an­swer to this ques­tion is sim­ple – most re­tail­ers be­lieve there will not be ad­e­quate con­sump­tion at the mall due to var­i­ous fac­tors in­clud­ing de­sign, retail mix, mall man­age­ment, and mar­ket­ing.

A turn­around is a com­bi­na­tion of ef­forts to im­prove upon all of these fac­tors. New, evolved malls to­day are not just larger in terms of square footage and bet­ter de­signed but are lo­cated in prime ar­eas and have po­si­tioned them­selves as com­mu­nity hubs, more than shop­ping des­ti­na­tions. They lay equal em­pha­sis on en­ter­tain­ment, play and food as they do on shop­ping. Apart from this, they have a great retail mix and have per­fected their zon­ing and mar­ket­ing meth­ods in or­der to at­tract more and more con­sumers.

A large chunk of un­der­per­form­ing malls are tak­ing a leaf out of the book of these new malls, ren­o­vat­ing them­selves to give them a new look and feel, up­grad­ing their in­fra­struc­ture and ten­ant mix to boost foot­falls and thus, gen­er­ate higher rev­enues.

The food courts of the ear­lier malls are be­ing re­placed with a wide va­ri­ety of restau­rants and pubs, ma­jor rev­enue gen­er­a­tors. They have a wider retail mix, of­fer­ing lux­ury and high-street brands, apart from the usual big depart­ment stores.

Last year, many malls demon­strated ex­actly what they can do to en­sure their brand keeps breath­ing and invit­ing more walk ins year-on-year. They upped the ante and many an eye­brow in cal­en­dar year 2017, set­ting bench­marks and cre­at­ing land­marks at a time when the dig­i­tal me­dia ex­plo­sion is chal­leng­ing retail busi­nesses and en­vi­ron­ments to rein­vent and re­draw their ap­proach to con­sumers.

A TURN­AROUND IS A COM­BI­NA­TION OF EF­FORTS TO IM­PROVE UPON ALL OF THESE FAC­TORS. NEW, EVOLVED MALLS ARE NOT JUST LARGER IN TERMS OF SQUARE FOOTAGE AND DE­SIGN BUT ARE LO­CATED IN PRIME AR­EAS AND HAVE PO­SI­TIONED THEM­SELVES AS COM­MU­NITY HUBS, MORE THAN SHOP­PING DES­TI­NA­TIONS.

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