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refreshing branding strategies to improve and add to their appeal, through common area improvements like modernizing outdated features like new lobbies, comfortable seating, free WiFi, relighting walkways, improved way ͤnding, fresh paint and more windows for natural light.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