- Col. Ashutosh Beri
With the provision of more entertainment options in malls, Indian retailers now have vastly enhanced their ability to increase sales. Until recently, street markets and bazaars were the top performers in the retail space, and they were cornering a huge chunk of the overall sales. However, traditional markets now have to imitate malls by creating a better overall shopping experience for potential customers.
They have to offer a larger mix of diverse products – including food and beverage as well as entertainment outlets, preferably under one roof, like malls do. A consumer is attracted to a mall because of the availability of world-class services, exposure to various brands, tempting promotional offers and periodic discounts. The superior ease of shopping in air-conditioned, aesthetic comfort as well as access to a variety of food options are added incentives to mall visitors.
New Business Strategies
Rising competition has made mall developers focus on core competencies and accurately researched offerings to their target customers. To begin with, they attempt to understand the shopping needs of customers in their focus ‘catchment’ areas. Then, they proceed to build a well-planned portfolio of retail options that address the needs of those consumers. Post-recession, retailers have become a lot more vigilant in terms of expansion, and they now evaluate the specific dynamics and profitability of each location more carefully than ever before.
Certain business strategies have now been recognized as absolutely necessary for running a mall successfully:
Zoning: Formulating the right tenant mix and its placement within the mall is important. The bouquet of different retail stores occupying space in a mall is called the tenant mix. Zoning is the process of dividing the available mall space into different sectors for placing various retailers.
A sustainable revenue model: Mall developers should not only concentrate on fixed rental but develop innovative models where both retailers and developers would be able to earn profits. Working out a pure revenue sharing model with a minimum guarantee is one of the most favorable practices at present.
Promotions and marketing: Events that can help promote companies are essential. These fall under the purview of effective mall management – more on this below). Some of these events include food festivals and celebrity visits that increase foot falls and in turn sales volumes. Organizing cultural events has also proved useful. The savvier mall developers now plan out marketing strategies for individual malls in order to meet the requirements of local consumers, and to address the challenges of local or regional competitors.
Mall Management
Mall management – a function of Property & Asset Management – is basically a combination of services that factor in people, place, processes and technology in a particular building. Professional mall management results in the best possible utilisation of resources available. It encompasses three aspects – infrastructure, ambience and traffic management:
Infrastructure management – This pertains to the management of facilities provided to tenants, as well as risk management measures such as adopting essential safety measures, conducting asset liability and environmental audits and imparting emergency and evacuation training.
Ambiance management – This refers to the management of the mall’s overall appearance and ‘feel’, which is necessary in every mall.
Traffic management – This concerns itself with crowd management, both inside the mall premises and in the parking zone.
The Road Ahead
Until very recently, most Indian mall developers considered mall management as another name for facility management. The realisation that these two concepts are different and that professional mall management has immense bearing on the long-term viability and success of a mall is gradually being accepted. It is gratifying to note that more and more mall developers are now adopting professional mall management in order to attain and maintain success.
The author is Managing Director – Property & Asset Management at Jones Lang LaSalle, India
