Go local, not global


September 3, 2010

indiaretailing.com, Payal Kapoor

3 September 2010

As the competition heats up among shopping centres, what would differentiate one from the other? The answer lies in localisation of the shopping centre in line with local tastes and preferences. This becomes all the more important, because today’s consumer is an evolved creature, who owes no loyalty to a shopping centre unless it meets her high expectations and offers a unique shopping experience.

In a poll question asked by IndiaRetailing — “Shopping centres are still not unique when it comes to retail offerings” – 68.22 per cent of the respondents said “yes”, whereas only 8.41 per cent said “no”; the remaining (23.36 per cent) preferred to stay “neutral”.

Stressing that shopping centres need to reflect local needs, tastes and habits, Devangshu Dutta, chief executive, Third Eyesight, says, “Shopping centres can get truly differentiated from one other only when they are seen as part of a city’s social and commercial infrastructure.”

He firmly believes that most shopping centres that have come up in recent years have been planned from the point of view of the land available and maximisation of capital gain or income, rather than being part of specific urban landscapes. “Thus, we have ‘characterless boxes’ which target, by and large, the same premium national brands. With such an approach, uniqueness cannot be expected,” Dutta emphasises.

Deepti Goel, head, leasing, Ambience Mall, however, does not agree with Dutta. She says, “Every shopping centre is unique and is sensitive to the specific needs of consumers. The offerings of a shopping centre are unique to the extent of identification of the mall with a certain subset of the consumer, despite the possibility of a certain overlap in some areas.”

She further says, “The mall is a social centre which offers more than just retail and, therefore, it is unfair to evaluate the uniqueness of a shopping centre by the possibility of an overlap of retail offerings.”

Right mix and match

So, what’s the way ahead for shopping centres?

The right design, along with the right tenant mix that matches the customer’s experience, is the best ingredient for the success of a shopping centre.

To create a great experience for the customers, shopping centres must understand not only the demographics of the mall catchment area, but also the consumer’s psychographic profile (their lifestyle, brands they relate to, their rational and emotional drivers and usage habits, etc).

But it appears mall rentals come in the way of shopping centres to address the local needs of consumers. “Shopping centre developers in India are mostly concerned with optimising the weighted average of rentals, hence certain categories, which might be vital for enhancing the (tenant) mix, might take a back seat in order to achieve higher rentals,” observes Dheeraj Dogra, director, mall mechanics, Beyond Squarefeet Advisory Pvt Ltd.

Stressing the need to make shopping centres a place of social gatherings, Dogra says, “A lot of retail services, such as banks, post offices, shoe repair and hobby shops, are mostly left out of the mix. Also left out are local, home-grown retailers who have strong connections within the community. It seems a majority of shopping centres boast of the same mix and, hence, are not unique. If we look at the nation’s top five shopping centres, the depth of retail mix is what makes them stand out."

Dinaz Madhukar, vice-president, mall management, DLF Emporio, says, “Shopping centres can and should be unique in their retail offerings. Each destination should strive for a personality and have a connect with its target audience. It is imperative that the brand attributes come alive when one comes to the mall.”

Giving the example of DLF Emporio mall in Delhi, Madhukar says, “The mall has carved a niche for itself in the luxury retail space. The luxury ambience in the mall is complemented by a multi-cuisine restaurant, which carries the flavour of design throughout. It is different from a typical food court, unique in its offering and yet a part of the mall.”

New trends, new shopping experience

New generation malls are no longer about shopping; they are striving to become destinations by providing a wide range of entertainment for all consumer groups.

With a huge number of new shopping centres entering the market and the existing players bolstering their position, localising the malls has become a vital tool for developers and owners of malls to attract footfall and increase retail revenues.

Thorough groundwork during the planning stage, in terms of understanding consumer behaviour, likely footfalls, retail segments potential, propensity to spend on various retail categories, profiling existing and upcoming shopping destinations within the catchment, therefore, becomes significant, as it gives insights for mall positioning.

A fully integrated strategy must involve all areas of the shopping centre, from tenant mix to facilities management to overall marketing and communications strategy. The key is to understand the market and position the “shopping centre” to appeal to the right tenants and consumers.

Sanjay Prabhu, head-marketing and business development, City Mall Developers, concludes, “The offering of brands in shopping centres is quite limited. Unless India opens up its doors and allows more brands to come in, the retail market will see stagnation soon.”