With the liberalisation of the FDI policy, evolving consumer preferences and entry of global retail brands in India, mall developers are busy adapting their retail developments to the changing requirements and trends. Indeed, one of the most imperative transformations is the increasing focus on planning and optimisation of retail spaces so as to extract their highest potential.
Due to growing income levels and the inexorable rise of Gen Y, Indian consumers have become more discerning than never before. To meet the demands of this trend, mall developers are now using a structured approach for developments by doing their research to understand consumer requirements right from the planning stage of their malls. In this way, they are able to optimise their mall layouts and designs, incorporating critical conveniences and features.
Evolution As An Imperative
Indian mall developers have understood the importance of offering the right combination of retail categories, entertainment and F&B. Therefore, we are now seeing the creative utilisation of unused mall spaces and even parking space to incorporate newer retail categories to attract consumers and drive additional revenue.
Intelligent and superior mall design is a vital element for healthy circulation and providing good frontage and accessibility to all stores. Today, the priority is to enhance the per-square-foot productivity of the mall while simultaneously providing value to consumers. In order to increase the all-important ‘dwell time’ of shoppers, vacant spaces are now being reinvented into seating arrangements, kiosks, vending machines, ATMs, interactive information points and activities for children.
India’s increasing integration into the Global Village has ushered in a whole new slew of international brands. This, coupled with increased FDI inflows, has necessitated the optimization of space utilisation in malls so as to acclimatize them to international standards, store formats and norms.
Developers of existing mall developments must continually assess existing mall spaces with a view to making them more compatible with the requirements of international brands in terms of sizes and formats. Also, it is important for malls focused on superior performance to accommodate the upcoming global brands regardless of space availability.
Change and adaptation is the mantra for success today, be in terms of optimising space, design oriented changes, advertising and promotion, casual leasing or implementation of softer features such as change in the location of stores.
In the existing mall developments in the country, the major steps being taken to improve space utilization and maximise returns are:
· Elimination of alleys or narrow passages that some malls with inherently poor design produced. By merging such non-performing spaces with existing stores, better circulation is generated and secondary spines that create dead spaces are eliminated.
· Providing frontage and good accessibility to almost all stores in the mall, either by merging stores or by interchanging the categories within them.
· Relocating stores and right-sizing stores of existing brands: Changing the positioning of anchor stores to improve circulation or reducing the size of existing brands to bring in first-time brands.
· Introducing novel categories and brands in spaces that were not utilised properly earlier, thereby generating footfalls in those micro-areas.
· Utilising parking space and other ancillary spaces for advertisements, publicity and promotional events.
· Enhancing advertising opportunities and thereby driving additional income through floor graphics, standees, plasma screens and similar media
· Casual Leasing: Leasing of kiosks, vacant space or carts to children’s play area, tattoo stations, foot spas, etc.
India being a fast-paced market, developers are now designing their malls in a manner that allows a certain degree of flexibility and dynamism. In this way, they can introduce newer attractions from time to time. Mall developers now regularly track the performance of brands in terms of sales per square foot so as to assess whether the brands are utilising their space optimally. It has been evident in the industry that many brands are reducing their store sizes in order to maximise per square foot productivity.
The Impact Of Online Retail
The rapidly evolving phenomenon of online retailing has had very perceptible ramifications on physical offline retailing. Due to increasing online shopping, it has become imperative for shopping mall developments to attract consumers by offering a superlative experience and conveniences. Introduction of newer concepts and retail formats positively impacts the footfalls for a shopping mall.
Today, customers are using multiple channel and information sources to make their desired purchases. They will continue to use the most convenient channel. There are regional differences in the adoption of technology; however, mobile commerce and social media commerce are game changers. Mobile commerce is a powerful tool in the hands of consumer that allows them to match prices and even purchase online while being in the store. Likewise, social media platforms such as Facebook and Twitter are increasingly influencing consumer decisions.
The message herein is that that the future has to be geared to provide more than retailing to the customer. Consumers expect retail venues to be the destination in their own right, with interesting ambience, the latest brands and a host of activities of leisure, F&B and social activities other than shopping. These will be the key differentiators for malls going forward.
If I were to identify three key points on how retail spaces will need to evolve, they would be.
1. Landlords must become flexible in the design of the space, layout, materials, etc. and make their retail spaces more vibrant by proving more leisure activity
2. Stores must evolve to enable the consumer to use in-store technology to access a seamless online and offline shopping experience. Newer technology like holograms, virtual interactivity, socially networked shopping, 3Dexperience, etc. must find their way into stores.
3. Providing experience retailing will be the need of the hour, and landlords must go the extra mile to bring a unique experience and emotional connect with customers and society at large. If a mall is to be a place for physical visits, it has to create a firm social connection via interactive means that compel consumer to physically be a part of the process.
Further, the marketplace needs amplification in availability quality mall spaces. Brands do not prefer malls with sub-optimal design and low footfalls. In this respect, there is a need to optimise spaces in non-performing shopping malls by reengineering them in terms of design and tenant mix.
The importance of connectivity has also taken on a whole new context and meaning. While the retail industry has always been aware of the need for adequate connectivity and parking, the increasing inconvenience of overall urban commuting has itself become a red signal. Public transport will now become a key driver, and malls that are accessible by public transport will have an edge over other shopping centres.
Retail Asset Management and a structured research play an important role in improving space utilisation in a shopping mall. Resetting retail spaces according to the requirement of various stakeholders is a vital and never-ending requirement that calls for both structural and operational modifications on a constant basis.