Retail has always been super dynamic in nature and while there have been various levels at which the industry evolved over time, the most recent has been the advent of online shopping and then with the ongoing pandemic, a lot changed over a matter of only few months. E-commerce gained more prominence than ever before. Shopping scenes in India and everywhere else witnessed a drastic change with this.
Once the only shopping destination, or rather the most loved shopping destination, shopping malls across the country particularly had a hard time during the lockdown as they were the last to be allowed to open up, even after the lockdown was lifted. And now more than ever, shopping malls need to restrategise in order to bring back the consumers to the shopping centres. One such renewed game plan is the reshuffling of tenant mix, exploring more flexible leasing terms with tenants, pop-up stores and events, etc.
Even as reshuffling has been a part of running a shopping centre for ever, the changing times have made it all the more relevant and significant. Reshuffling not only enables the raison d’être of shopping malls – customer engagement and extensive experience – but also facilitates retail brands’ selection of malls.
Soothing ambience, entertainment zones, multi-cuisine restaurants, slew of national and international fashion brands and a controlled temperature for even more comfort, shopping malls offer all that and more. But this is not enough in order to stay relevant in the minds of the consumer today with a number of malls opening up and offering varied shopping experience to the visitors.
Mall culture picked up in India very recently with metro cities like Delhi, Mumbai, Chennai, Kolkata, Hyderabad, Bengaluru and Ahmedabad leading the mall revolution and other cities like Pune, Coimbatore, Ludhiana, Lucknow, Kochi following up. The competition is rising by the day and this is one reason that the ones that are successful are continuously evolving and innovating and strategising and restrategising to remain on the top.
Yogeshwar Sharma, Executive Director & CEO, Select CITYWALK, avers, “Reshuffling brands becomes an essential part of a shopping mall process with changing consumer preferences and buying behaviour. It is also a part of global trends along with a need to balance domestic and international brands. Consumers are always keen to explore new and exciting brands as it gives a sense of ‘discovery’ to them. Reshuffling therefore is part of changing strategies and to maintain a balance of surprise and newness. The relevance of reshuffling is that it brings a fresh perspective to the consumer who may have gotten used to the layout of the shopping centre or may have a bit of brand fatigue. These changes not only help in long run, but also make the space innovative, adoptive and consumer-centric.”
Besides curating a fresh approach, reshuffling also helps in optimum utilisation of the space, to bring onboard and in sight the new brands and more relevant brands. Reshuffling is a regular process at malls and the process takes an average of six months to even a year to be executed. So, what really decides the brand placement or reshuffling process?
Pushpa Bector, Executive Director, DLF Retail, informs, “One of the main factors here is the relevance of the brand to the mall. We reshuffle to amplify. Reshuffling generally takes place in the form of: a) Location change; b) Store resizing; c) New format; and d) New brand entry. There is no shelf life to reshuffling per say but we keep a close watch on brands’ performance in terms of sales and consumers dwell time in the store. Basis the store performance, we take the decision. Having said that, at DLF, we have many parameters that serve as a litmus test before signing up with a brand at our malls and therefore we see limited reshuffling in our brands. The brands which cater to the target audience are the ones that stay and the brands that become less relevant overtime are replaced by better and new brands entering the market.”
Similarly, fashion brands too weigh on the footfall that a mall receives, the ambience and location among other things, before taking a decision on opening a store, the size and location of the store, the collection to showcase, the leasing terms and duration, etc.
Brand placement strategy
The shopping malls are meant to have everything under one roof, but it is also one of the major prerogative to ensure that the customers are not lost inside and this necessitates the brand placement strategy. While a well-managed brand placement goes a long way for a shopping mall, it all also depends on the location and the kind of footfall that decides on allocation and re-allocation of spaces to brands, restaurants or entertainment zones, etc. Different malls have different strategies in place for brand placements and floor allocations, which are mostly according to the broad zones followed by the mall where similar category of brands are placed together.
“India is culturally diverse with brand amalgamation at an international, national and regional level. The brands at DLF Malls are carefully curated to cater to all with brands in each category zoned together thereby allowing a delightful customer experience. At DLF Malls, we have strategically balanced the brand mix between national, international and regional brands. Brand placement is done basis the size of the store, zoning, the layout of the store and most importantly the consumer engagement programs that brand has planned. Like for instance, Hamleys in DLF Mall of India was shifted to 4th floor since the 4th floor is a paradise garden for toys and gaming arenas. With Funcity gaming section, shifting Hamleys next to them was done to cater to the genre of the audience at the floor and to provide fun experience and convenience of all like-minded stores placed at the same zone in the mall,” explains Puspa Bector.
She then goes on to add, “Another recent example of shuffling is GAP at Mall of India, who have optimised their store size and moved to a more relevant location next to the international brands and this gave us the opportunity to consolidate larger space for Uniqlo who have just opened at DLF Mall of India to a great response. Similarly, Tommy Hilfiger has also resized its store and Aeropostale has moved to the surrendered space since it’s a more relevant zone for the brand. Karl Lagerfeld for Cover Story at DLF Promenade is now getting converted to a newer and a bigger format, because the response we got from our consumers was encouraging and we felt it needed a bigger space.”
Similarly, at Select CITYWALK, Zara renovated and reopened its bigger and extended outlet at its first India store location, making it the brand’s newest concept store in the country, spread in an area around 25,000 sq. ft. Decathlon too opened its store on the lower ground floor of Select CITYWALK, this August and has become one of the anchor tenants at the mall.
Changing brand locations also help in bringing life back to dead zones and increases footfall in that particular area. Besides, shopping malls also reshuffle in order to ensure that they have the best brands as their anchor tenants and these need to remain relevant and the main footfall puller always. An anchor store implies a store that may or may not be large in terms of size or square footage and caters to people of almost all ages, usually has a large variety of merchandise, and most importantly, is a rage among consumer base of the mall.
According to an expert, strong anchors attract more than 30 percent of the total footfall. While for Select CITYWALK, Zara, H&M, Sephora, Croma, Home Stop, Decathlon, Pantaloons, Modern Bazaar and few others are its mini anchors, some of the anchor brands include UNIQLO, Marks & Spencer, Zara and H&M in fashion segment and PVR Cinemas, Cinepolis and Hamleys in the entertainment segment. Furthermore, shopping malls now also experiment with pop-up stores which are purposed to build buzz and are a perfect solution for mall operators looking to liven up the dynamics. Many budding online brands enter offline space with pop up stores at shopping centres to test the market.
The Covid effect
Even as the shopping malls have been reshuffling their brand mix to continuously remain fresh and relevant, a lot has changed with the ongoing pandemic and this has led to shopping malls strategising on newer reshuffling ideas and also the survival tactics. Now it is even more crucial for shopping centres to allocate spaces to brands basis their connection with the consumers and capacity to attract more footfall, since more depends on the sales at the brand stores.
The effect of the pandemic has been drastic on the brands as well as shopping malls and this made the two parties find a middle ground which was revenue sharing model. Revenue sharing is an innovative strategy wherein mall developers instead of charging a specific rent from retailers, will share a certain amount of revenues generated by the retailer. Yogeshwar Sharma says, “In current times, all businesses need to support each other and a revenue share model to an extent would make sense. It is however not a long term solution, so we do foresee these models evolving as the economy picks up and evolves.”
The ongoing pandemic and the months of lockdown, in some cases, has also led to a number of brands pulling out or reducing square meterage at shopping malls because of the drastic impact on revenue generation. While major shopping centres in metro cities are fortunate to not have many stores shut because of the pandemic, a number of malls in smaller cities have faced the brunt and are reallocating spaces/ stores to existing brands in order to still look appealing to the whatever footfall they are receiving.
Furthermore, shopping centres are also adapting to the current situation and introducing safety norms and precautionary measures at the malls in order to make the consumers feel comfortable and safe while they are shopping.
“To follow the social distancing norms and provide frictionless shopping to our consumers, we have launched several innovative services like curb side pick-up, contactless dining along with table booking and pre order options. On our unified DLF Malls Lukout app, we have introduced Shop Assist feature which directly connects with brand’s store manager for an uninterrupted shopping and information about our malls and brands. Currently, we have reached 50 percent of previous levels in terms of footfall and in terms of sales, our anticipation is to have 70-75 percent in this quarter,” concludes Pushpa Bector.