Keeping the malls Relevant
Online shopping provides consumers with ultimate levels of convenience. Malls will never be able to compete with the endless product selection, price comparisons and always-on nature of online. Nor should they try. Instead, malls need to move in a different direction, away from commoditized shopping experiences and toward a broadened value proposition for consumers. Innovative malls are incorporating value-added elements that attempt to recast the mall as the new downtown, including concerts, arts centers, spas, fitness clubs, and farmer’s markets.These services provide a level of leisure and entertainment that can never be satisfied online. In the face of these considerable challenges, malls are seeking to stay relevant, drive growth and boost efficiency. It is critical that malls be about much more than stores. Another way is changing the mix of tenant/public space, moving from the current 70/30 to 60/40, or even 50/50. When this happens, these expanded public spaces will need to be planned and programed over the year much like an exhibition. They will be managed more like content and media, instead of real estate. Among the large universe of options for enhancing the customer experience, it is possible to identify initiatives that will be both ROI-positive and substantially boost the satisfaction customers have toward malls. To do this, mall players must first isolate and quantify the consumer touch points that are most responsible for driving satisfaction. Use these touch points to prioritize areas of investment and to design a cohesive customer experience program that will yield higher visit and/or spend rates, and ultimately greater consumer loyalty. Increase productivity and efficiency of the current mall base through a strategic review of the tenant mix, taking into account consumer needs and retailer economics. This analysis should guide the management of rent pricing and overall commercial planning. On the cost front, the focus should be on strict management of direct and indirect costs, combined with operational efficiency, which is critical for successful customer experience transformations. The asset manager needs to think surgically about where and how to grow in a way that won’t jeopardize returns The digital transformation of retail is great news for malls. It starts from extending their relationships with customers to before and after the mall visit. This is about engaging customers through compelling content and creating deeper bonds with them through social media and proprietary sites and apps, as well as loyalty programs. Social media can be used, for instance, to create buzz about new tenants or solicit ideas from consumers about ideas for new stores. One mall company has utilized segmented Facebook communication to speak to different communities, such as different geographies or interest groups or specific malls. Mall loyalty programs can provide the means for malls to establish a direct relationship with customers that goes beyond each visit to the mall, while allowing malls to collect precious information about customers. Similarly, when it comes to usage, technology can again be used by malls to decrease customer pain points, while simultaneously creating entirely new delight points. Technology, for instance, can be used in finding parking. Sensors located in parking lots detect how many spots are available on each level and give visual indicators to drivers. Once within the mall, mobile apps can offer quick, easy guides to help shoppers find what they’re looking for at today’s increasingly large and multi-level malls. Next comes the usage of analytics based metrics that are useful for shopping centers in optimizing their layouts: Creating innovative formats like mixed used developments that offer consumers an attractive, integrated community in which to live, work and shop. They also serve to generate additional traffic for the malls while maximizing returns on invested capital. The shopping center operators need to conduct regular trainings in skill set enhancement. Another very important area where training plays a crucial role is disaster preparedness. Our country is vulnerable to both natural and manmade calamities. Nothing is more valuable than human lives. Safety and security of the patrons should take precedence over anything else. For example, average time to evacuate a building should be about 2.5 minutes. The management has to have sop’s in place for any eventuality. As a trained disaster management specialist and a decorated veteran on a scale of one to ten (ten being the best) I find most of our shopping malls to be two or below in disaster preparedness. The only thing separating a mall owner / from ecommerce retailer is the human interface. The moment you lose track of your customer your countdown to dooms day has begun. Despite of all the technological advances the world had made human connection would always stay supreme. Hence if we are looking for sustainability in the shopping mall business the easiest way is to create win win for all the stakeholders concerned, customers, retailers and the developer in that order.In the concluding part of the “Dead Mall Walking, Dheeraj Dogra, Realty & Retail Analyst elaborates on the way forward for Indian retail sector.
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