Indian retail real estate to witness revolution
Indian retail real estate has undergone a tremendous metamorphosis since the advent of organized retail in the early '90s. Major transitions have happened in terms of design, size, provision of facilities, tenant mixes and business models. From the initial years of organized retail formats in India to the massive malls and their international and domestic brands today, it's indeed been a fascinating ride. The entry of online retailers over the last couple of years has spurred the progress even more, resulting in an unprecedented rate of change. Developers today are making their retail spaces more vibrant; the focus is now on providing a 360-degree experience to their clients that transcends mere shopping and delves into the realm of multi-sensory input communication. Mall and shop designs, along with upgraded ambience, obviously play an important role in offering a shopping experience of international standards. The entry of international brands has led to a serious jostle for prime spaces within quality shopping malls, further driving the development of avant-garde retail spaces with the requisite support infrastructure. In their quest to offer a real value proposition to consumers, many malls are now providing services such as concierge, valet, tailoring, foreign exchange, car wash, travel desk, gift wrapping, rent-a-stroller facilities and infant feeding rooms. E-tailing, which was earlier seen as a dark horse at best, has now in fact taken centre-stage and is playing a major role in reshaping retail real estate spaces and shifting the purpose of brick-and-mortar retailing toward providing innovative and entertaining customer experiences. Owing to the rising competition from e-tailers, categories such as F&B and entertainment have gained increasing importance as these cannot be provided by online retailers. There is no doubt that e-tailing is offering sharp competition to traditional retail formats, and that it has in fact changed the entire retail market dynamics in India. That said, e-tailing has not - as was previously predicted - eroded the importance of brick-and-mortar stores. The experience and the touch points provided by physical stores cannot be matched by online retailing. Likewise, some categories like F&B, entertainment and leisure cannot be provided by e-retailers. Meanwhile, brick-and-mortar retailers are combating the competition from online retailing by right-sizing their stores and restructuring their expansion plans through proper research. These measures are now leading to better sales and profits for these retailers. Both malls and high streets are in demand today, as both have their own unique selling proposition. A brand’s visibility is generally higher on a high street than in a mall; high streets also generate higher casual footfalls. On the other hand, malls offer a climate-controlled environment with value-added facilities for consumers. The success of any retail destination depends upon the amalgamation of factors that include accessibility, convenience, variety in tenant mix and good infrastructure. Malls offer better conveniences and facilities, but the charm - and importance - of high streets has definitely not faded away. Indian retail - and the real estate that forms its base - has certainly come a long way. And in terms of scope for future innovations, the sky is literally the limit....
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