Description
Documentation explains about IMC in mall management
Retail Management Project: IMC in Mall Management
[Type text]
Table of Contents
Selling Retail Space to Retailers..............3 Developing and Positioning Mall as a Brand......................................................6 Organizing Promotional Events..............10 Promotional Space Selling (Situation). . . .15 Temporary Tenants...............................19 Supporting Struggling Clients................21 Case Study............................................25
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Selling Retail Space to Investors
Space selling in retailing is concerned with the space available at MALLS, SUPERMARKETS, HYPERMARKETS etc. this job is responsibility of a mall manager he is required to utilize the maximum space he can for shops or merchandise available. The retail space selling or selling spaces in malls to investors much depend on what business or product line the retailer or shop owner is going to sell. If the retailer has previous experience of having shops in the mall, he may well consider exactly where in the mall is he getting the place. Investors also look spaces which not only suffice their current business needs but also prospects of growing business. Some of the factors which investors consider and hence should mall owner while selling or leasing out spaces are: 1. Traffic Patterns – If mall is far away from busy areas rent or sell value will decrease. 2. Previous Tenants – If the sales history of previous owner is known and is not that attractive it affects the selling value of that space. New buyers try to find out why the previous owner left. 3. Cooperative Marketing – If few of the retailers can come together to place their ads in the mall in such a way that all of them are benefited from it. 4. Foot falls – Buyers weigh the benefits of guaranteed foot traffic at a mall location against premium rent and hence mall owner should consider the foot falls before fixing the rent or value for the space. 5. Common Space of Malls available to tenants- Buyers consider how much common space is available to all the tenants. 6. Mall Timings- timings of the mall have great impact on the space in the mall which is getting sold. Also are the timings for all the tenants same matter. 7. Competitors- Tenants take great efforts to find out their competitors and understand their business pattern. If some of these competitors are already there in the mall or have great chance of starting in the near time it will have impact on the selling value. Some of the lease agreement do provide guaranteed protection against the competition. 8. Liability Causes in the agreement – It is better to have clear wordings and without any confusion in the lease or sell agreement to avoid the litigation later on.
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9. Facilities and Charges- Seller should consider what all facilities like heating, air conditioning, first aid, security etc he is providing and these are of what quality. 10. Insurance Clauses - Insurance clauses impact the selling value of the mall spaces. Some of the mall owners ask for a percentage of sales in addition to the monthly lease payment. For such an arrangement to be worth it, mall owner should guarantee the minimum foot falls and low penalties for leaving lease early. Mall owners should consider square footage, utility, lease terms and property taxes as well as length of the lease. There should be clear mention of the conditions for renovation, painting etc. There might be some incidences where retailers may want to shift to some other places within the mall. Most of the malls spaces are sold on 30-Day move out clause in the agreement if the buyer is not satisfied with the space. This means the tenant gives the notice period of 30 days before leaving out the place.
Mall owners should consider what type of ambience does the mall have in targeting what type of people. For example Lifestyle may attract middle class customers but Shoppers Stop targets upper middle class crowd. Some of the facilities which can value up the selling are music played in the mall, centralized as well as portioned music and AC, air ducts, floor tiles type, escalators and free space available
To sell the mall space at good value the mall owner should not only consider which all things make location and space the best for selling but also what makes them worst. To understand what makes a bad location you need to consider things such as access to the shopping centre, ease of exiting the shopping centre, distance between anchor stores, whether the shopping centre caters to walkers or drivers, visibility of the space during each of the four seasons (do trees cover up the store signage in the spring), safety of the centre, availability of marquee signage, etc.
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Integrated Marketing Communication and Space Selling In Mall: Considering the IMC in mall, the space selling means advertising the spaces which are sold to investors. The factors which impact this space selling are:
1. Foot falls: The exposure of the advertisement is proportional to the foot falls which
mall attracts. Hence the mall which is in busy areas and which gets good number of foot falls every week sells the spaces at the premium rates. 2. Place of Putting the Ad: The place at which the advertisement is put up varies the cost. Generally the ads which are placed at prominent places like entrance, on escalators, near anchor stores demand high premiums. 3. Lighting: This factor impacts the cost as malls pay electricity bills at the commercial rates and lighting condition has great potential to attract the crowd and the attention of the people. 4. Size of the Ad: Naturally the bigger ads costs the buyers/investors/clients more. Also the material by which the ad is made and the material on which it is placed impacts the final cost. Generally the common place in the mall where the advertisers choose to place the ads are mall floors, escalators, the common area between the stores, the central area of the mall structure is round, the lifts, payment counters.
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Developing and Positioning Mall as a Brand
Positioning a mall refers to defining the category of services offered based on demographics, psychographics, income levels, competition in neighbouring areas and extensive market research of the catchment. For example, if the market research indicates that the average number of households living in a particular area belongs to the upper middle class, then a high-end retail mall would suit the location. An example of this practice can be seen in the upcoming malls, Select City Walk in Saket and DLF’s Emporio in Vasant Kunj. We believe that these retail developments are prime examples of good mall positioning. These malls have been specifically designed after an extensive market research, based on the catchment area of South Delhi. The malls provide high-end luxury products catering to the elite class (socioeconomic classification A and B consumers) residing in South Delhi. Positioning also refers to the location of the shopping mall. A good location defined in terms of factors like: ? Ease of access via roads, ? Good visibility ? Crowded Area ? Shopping area in vicinity, etc.. are considered as one of the prime pre requisites for a mall. Although other activities such as trade/tenant mix can be revisited or redefined, the location remains fixed, making it an imperative factor for a mall. To ensure that a mall attracts retailers and consumers, professional mall management is a necessity. The mall market is an extremely competitive one, having a high degree of internal and external competition, the latter being from established high-street locations across all cities. To lure retailers and consumers to its mall, a developer has to ensure that their property follows the best practices in the market especially in terms of mall mgmt.
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Define a clear mall positioning statement: A Mall that caters to high volume and low margin players would have different anchor and tenant strategies as compared to a mall catering to the youth. Global research into consumer shopping behaviour has shown that browser category shoppers tend to spend 15% more unplanned money, however are less likely to develop mall loyalty. So called “destination” shoppers visit a mall for a particular good or service and get locked in for longer periods of time and frequencies. However destination shoppers leave home with a particular destination in mind say a children’s area or a book store etc..A mall visit is about spending time rather than only money and positioning to your target segment allows you to create a destination through tenants, public spaces and entertainment mix. More than half of buying power rests with two types of shoppers: “Navigators” — independent, creative types who shop for what they’re passionate about — and “Social Seekers” — who also love shopping but look to others for validation. We need to target these effectively and for that we need to build a mall which is a brand by itself. This can be done by various means. Hence we need to study the following things on launching a mall to position it as a brand in the customers mind: ? Catchment Analysis: Demographics of the customers in that area and their consumer behavior ? Competitor’s Analysis: Studying Competitor mall in the same area as to how well it is functioning and how their strengths and weakness is impacting the performance of those malls. Location pros and cons and lessons which are to be learnt and changes to be accommodated in our mall. ? Advertising the mall through medium which directly reach the target group e.g.: TV, newspapers, magazines, radio, etc.. ? Sponsoring occasions like ganpati in that particular area
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? Location: Choosing a location which is prime and which has good visibility especially during evening traffic.
A great example of such a mall is the Forum Mall:Forum Mall is located at Koramangala, a prosperous and high density catchments area and a mere 10 minutes from Brigade Road, is 4 and half acres of main road abutting land that will soon house Three and a half lakh square foot of pulsating entertainment and brand penetrating retailing all under one roof.
Such a positioning has made this mall the most favorite of all in Bangalore. It was the first one to come up in the area and there were many more which came up in the same area but could not beat Forum Mall because of the brand it has created of itself. Lack of clear mall positioning- theme, trade mix and target audience, can lead to the following: The location, catchment and shoppers profile are different for different malls hence just imitating the competitors can lead to a goof up. Important is to analyze other mall mistakes and make sure we learn from it before we promote our mall. A visit to the mall is many things to many people. For some, it means watching the latest flick at the multiplex; for others, it’s window shopping. Some go to shop, while others simply fill contest forms or test drive the latest car parked in the lobby. It hasn’t been more that three to four years since India adopted the worldwide shopping model called ‘Shoppertainment’— entertainment integrated with retail. Currently, the market size of shopping malls is estimated to be Rs 40 crore. This is expected to grow up to Rs 400-500 crore in the next four to five years, according to industry sources. These hot destinations for consumers are also hot spots for advertisers. There are two factors that determine the popularity of a mall:-
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? First is the location of the mall. ? Second, the brands that house in a mall.
Entertainment destinations like multiplexes and grocery sections add value to the mall. Good registered brands who want to hit hard on the customer prefer advertising in a mall. These are brands which have focus and want the target audience to see and absorb the message. But this message to reach the TG of the mall. Hence the mediums used to brand a mall should effectively communicate the brands that the mall encompasses to add reputation to the mall and convert the mall itself into a brand. Inorbit Mall in malad and Forum Mall in koramangala, banglore are the best examples of this. The print Ads given and fliers distributed in catchment area should well include the big brands that the mall is associated with, which will leave an impact on the minds of the customers. Advertising the mall in the right place, through the right medium to reach the right target audience is of utmost importance,, to position a mall as a brand.
Organizing Promotional Events
What is it? There are several marketing strategies to build a strong and successful business. Most of these strategies are simple but not always easy, however if they are coupled with vision, vigour and a little persistence, both business and life can be enjoyed with ease and results produced in a shorter term. One such critical part of effective marketing is "Promotional Events". A promotional event is quite simply an event that intended for the purpose of promotion of your products. In this case, our product is our mall. Hence, any event held in the premises of
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the mall in order to increase footfalls to the mall as a whole or promote a particular brand housed in your mall will be a part of the promotional event. The event can be used to generate revenue however generally it will only generate a nominal amount of revenue. This type of event itself is designed for promotion and sales rather than increasing bottom line. As mentioned above, promotional events in a mall can be of the following 2 types: Mall Level Mall event is primarily targeted to promote footfalls to the mall as a whole. Some examples are movie launches; book launch, some movie / TV shooting, contests, food festivals, handicraft exhibitions and celebrity visits etc. The idea is to create a buzz for the mall by organizing such crowd puller events in your premises. At the same time, your partners (the stores and brands housed in your mall) will invite their clients to your event because it provides value and serves them to do so. Hence, for the benefit of your clients, your event should be valuable to their existing clients, that is, your customers. By studying the stores and brands of your mall, and their needs properly, the strategic partners will gladly invite their existing clients and potential clients for the sheer benefit it is to him/her and him/her business. It's a win-win situation for everybody. Brand Specific Brand specific events are the ones organized by brands housed in the mall in the premises of the mall. The advantage for the brands through such events is firstly to increase visibility of the brand and thus the sales by attracting more customers; while that for the mall is increased footfalls, increased visibility and revenue earning through space rent. Many brands such as Funskool, Mattel, L’Oreal, Camlin etc. have opted for such events. The recent national level Rubik’s challenge 2010 is an example of a brand specific event organized by Funskool at Inorbit mall in Mumbai.
Why so important? Have you ever shopped in a store or a mall that was dull and boring? You may not even recall the name of the mall because it was simply uninteresting. As a retailer, you don't want your
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customers to consider your mall as a dry place to be. A great way to avoid becoming mundane is by strategically planning promotional events for your mall. One survey showed that 83% of people feel more comfortable buying a product they have seen demonstrated. The figure below shows the impact of in-store events vis-à-vis other promotional tactics. Mall promotions are a step ahead to launch it for the entire mall rather than restricting it to a particular store.
How to go about it? Intention The first step to organizing promotional events is to know the intention behind organizing it in the first place. These reasons may vary from occasion to occasion such as opening of the mall, new store / product launch, product promotion, festival, revamping the business etc. Depending upon the intention and importance, all the other aspects shall be decided viz. the budget, time, scale etc. Scale The scale of the event may vary from a small one to an extremely extravagant one, depending on your comfort level and competency in hosting it. Be sure to make it large enough that it is worth it to you and your business. The best way to do this is to analyse your close ratio and
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look at your projections of sales to determine how may attendees you need to produce a desired result. If you haven't done this pre - homework, you may have to test a few events to see what's right for your bottom line. Occasion The occasion for the events may be decided based on the purpose (such as a launch or a premiere date or a festival). If a special day is too far to wait, go ahead to declaring your own holiday or event. There are many unusual celebrations such which are often organized by malls. Some of these are as Humorists Are Artists Month (March) and Happiness Happens Month (August), special days, weeks and months as well as holidays, historical anniversaries and festivals. The bottom-line is – do not let a marketing opportunity pass by. Managing Glitches This is the most crucial aspect of the promotional event. All your efforts, money and reputation may go down the drain if glitches occur on The Day. Hence, detailed planning for mitigating such incidents needs to be carried out. Security forms the foremost concern for all events, especially in case of involvement of a celebrity. Other issues that need to be taken care of range from logistics management to crowd handling etc. Many companies therefore have a separate event planning department for this purpose, while many others outsource the planning and organizing to event management companies. Few Tips • • • • • Choose a promotion that fits your industry, target audience and goals. Maintain a calendar of all planned and actual promotional events. Don't forget to include local community events in the planning. Try to schedule events 3-6 months in advance to create an effective promotion. Create a folder for each event to maintain records and review the final results.
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•
Increase your open-to-buy and purchase extra inventory for special events.
Promotional Space
In order to understand how promotions can be made in malls, it is essential to identify the places where promotions can be made effectively. Outside Promotions: Wall Billboards Parking place Waiting area for the lifts Indoor Promotions: Lobby Kiosks Lift boarding and alighting area Rooftop hanging placards Giant screen Reception Food court Considering the successful models of malls in India, the following is a description of how mall promotion spaces are created and used effectively. It’s a Sunday. With India’s growing prowess in the service and technology sector, the middle class of India has blossomed into a high spending consumer segment. The Indian nuclear family on a weekend outing to the mall has become an increasingly common sight. The Sharma family residing in Lokhandwala, Andheri (W) decides to visit the City Mall located on the Malad Link Road (5 kms from their place). Mr. Sharma is an executive with a consulting MNC and Mrs. Sharma is a nursery teacher. The children, Roshan and Sia, are 12 and 8 respectively. After a not too distant journey of half an hour, they reached the city mall at 5 pm. From
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about 100 metres, they can spot the huge glowing City Mall sign board. There is a small queue at the entrance for car parking. Roshan spots the outdoor hoarding of the 3 movies currently playing at PVR Cinemas inside the mall. The three movies are Wall Street, Anjaana Anjaani and Popeye – the Sailor Man. Mr. Sharma knows no one apart from him would be willing to watch Wall Street, Mrs. Sharma and Sia are desperate to watch Anjaana Anjaani and so, Roshan is forced to go along with them even though he wants to see his Popeye’s travails again. They enter the mall premises and try to find some parking space in the open parking area. A huge hoarding of Zara, Gap & Nautica (premium brands in the mall) greets them as they alight from their car. However, there is no parking available and hence, they make their way to the multi-storey car park. They finally find a parking space on Level 2. They make their way towards the lift boarding enclosure on their parking level. While waiting for the lift, Mrs. Sharma glances towards the 10 Best Seller books showcased in the shelf with a nice gold coloured inscription of the Oxford Bookstore (Level -1) highlighted above. Little Sia also sees some cuddly soft toys kept on the window shelf on the other side and tells her mom that she wants to visit this ‘Toy Nation’ in the superstore. When they board the lift, the doors of the lift shut and they can see a nice ambient media campaign of a young college teens coming closer and their eyeballs go to the words ‘Paas Aao Na’ – Close up. On the roof of the lift, there is a ceiling mounted LCD. They catch the advertisement of the new Volkswagen Vento and the Blackberry Boyz in their brief stay in the elevator. At the lobby of the mall, they are mesmerised by the colours they witness on the Giant Screen at a distance. The screen is playing the commercial of the new Sony Monolith Television and then they hear a faintly audible sound which confirms ‘It’s a Sony’. They find the mall reception to their left. They approach the receptionist who gives them a warm smile. She answers their queries regarding the locations of the shops the Sharmas wish to visit, gives them suggestions of places they would like in the mall and hands them a mall layout. Roshan notices a very similar looking family depicted in the LCD screen at the
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reception. He watches this 1 minute video of their day at the mall as the words ‘Shopping, Entertainment, Fun’ light up the screen. As they walk a little further, they wonder why there is such a gathering of crowd. Mr. Sharma then point out to the giant gong and people waiting for their turn to hit it with the monster hammer. Oh, it’s the ‘Thums up – Kitna Hain Dum’ Challenge. Branding personnel from Thums up have set up a temporary kiosk for promotional purposes. Then, the inquisitive Roshan looks up again and finds his favourite football stars on Nike placards hanging from the roof. He makes a note in his mind to check out the new Manchester United Nike football and somehow convince his dad to buy it. First they bought the tickets to the movie from the ticket kiosk at the lobby level. The theatre, however, was located at level 3 in a separate section of the mall. The kids wanted to visit the candy shop that they had heard so much about from their school friends. As they took the escalator to level 1, their eyes were greeted with sumptuous pictures of the varieties of candies on a backlit advertisement board that cannot be missed. After completing their quota of visiting the stores they had decided and some more windowshopping, they decided to have their food. The food court and restaurants were located at the last level. They were a tad tired and so decided to take the elevator. As soon as the elevator doors opened, Mr. Sharma saw a bright red Manchester United Café promotion hoarding. 25% discount on F&B was mentioned for catching the weeknight Manutd’s UEFA Champion’s League match. Mr. Sharma noted this and decided he will come for the game with his football freak buddies coming Wednesday. They did not have time for a leisurely dinner at one of the posh restaurants. So, they decided to have fast food from the various food stalls. Mr. Sharma purchased the prepaid card and the couple went across the stalls for ordering their food. The kids were seated on the tables arranged in the middle of the food court. While fiddling around, Roshan saw the pamphlet of HCL’s ‘Me’ range of laptops on their table. After having their quick dinner, the Sharma’s finally went to watch the 9 o’clock show of Anjaana Anjaani…….
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In this manner, promotion spaces are sold at various locations on the outside and inside the mall. These spaces are rented for promotions to players having stores inside the mall as well as to brands looking to attract eyeballs, which may not necessarily be sold inside the mall. However, most spaces are sold to store owners because the success of the residents would lead to the success of the mall in attracting large numbers.
Temporary Tenants
One of the hottest trends in retail today is temporary retailing. The Concept: Lending of the vacant space of a mall at a lower lease to tenants for a shorter duration. The retailers are invited to occupy either an empty store or a space in the mall. This invitation may be sent through agents or retail publications or even on the websites. Many a times, the retailers invited for this purpose are the ones very popular among the local crowd (e.g. Jumbo King Vada Pav) or those requiring very little space (such as flower vendors and confectionaries) or those looking for a smaller investment to avoid risk (e.g. new entrants, non-local stores making entry into a new city). Sometimes, the space is also lent for organizing events instead of a shop. The concept picked up pace when recession left many a malls vacant due to the soaring rentals and lower sales. The temporary tenants help create a win-win situation for both the parties viz the mall and the retailer. Let us have a look as to how this is achieved. Benefit to the Retailer: The retailer gets the premium space at a lower cost with an opportunity to attract larger number of footfalls. This is a golden opportunity for the new entrants as well as promoters of brands. At the same time, they do not have to commit for a longer duration and thus the risk of failure is averted to a great extent. Other than all this, certain formats or merchandise never
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really need a lot of space or investment. Examples include confectionaries, flower vendors and the recently emerging hair salons, soup parlours etc. These are very nicely catered by the concept of temporary retailing which fulfils all their needs at a low cost. This is also beneficial when they want to “Test the waters” before taking the big plunge. Various strategies may be then used by retailers to attract customers to try out their products including events, exhibitions, lighting, announcements, POPs etc. Benefit to the Mall: Increased footfalls are bonus points when compared to vacant spaces that may tend to put off the existing customers and avoid them from strolling around the mall for a longer time owing to its dull atmosphere. Beyond this, lower revenue is better than no revenue. Another intention behind intentionally lending out some dedicated space within the mall to temporary tenants is providing the customers with what they seek most – variety. Newer assortments every 6 months or so keep the customers interested and make them look forward to visiting the mall again and again without any feeling of boredom. An instant crowd puller to one location is attracting one customer to a halt through showcasing of merchandise in innovative ways, which is bound to pull many others as well simply by looking at the other person stopping for something. Benefit to the customer: Variety is the most important benefit showered upon customers who are seldom satisfied with the existing offering and are constantly on a lookout for something newer. The best temporary tenants share one or more of these characteristics: personalized merchandise, an opportunity for customers to sample the product, and products that can be demonstrated or used to entertain passing shoppers. Offering samples and entertainment appeals to the natural curiosity of shoppers: When one or two people stop to watch a demonstration or try a product, others are likely to stop, too. This mall environment prompts the customers to make bigger purchases. Below is an example of a kiosk set up on a temporary basis by a popular gaming console manufacturer to woo consumers by making them try out the game for free, and thus tempting them for further purchase.
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Supporting Struggling Clients
Why are retailers struggling to manage their business? Some of the reasons can be explained as follows: Modern retailing is all about directly having "first hand experience" with customers, giving them such a satiable experience that they would like to enjoy again and again. Providing great experience to customers can easily be said than done. Thus challenges like retail differentiation, merchandising mix, supply chain management and competition from supplier's brands are the talk of the day. In India, as we are moving to the next phase of retail development, each endeavor to offer experiential shopping. One of the key observations by customers is that it is very difficult to find the uniqueness of retail stores. The problem: retail differentiation. The next problem in setting up organized retail operations is that of supply chain logistics. India lacks a strong supply chain when compared to Europe or the USA. The existing supply chain has too many intermediaries: Typical supply chain looks like:- Manufacturer - National distributor - Regional distributor - Local wholesaler - Retailer - Consumer. This implies that global retail chains will have to build a supply chain network from scratch. This might run foul with the existing supply chain operators. In addition to fragmented supply chain, the trucking and transportation system is antiquated. The concept of container trucks, automated
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warehousing is yet to take root in India. The result: significant losses/damages during shipping. Merchandising planning is one of the biggest challenges that any multi store retailer faces. Getting the right mix of product, which is store specific across organization, is a combination of customer insight, allocation and assortment techniques. The private label will continue to compete with brand leaders. So supplier's brand will take their own way because they have a established brand image from last decades and the reasons can be attributed to better customer experience, value vs. price, aspiration, innovation, accessibility of supplier's brand.
Thus, to brief the above problems into a list: 1. The organized retail industry in India is faced with stiff competition from the unorganized sector. 2. There is a shortage of quality real estate and infrastructure requirements in our country. 3. Opposition to Foreign Direct Investment from small traders affects retail industry. 4. Very high stamp duties on transfer of property affects the industry. 5. Shortage of retail space in central and downtown locations also hinders the growth of retail industry. 6. Presence of strong Pro-tenancy laws makes it difficult to evict tenants and this is posing problems. 7. Land-use conversion is time consuming and becoming complex. 8. For settling property disputes, it consumes lot of time. 9. Rigid building laws makes procurement of retail space difficult. 10. Non residents are not allowed to own property except they are of Indian origin. 11. Prohibition of Foreign investment in real estate business. 12. High Customs duties are levied on import of goods in India. Other than these macro issues which retail sector in India is facing there are some micro issues which affecting day-to-day operations and sales:
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1. People might not be aware of the new arrivals of the brands in the mall. Advertising
and promoting the same on regular basis becomes difficult and expensive too.
2. People might be aware of the products and the brands but sales may not increase
because of low conversion rates.
3. Small reasons like parking space, traffic woes, rail-way mega blocks may impact
decision for shopping in malls on week ends.
4. Retailers tend to keep products which give higher margins to them but these may not
may be same products which customers seek. Many a times people do not find the brands of their choice in the mall. Reason behind such cases might be the inaccurate market research. Although Integrated Marketing Communication will not provide solution to all of retail problems it can certainly help solving some of these. Competition: This is the single biggest factor affecting the retailers both big and small. The problem with retail shops in Mall is there many similar shops selling the same products and product category within that place. So retailers are left with very less chances of distinguishing themselves except they have something very exclusive. To solve this issue retailers have to position themselves in such a way that customers should find something new in their shop. In the products like apparels, grocery, gift articles etc retailers have to keep the preferred brands and excellent service. Many of the retail outlets have failed to face this stiff competition and are either already shut in some locations or have stopped increasing their outlets at all. The biggest concern for using IMC for such outlets in their dwindling finances. The balance sheets of many of today’s retailers find no big budgets to spend on advertising without the solid results from such spending. The competition also punches the margins down leaving retailers struggle hard to manage the balance in revenues and expenses. Suggested Ways in which IMC can be used to increase the sales: Paid articles in the Mumbai Mirror about some events happening in the mall/ retail outlets. Or news of upcoming events in the regional newspapers. Some of the other ways of doing
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promotional activities are retailers can distribute pamphlets at the entrants only containing either what is happening at all the places or making people aware about specific happenings or events. Nowadays digital displays can be kept at the entrances to guide customers and also making them aware of the offers and discounts. Recently there have been trends of announcing the events and offers inside the mall. Such announcements are made between the music which goes on other times. Arranging some of the events for NGOs in the mall bringing forward the commitment towards community aspect. Arranging the Painting or similar art competition in the mall with the help of sponsoring from big corporate which are into these fields. Virtually retailers might not have to shell out any money from their pockets except the space will be occupied for the time period of event which anyway will help generating more foot falls. Digital maps can kept at different places so that people read them and come to know about different shops for their different needs. Use of ambient media / ambient advertising which has great impact on the people viewing the ads. Making such ads from professional agencies may prove very expensive to already struggling retailers. In such cases the ad-making competitions in tier-1 or tier-2 B-Schools may give good results in low budgets. Creative and Actual Making of the advertise are two components in any advertisement. In the solution suggested the creative part may come from spending very less amount. The advertising on floor space, advertising on pillars, putting some attractive structures inside the shop/mall can give good returns not only in terms of money minting from advertised brands but also in terms of increased foot falls. Sponsoring national events is no way possible to retailers facing troubles managing finances. In such cases the control of management can be little decentralized in allowing store managers to decide on the events the store would like to use for promotions within the specified budget. Once allowed the store manager can spend sponsoring on local events such as regional sports competitions, exhibitions or seminars, art shows etc. The winners in such competition can be given. Some of the malls offer club member-ships. These customers can be gifted with seasonal goods which they use outside their homes like umbrellas, car covers (for loyal customers) etc.
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Theme or lifestyle displays using stylized mannequins and props, which are based on a season or an event, are used to promote collections and have to change to keep touch with the trend. The merchandise presentation ought to be very creative and displays are often on nonstandard fixtures and forms to generate interest and add on attitude to the merchandise. To increase the foot falls on the visits of the cutomers to different shops in the mall the malls can keep competitions like Treasure Hunt with attracting discopunts and purchase coupons to winners and runner ups. The game itself is such that it will make people roam in the entire mall and thus will serve the purpose of making them aware of the products and shops in the mall.
Case Study: Southgate Mall – Transforming Experiences
This traditional 1983 mall located in the Sutherland Shire close to south of Sydney CBD, Australia has been transforming, refurbishing and repositioning a retail centre into a popular and profitable venture since decades. It is an excellent example of how professional mall management can deliver beyond the expectations of the consumers to cut through traditional boundaries and set new horizons in the world of retailing. Their strategy has helped them achieve not just immense popularity but a sustainable profitability over the years. About Southgate Mall - The retail property has a total built-up area of 250,000 sq ft. It comprises 58 specialty stores and is anchored by major local department store such as Coles Supermarket, Kmart and Woolworths. Major Transformations by Southgate Mall – 1. 1999–2000 - Southgate embarked on a bold revamp and repositioning programme worth AUD 13 million, aimed at increasing mall traffic, sales and rental value. The responsibility of the revamp was assigned to a professional mall management company. The revamp
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program included complete makeover of the mall premises. This included change in management, repositioning of tenants, addition of a food court, correction of poor sight lines and access, addition of fresh supermarket, new shop fit-outs for all tenants, refurbishment of common areas and ceilings and re-evaluation and redirection of the marketing function. 2. 2006 - an additional 20,000 sq ft of retail space was added to the shopping centre. The mall management firm provided the leasing support to place tenants in the mall. This led to an additional income of AUD 620,000 per annum for the property and potential additional sales of AUD 20 million. 3. Strengthening the Southgate Brand – The mall management firm also undertook a strategic marketing plan to strengthen the overall brand image of the Southgate mall. Emphasis was given on reinforcing the mall’s retail mix alongwith enhanced focus on fresh food provision. Freshworld was launched as a part of this plan. Inception of Freshworld helped increase customer traffic per week by 11.4% compared with the same week a year ago and by 17.7% on the previous week. The increase in foot traffic due to the addition of this store exceeded all expectations, with significant growth being experienced across individual specialty stores. The total centre average unit spend rose 5.4% and reported a moving annual turnover (MAT) increase of 2.8%. 4. Economical Advantage – A sustainable initiative was undertaken alongside to reduce water consumption across the property. The drive enabled the mall to make an annual savings of AUD 12,000. As a result of this, the overall property outgoings were reduced. 5. Expansion Plans – Following the successful implementation of the above initiatives, the mall management firm extended its services to advice on the master planning of the mall. Further acting on the mall management firm’s advice, the adjoining building of about 19,500 sq ft was acquired, with the objective of further expanding Southgate’s retail mix and enhancing the mall’s food court. Since the completion of the original development, Southgate has witnessed high levels of occupancy, ensuring continued growth in income revenue. This portrays how a professional mall management company can deliver continued growth and performance through quality management services. The Southgate mall example presents how effective management can lead to sustained incremental growth for both parties viz the mall and its tenants. Only on achieving
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sustainable and profitable advantage for the clients and the customers can a mall pave way for its overall success, the result of which is unprecedented growth and success.
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doc_234570274.doc
Documentation explains about IMC in mall management
Retail Management Project: IMC in Mall Management
[Type text]
Table of Contents
Selling Retail Space to Retailers..............3 Developing and Positioning Mall as a Brand......................................................6 Organizing Promotional Events..............10 Promotional Space Selling (Situation). . . .15 Temporary Tenants...............................19 Supporting Struggling Clients................21 Case Study............................................25
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Selling Retail Space to Investors
Space selling in retailing is concerned with the space available at MALLS, SUPERMARKETS, HYPERMARKETS etc. this job is responsibility of a mall manager he is required to utilize the maximum space he can for shops or merchandise available. The retail space selling or selling spaces in malls to investors much depend on what business or product line the retailer or shop owner is going to sell. If the retailer has previous experience of having shops in the mall, he may well consider exactly where in the mall is he getting the place. Investors also look spaces which not only suffice their current business needs but also prospects of growing business. Some of the factors which investors consider and hence should mall owner while selling or leasing out spaces are: 1. Traffic Patterns – If mall is far away from busy areas rent or sell value will decrease. 2. Previous Tenants – If the sales history of previous owner is known and is not that attractive it affects the selling value of that space. New buyers try to find out why the previous owner left. 3. Cooperative Marketing – If few of the retailers can come together to place their ads in the mall in such a way that all of them are benefited from it. 4. Foot falls – Buyers weigh the benefits of guaranteed foot traffic at a mall location against premium rent and hence mall owner should consider the foot falls before fixing the rent or value for the space. 5. Common Space of Malls available to tenants- Buyers consider how much common space is available to all the tenants. 6. Mall Timings- timings of the mall have great impact on the space in the mall which is getting sold. Also are the timings for all the tenants same matter. 7. Competitors- Tenants take great efforts to find out their competitors and understand their business pattern. If some of these competitors are already there in the mall or have great chance of starting in the near time it will have impact on the selling value. Some of the lease agreement do provide guaranteed protection against the competition. 8. Liability Causes in the agreement – It is better to have clear wordings and without any confusion in the lease or sell agreement to avoid the litigation later on.
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9. Facilities and Charges- Seller should consider what all facilities like heating, air conditioning, first aid, security etc he is providing and these are of what quality. 10. Insurance Clauses - Insurance clauses impact the selling value of the mall spaces. Some of the mall owners ask for a percentage of sales in addition to the monthly lease payment. For such an arrangement to be worth it, mall owner should guarantee the minimum foot falls and low penalties for leaving lease early. Mall owners should consider square footage, utility, lease terms and property taxes as well as length of the lease. There should be clear mention of the conditions for renovation, painting etc. There might be some incidences where retailers may want to shift to some other places within the mall. Most of the malls spaces are sold on 30-Day move out clause in the agreement if the buyer is not satisfied with the space. This means the tenant gives the notice period of 30 days before leaving out the place.
Mall owners should consider what type of ambience does the mall have in targeting what type of people. For example Lifestyle may attract middle class customers but Shoppers Stop targets upper middle class crowd. Some of the facilities which can value up the selling are music played in the mall, centralized as well as portioned music and AC, air ducts, floor tiles type, escalators and free space available
To sell the mall space at good value the mall owner should not only consider which all things make location and space the best for selling but also what makes them worst. To understand what makes a bad location you need to consider things such as access to the shopping centre, ease of exiting the shopping centre, distance between anchor stores, whether the shopping centre caters to walkers or drivers, visibility of the space during each of the four seasons (do trees cover up the store signage in the spring), safety of the centre, availability of marquee signage, etc.
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Integrated Marketing Communication and Space Selling In Mall: Considering the IMC in mall, the space selling means advertising the spaces which are sold to investors. The factors which impact this space selling are:
1. Foot falls: The exposure of the advertisement is proportional to the foot falls which
mall attracts. Hence the mall which is in busy areas and which gets good number of foot falls every week sells the spaces at the premium rates. 2. Place of Putting the Ad: The place at which the advertisement is put up varies the cost. Generally the ads which are placed at prominent places like entrance, on escalators, near anchor stores demand high premiums. 3. Lighting: This factor impacts the cost as malls pay electricity bills at the commercial rates and lighting condition has great potential to attract the crowd and the attention of the people. 4. Size of the Ad: Naturally the bigger ads costs the buyers/investors/clients more. Also the material by which the ad is made and the material on which it is placed impacts the final cost. Generally the common place in the mall where the advertisers choose to place the ads are mall floors, escalators, the common area between the stores, the central area of the mall structure is round, the lifts, payment counters.
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Developing and Positioning Mall as a Brand
Positioning a mall refers to defining the category of services offered based on demographics, psychographics, income levels, competition in neighbouring areas and extensive market research of the catchment. For example, if the market research indicates that the average number of households living in a particular area belongs to the upper middle class, then a high-end retail mall would suit the location. An example of this practice can be seen in the upcoming malls, Select City Walk in Saket and DLF’s Emporio in Vasant Kunj. We believe that these retail developments are prime examples of good mall positioning. These malls have been specifically designed after an extensive market research, based on the catchment area of South Delhi. The malls provide high-end luxury products catering to the elite class (socioeconomic classification A and B consumers) residing in South Delhi. Positioning also refers to the location of the shopping mall. A good location defined in terms of factors like: ? Ease of access via roads, ? Good visibility ? Crowded Area ? Shopping area in vicinity, etc.. are considered as one of the prime pre requisites for a mall. Although other activities such as trade/tenant mix can be revisited or redefined, the location remains fixed, making it an imperative factor for a mall. To ensure that a mall attracts retailers and consumers, professional mall management is a necessity. The mall market is an extremely competitive one, having a high degree of internal and external competition, the latter being from established high-street locations across all cities. To lure retailers and consumers to its mall, a developer has to ensure that their property follows the best practices in the market especially in terms of mall mgmt.
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Define a clear mall positioning statement: A Mall that caters to high volume and low margin players would have different anchor and tenant strategies as compared to a mall catering to the youth. Global research into consumer shopping behaviour has shown that browser category shoppers tend to spend 15% more unplanned money, however are less likely to develop mall loyalty. So called “destination” shoppers visit a mall for a particular good or service and get locked in for longer periods of time and frequencies. However destination shoppers leave home with a particular destination in mind say a children’s area or a book store etc..A mall visit is about spending time rather than only money and positioning to your target segment allows you to create a destination through tenants, public spaces and entertainment mix. More than half of buying power rests with two types of shoppers: “Navigators” — independent, creative types who shop for what they’re passionate about — and “Social Seekers” — who also love shopping but look to others for validation. We need to target these effectively and for that we need to build a mall which is a brand by itself. This can be done by various means. Hence we need to study the following things on launching a mall to position it as a brand in the customers mind: ? Catchment Analysis: Demographics of the customers in that area and their consumer behavior ? Competitor’s Analysis: Studying Competitor mall in the same area as to how well it is functioning and how their strengths and weakness is impacting the performance of those malls. Location pros and cons and lessons which are to be learnt and changes to be accommodated in our mall. ? Advertising the mall through medium which directly reach the target group e.g.: TV, newspapers, magazines, radio, etc.. ? Sponsoring occasions like ganpati in that particular area
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? Location: Choosing a location which is prime and which has good visibility especially during evening traffic.
A great example of such a mall is the Forum Mall:Forum Mall is located at Koramangala, a prosperous and high density catchments area and a mere 10 minutes from Brigade Road, is 4 and half acres of main road abutting land that will soon house Three and a half lakh square foot of pulsating entertainment and brand penetrating retailing all under one roof.
Such a positioning has made this mall the most favorite of all in Bangalore. It was the first one to come up in the area and there were many more which came up in the same area but could not beat Forum Mall because of the brand it has created of itself. Lack of clear mall positioning- theme, trade mix and target audience, can lead to the following: The location, catchment and shoppers profile are different for different malls hence just imitating the competitors can lead to a goof up. Important is to analyze other mall mistakes and make sure we learn from it before we promote our mall. A visit to the mall is many things to many people. For some, it means watching the latest flick at the multiplex; for others, it’s window shopping. Some go to shop, while others simply fill contest forms or test drive the latest car parked in the lobby. It hasn’t been more that three to four years since India adopted the worldwide shopping model called ‘Shoppertainment’— entertainment integrated with retail. Currently, the market size of shopping malls is estimated to be Rs 40 crore. This is expected to grow up to Rs 400-500 crore in the next four to five years, according to industry sources. These hot destinations for consumers are also hot spots for advertisers. There are two factors that determine the popularity of a mall:-
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? First is the location of the mall. ? Second, the brands that house in a mall.
Entertainment destinations like multiplexes and grocery sections add value to the mall. Good registered brands who want to hit hard on the customer prefer advertising in a mall. These are brands which have focus and want the target audience to see and absorb the message. But this message to reach the TG of the mall. Hence the mediums used to brand a mall should effectively communicate the brands that the mall encompasses to add reputation to the mall and convert the mall itself into a brand. Inorbit Mall in malad and Forum Mall in koramangala, banglore are the best examples of this. The print Ads given and fliers distributed in catchment area should well include the big brands that the mall is associated with, which will leave an impact on the minds of the customers. Advertising the mall in the right place, through the right medium to reach the right target audience is of utmost importance,, to position a mall as a brand.
Organizing Promotional Events
What is it? There are several marketing strategies to build a strong and successful business. Most of these strategies are simple but not always easy, however if they are coupled with vision, vigour and a little persistence, both business and life can be enjoyed with ease and results produced in a shorter term. One such critical part of effective marketing is "Promotional Events". A promotional event is quite simply an event that intended for the purpose of promotion of your products. In this case, our product is our mall. Hence, any event held in the premises of
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the mall in order to increase footfalls to the mall as a whole or promote a particular brand housed in your mall will be a part of the promotional event. The event can be used to generate revenue however generally it will only generate a nominal amount of revenue. This type of event itself is designed for promotion and sales rather than increasing bottom line. As mentioned above, promotional events in a mall can be of the following 2 types: Mall Level Mall event is primarily targeted to promote footfalls to the mall as a whole. Some examples are movie launches; book launch, some movie / TV shooting, contests, food festivals, handicraft exhibitions and celebrity visits etc. The idea is to create a buzz for the mall by organizing such crowd puller events in your premises. At the same time, your partners (the stores and brands housed in your mall) will invite their clients to your event because it provides value and serves them to do so. Hence, for the benefit of your clients, your event should be valuable to their existing clients, that is, your customers. By studying the stores and brands of your mall, and their needs properly, the strategic partners will gladly invite their existing clients and potential clients for the sheer benefit it is to him/her and him/her business. It's a win-win situation for everybody. Brand Specific Brand specific events are the ones organized by brands housed in the mall in the premises of the mall. The advantage for the brands through such events is firstly to increase visibility of the brand and thus the sales by attracting more customers; while that for the mall is increased footfalls, increased visibility and revenue earning through space rent. Many brands such as Funskool, Mattel, L’Oreal, Camlin etc. have opted for such events. The recent national level Rubik’s challenge 2010 is an example of a brand specific event organized by Funskool at Inorbit mall in Mumbai.
Why so important? Have you ever shopped in a store or a mall that was dull and boring? You may not even recall the name of the mall because it was simply uninteresting. As a retailer, you don't want your
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customers to consider your mall as a dry place to be. A great way to avoid becoming mundane is by strategically planning promotional events for your mall. One survey showed that 83% of people feel more comfortable buying a product they have seen demonstrated. The figure below shows the impact of in-store events vis-à-vis other promotional tactics. Mall promotions are a step ahead to launch it for the entire mall rather than restricting it to a particular store.
How to go about it? Intention The first step to organizing promotional events is to know the intention behind organizing it in the first place. These reasons may vary from occasion to occasion such as opening of the mall, new store / product launch, product promotion, festival, revamping the business etc. Depending upon the intention and importance, all the other aspects shall be decided viz. the budget, time, scale etc. Scale The scale of the event may vary from a small one to an extremely extravagant one, depending on your comfort level and competency in hosting it. Be sure to make it large enough that it is worth it to you and your business. The best way to do this is to analyse your close ratio and
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look at your projections of sales to determine how may attendees you need to produce a desired result. If you haven't done this pre - homework, you may have to test a few events to see what's right for your bottom line. Occasion The occasion for the events may be decided based on the purpose (such as a launch or a premiere date or a festival). If a special day is too far to wait, go ahead to declaring your own holiday or event. There are many unusual celebrations such which are often organized by malls. Some of these are as Humorists Are Artists Month (March) and Happiness Happens Month (August), special days, weeks and months as well as holidays, historical anniversaries and festivals. The bottom-line is – do not let a marketing opportunity pass by. Managing Glitches This is the most crucial aspect of the promotional event. All your efforts, money and reputation may go down the drain if glitches occur on The Day. Hence, detailed planning for mitigating such incidents needs to be carried out. Security forms the foremost concern for all events, especially in case of involvement of a celebrity. Other issues that need to be taken care of range from logistics management to crowd handling etc. Many companies therefore have a separate event planning department for this purpose, while many others outsource the planning and organizing to event management companies. Few Tips • • • • • Choose a promotion that fits your industry, target audience and goals. Maintain a calendar of all planned and actual promotional events. Don't forget to include local community events in the planning. Try to schedule events 3-6 months in advance to create an effective promotion. Create a folder for each event to maintain records and review the final results.
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•
Increase your open-to-buy and purchase extra inventory for special events.
Promotional Space
In order to understand how promotions can be made in malls, it is essential to identify the places where promotions can be made effectively. Outside Promotions: Wall Billboards Parking place Waiting area for the lifts Indoor Promotions: Lobby Kiosks Lift boarding and alighting area Rooftop hanging placards Giant screen Reception Food court Considering the successful models of malls in India, the following is a description of how mall promotion spaces are created and used effectively. It’s a Sunday. With India’s growing prowess in the service and technology sector, the middle class of India has blossomed into a high spending consumer segment. The Indian nuclear family on a weekend outing to the mall has become an increasingly common sight. The Sharma family residing in Lokhandwala, Andheri (W) decides to visit the City Mall located on the Malad Link Road (5 kms from their place). Mr. Sharma is an executive with a consulting MNC and Mrs. Sharma is a nursery teacher. The children, Roshan and Sia, are 12 and 8 respectively. After a not too distant journey of half an hour, they reached the city mall at 5 pm. From
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about 100 metres, they can spot the huge glowing City Mall sign board. There is a small queue at the entrance for car parking. Roshan spots the outdoor hoarding of the 3 movies currently playing at PVR Cinemas inside the mall. The three movies are Wall Street, Anjaana Anjaani and Popeye – the Sailor Man. Mr. Sharma knows no one apart from him would be willing to watch Wall Street, Mrs. Sharma and Sia are desperate to watch Anjaana Anjaani and so, Roshan is forced to go along with them even though he wants to see his Popeye’s travails again. They enter the mall premises and try to find some parking space in the open parking area. A huge hoarding of Zara, Gap & Nautica (premium brands in the mall) greets them as they alight from their car. However, there is no parking available and hence, they make their way to the multi-storey car park. They finally find a parking space on Level 2. They make their way towards the lift boarding enclosure on their parking level. While waiting for the lift, Mrs. Sharma glances towards the 10 Best Seller books showcased in the shelf with a nice gold coloured inscription of the Oxford Bookstore (Level -1) highlighted above. Little Sia also sees some cuddly soft toys kept on the window shelf on the other side and tells her mom that she wants to visit this ‘Toy Nation’ in the superstore. When they board the lift, the doors of the lift shut and they can see a nice ambient media campaign of a young college teens coming closer and their eyeballs go to the words ‘Paas Aao Na’ – Close up. On the roof of the lift, there is a ceiling mounted LCD. They catch the advertisement of the new Volkswagen Vento and the Blackberry Boyz in their brief stay in the elevator. At the lobby of the mall, they are mesmerised by the colours they witness on the Giant Screen at a distance. The screen is playing the commercial of the new Sony Monolith Television and then they hear a faintly audible sound which confirms ‘It’s a Sony’. They find the mall reception to their left. They approach the receptionist who gives them a warm smile. She answers their queries regarding the locations of the shops the Sharmas wish to visit, gives them suggestions of places they would like in the mall and hands them a mall layout. Roshan notices a very similar looking family depicted in the LCD screen at the
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reception. He watches this 1 minute video of their day at the mall as the words ‘Shopping, Entertainment, Fun’ light up the screen. As they walk a little further, they wonder why there is such a gathering of crowd. Mr. Sharma then point out to the giant gong and people waiting for their turn to hit it with the monster hammer. Oh, it’s the ‘Thums up – Kitna Hain Dum’ Challenge. Branding personnel from Thums up have set up a temporary kiosk for promotional purposes. Then, the inquisitive Roshan looks up again and finds his favourite football stars on Nike placards hanging from the roof. He makes a note in his mind to check out the new Manchester United Nike football and somehow convince his dad to buy it. First they bought the tickets to the movie from the ticket kiosk at the lobby level. The theatre, however, was located at level 3 in a separate section of the mall. The kids wanted to visit the candy shop that they had heard so much about from their school friends. As they took the escalator to level 1, their eyes were greeted with sumptuous pictures of the varieties of candies on a backlit advertisement board that cannot be missed. After completing their quota of visiting the stores they had decided and some more windowshopping, they decided to have their food. The food court and restaurants were located at the last level. They were a tad tired and so decided to take the elevator. As soon as the elevator doors opened, Mr. Sharma saw a bright red Manchester United Café promotion hoarding. 25% discount on F&B was mentioned for catching the weeknight Manutd’s UEFA Champion’s League match. Mr. Sharma noted this and decided he will come for the game with his football freak buddies coming Wednesday. They did not have time for a leisurely dinner at one of the posh restaurants. So, they decided to have fast food from the various food stalls. Mr. Sharma purchased the prepaid card and the couple went across the stalls for ordering their food. The kids were seated on the tables arranged in the middle of the food court. While fiddling around, Roshan saw the pamphlet of HCL’s ‘Me’ range of laptops on their table. After having their quick dinner, the Sharma’s finally went to watch the 9 o’clock show of Anjaana Anjaani…….
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In this manner, promotion spaces are sold at various locations on the outside and inside the mall. These spaces are rented for promotions to players having stores inside the mall as well as to brands looking to attract eyeballs, which may not necessarily be sold inside the mall. However, most spaces are sold to store owners because the success of the residents would lead to the success of the mall in attracting large numbers.
Temporary Tenants
One of the hottest trends in retail today is temporary retailing. The Concept: Lending of the vacant space of a mall at a lower lease to tenants for a shorter duration. The retailers are invited to occupy either an empty store or a space in the mall. This invitation may be sent through agents or retail publications or even on the websites. Many a times, the retailers invited for this purpose are the ones very popular among the local crowd (e.g. Jumbo King Vada Pav) or those requiring very little space (such as flower vendors and confectionaries) or those looking for a smaller investment to avoid risk (e.g. new entrants, non-local stores making entry into a new city). Sometimes, the space is also lent for organizing events instead of a shop. The concept picked up pace when recession left many a malls vacant due to the soaring rentals and lower sales. The temporary tenants help create a win-win situation for both the parties viz the mall and the retailer. Let us have a look as to how this is achieved. Benefit to the Retailer: The retailer gets the premium space at a lower cost with an opportunity to attract larger number of footfalls. This is a golden opportunity for the new entrants as well as promoters of brands. At the same time, they do not have to commit for a longer duration and thus the risk of failure is averted to a great extent. Other than all this, certain formats or merchandise never
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really need a lot of space or investment. Examples include confectionaries, flower vendors and the recently emerging hair salons, soup parlours etc. These are very nicely catered by the concept of temporary retailing which fulfils all their needs at a low cost. This is also beneficial when they want to “Test the waters” before taking the big plunge. Various strategies may be then used by retailers to attract customers to try out their products including events, exhibitions, lighting, announcements, POPs etc. Benefit to the Mall: Increased footfalls are bonus points when compared to vacant spaces that may tend to put off the existing customers and avoid them from strolling around the mall for a longer time owing to its dull atmosphere. Beyond this, lower revenue is better than no revenue. Another intention behind intentionally lending out some dedicated space within the mall to temporary tenants is providing the customers with what they seek most – variety. Newer assortments every 6 months or so keep the customers interested and make them look forward to visiting the mall again and again without any feeling of boredom. An instant crowd puller to one location is attracting one customer to a halt through showcasing of merchandise in innovative ways, which is bound to pull many others as well simply by looking at the other person stopping for something. Benefit to the customer: Variety is the most important benefit showered upon customers who are seldom satisfied with the existing offering and are constantly on a lookout for something newer. The best temporary tenants share one or more of these characteristics: personalized merchandise, an opportunity for customers to sample the product, and products that can be demonstrated or used to entertain passing shoppers. Offering samples and entertainment appeals to the natural curiosity of shoppers: When one or two people stop to watch a demonstration or try a product, others are likely to stop, too. This mall environment prompts the customers to make bigger purchases. Below is an example of a kiosk set up on a temporary basis by a popular gaming console manufacturer to woo consumers by making them try out the game for free, and thus tempting them for further purchase.
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Supporting Struggling Clients
Why are retailers struggling to manage their business? Some of the reasons can be explained as follows: Modern retailing is all about directly having "first hand experience" with customers, giving them such a satiable experience that they would like to enjoy again and again. Providing great experience to customers can easily be said than done. Thus challenges like retail differentiation, merchandising mix, supply chain management and competition from supplier's brands are the talk of the day. In India, as we are moving to the next phase of retail development, each endeavor to offer experiential shopping. One of the key observations by customers is that it is very difficult to find the uniqueness of retail stores. The problem: retail differentiation. The next problem in setting up organized retail operations is that of supply chain logistics. India lacks a strong supply chain when compared to Europe or the USA. The existing supply chain has too many intermediaries: Typical supply chain looks like:- Manufacturer - National distributor - Regional distributor - Local wholesaler - Retailer - Consumer. This implies that global retail chains will have to build a supply chain network from scratch. This might run foul with the existing supply chain operators. In addition to fragmented supply chain, the trucking and transportation system is antiquated. The concept of container trucks, automated
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warehousing is yet to take root in India. The result: significant losses/damages during shipping. Merchandising planning is one of the biggest challenges that any multi store retailer faces. Getting the right mix of product, which is store specific across organization, is a combination of customer insight, allocation and assortment techniques. The private label will continue to compete with brand leaders. So supplier's brand will take their own way because they have a established brand image from last decades and the reasons can be attributed to better customer experience, value vs. price, aspiration, innovation, accessibility of supplier's brand.
Thus, to brief the above problems into a list: 1. The organized retail industry in India is faced with stiff competition from the unorganized sector. 2. There is a shortage of quality real estate and infrastructure requirements in our country. 3. Opposition to Foreign Direct Investment from small traders affects retail industry. 4. Very high stamp duties on transfer of property affects the industry. 5. Shortage of retail space in central and downtown locations also hinders the growth of retail industry. 6. Presence of strong Pro-tenancy laws makes it difficult to evict tenants and this is posing problems. 7. Land-use conversion is time consuming and becoming complex. 8. For settling property disputes, it consumes lot of time. 9. Rigid building laws makes procurement of retail space difficult. 10. Non residents are not allowed to own property except they are of Indian origin. 11. Prohibition of Foreign investment in real estate business. 12. High Customs duties are levied on import of goods in India. Other than these macro issues which retail sector in India is facing there are some micro issues which affecting day-to-day operations and sales:
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1. People might not be aware of the new arrivals of the brands in the mall. Advertising
and promoting the same on regular basis becomes difficult and expensive too.
2. People might be aware of the products and the brands but sales may not increase
because of low conversion rates.
3. Small reasons like parking space, traffic woes, rail-way mega blocks may impact
decision for shopping in malls on week ends.
4. Retailers tend to keep products which give higher margins to them but these may not
may be same products which customers seek. Many a times people do not find the brands of their choice in the mall. Reason behind such cases might be the inaccurate market research. Although Integrated Marketing Communication will not provide solution to all of retail problems it can certainly help solving some of these. Competition: This is the single biggest factor affecting the retailers both big and small. The problem with retail shops in Mall is there many similar shops selling the same products and product category within that place. So retailers are left with very less chances of distinguishing themselves except they have something very exclusive. To solve this issue retailers have to position themselves in such a way that customers should find something new in their shop. In the products like apparels, grocery, gift articles etc retailers have to keep the preferred brands and excellent service. Many of the retail outlets have failed to face this stiff competition and are either already shut in some locations or have stopped increasing their outlets at all. The biggest concern for using IMC for such outlets in their dwindling finances. The balance sheets of many of today’s retailers find no big budgets to spend on advertising without the solid results from such spending. The competition also punches the margins down leaving retailers struggle hard to manage the balance in revenues and expenses. Suggested Ways in which IMC can be used to increase the sales: Paid articles in the Mumbai Mirror about some events happening in the mall/ retail outlets. Or news of upcoming events in the regional newspapers. Some of the other ways of doing
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promotional activities are retailers can distribute pamphlets at the entrants only containing either what is happening at all the places or making people aware about specific happenings or events. Nowadays digital displays can be kept at the entrances to guide customers and also making them aware of the offers and discounts. Recently there have been trends of announcing the events and offers inside the mall. Such announcements are made between the music which goes on other times. Arranging some of the events for NGOs in the mall bringing forward the commitment towards community aspect. Arranging the Painting or similar art competition in the mall with the help of sponsoring from big corporate which are into these fields. Virtually retailers might not have to shell out any money from their pockets except the space will be occupied for the time period of event which anyway will help generating more foot falls. Digital maps can kept at different places so that people read them and come to know about different shops for their different needs. Use of ambient media / ambient advertising which has great impact on the people viewing the ads. Making such ads from professional agencies may prove very expensive to already struggling retailers. In such cases the ad-making competitions in tier-1 or tier-2 B-Schools may give good results in low budgets. Creative and Actual Making of the advertise are two components in any advertisement. In the solution suggested the creative part may come from spending very less amount. The advertising on floor space, advertising on pillars, putting some attractive structures inside the shop/mall can give good returns not only in terms of money minting from advertised brands but also in terms of increased foot falls. Sponsoring national events is no way possible to retailers facing troubles managing finances. In such cases the control of management can be little decentralized in allowing store managers to decide on the events the store would like to use for promotions within the specified budget. Once allowed the store manager can spend sponsoring on local events such as regional sports competitions, exhibitions or seminars, art shows etc. The winners in such competition can be given. Some of the malls offer club member-ships. These customers can be gifted with seasonal goods which they use outside their homes like umbrellas, car covers (for loyal customers) etc.
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Theme or lifestyle displays using stylized mannequins and props, which are based on a season or an event, are used to promote collections and have to change to keep touch with the trend. The merchandise presentation ought to be very creative and displays are often on nonstandard fixtures and forms to generate interest and add on attitude to the merchandise. To increase the foot falls on the visits of the cutomers to different shops in the mall the malls can keep competitions like Treasure Hunt with attracting discopunts and purchase coupons to winners and runner ups. The game itself is such that it will make people roam in the entire mall and thus will serve the purpose of making them aware of the products and shops in the mall.
Case Study: Southgate Mall – Transforming Experiences
This traditional 1983 mall located in the Sutherland Shire close to south of Sydney CBD, Australia has been transforming, refurbishing and repositioning a retail centre into a popular and profitable venture since decades. It is an excellent example of how professional mall management can deliver beyond the expectations of the consumers to cut through traditional boundaries and set new horizons in the world of retailing. Their strategy has helped them achieve not just immense popularity but a sustainable profitability over the years. About Southgate Mall - The retail property has a total built-up area of 250,000 sq ft. It comprises 58 specialty stores and is anchored by major local department store such as Coles Supermarket, Kmart and Woolworths. Major Transformations by Southgate Mall – 1. 1999–2000 - Southgate embarked on a bold revamp and repositioning programme worth AUD 13 million, aimed at increasing mall traffic, sales and rental value. The responsibility of the revamp was assigned to a professional mall management company. The revamp
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program included complete makeover of the mall premises. This included change in management, repositioning of tenants, addition of a food court, correction of poor sight lines and access, addition of fresh supermarket, new shop fit-outs for all tenants, refurbishment of common areas and ceilings and re-evaluation and redirection of the marketing function. 2. 2006 - an additional 20,000 sq ft of retail space was added to the shopping centre. The mall management firm provided the leasing support to place tenants in the mall. This led to an additional income of AUD 620,000 per annum for the property and potential additional sales of AUD 20 million. 3. Strengthening the Southgate Brand – The mall management firm also undertook a strategic marketing plan to strengthen the overall brand image of the Southgate mall. Emphasis was given on reinforcing the mall’s retail mix alongwith enhanced focus on fresh food provision. Freshworld was launched as a part of this plan. Inception of Freshworld helped increase customer traffic per week by 11.4% compared with the same week a year ago and by 17.7% on the previous week. The increase in foot traffic due to the addition of this store exceeded all expectations, with significant growth being experienced across individual specialty stores. The total centre average unit spend rose 5.4% and reported a moving annual turnover (MAT) increase of 2.8%. 4. Economical Advantage – A sustainable initiative was undertaken alongside to reduce water consumption across the property. The drive enabled the mall to make an annual savings of AUD 12,000. As a result of this, the overall property outgoings were reduced. 5. Expansion Plans – Following the successful implementation of the above initiatives, the mall management firm extended its services to advice on the master planning of the mall. Further acting on the mall management firm’s advice, the adjoining building of about 19,500 sq ft was acquired, with the objective of further expanding Southgate’s retail mix and enhancing the mall’s food court. Since the completion of the original development, Southgate has witnessed high levels of occupancy, ensuring continued growth in income revenue. This portrays how a professional mall management company can deliver continued growth and performance through quality management services. The Southgate mall example presents how effective management can lead to sustained incremental growth for both parties viz the mall and its tenants. Only on achieving
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sustainable and profitable advantage for the clients and the customers can a mall pave way for its overall success, the result of which is unprecedented growth and success.
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