There is a shift of consumers and demand from tier-II and III cities to tier-III and IV cities. Read on...
In conversation with Franchise India, Manoj K. Agarwal, CEO, Viviana Mall shares his years-long expertise and tells us why there is a sudden shift of retail industry has taken place from tier-I, II cities to tier-III, IV.
Agarwal says, “I am basically involved with shopping malls and retail business since 2006, which is about 13 years in the industry.”
Changes that the retail industry has undergone over the years
Agarwal shares his 13 years experience in the industry and all the changes that he has witnessed in his words.
He says, “When I joined in the industry there was a lot of misunderstanding between the developers and the retailers because nobody had understood the model of the other. So the developers would want to charge a huge amount of money in terms of rent and the retailers would be resisting that. It was a difficult and one-sided type of approach from both the parties. Since the concept was new, so no one actually was willing to understand each other’s point.
After the inflation hit in 2008, things started settling down and now we see developers understand what the retailers want or the retailer understands where the developer is coming from in terms of what their business model is and what they can afford. Retailers also know what the developer’s investment is and what kind of return they expect and how they function basically. I think now they are settling down and understanding as well as respecting each other’s work and worth in the growth of the industry.
Now technology coming into shopping centers and retail business, which has improved the connectivity with the customers, in terms of reach to customers, mobile, mobile apps, digital marketing as well as in-store experiences like you can try the virtual model of cosmetics, clothes or gears before actually buying it, these all have majorly changed in the past 10-12 years.
If you look at the back-end, a huge amount of data analysis has taken the center stage to understand the customer preferences, changing dynamics in the industry better. I think Loyalty has become a top priority in malls, which was missing earlier.”
Factors that shape the trends of the retail business
Agarwal points out the following factors that shape the trends of retail business in whole:
Now the focus of retail business and shopping centers is basically to attract more and more customers, retain them and give them a good experience and make sure that they return.
A major shift towards tier-III and IV cities
Agarwal noticed the shift of consumers and demand from tier-II and III cities to tier-III and IV cities. He points out the reasons as “Better connectivity through roads, availability of the internet, mobile apps and mobiles have made sure that people from any part of the country is well connected and updated with latest discoveries in the retail segment. Other than that not all brands are available in the tier-II and tier-III cities, they too are looking for space through which they can go and retail industry and shopping centers are providing them the opportunity.”