THE MALL MATRIX

With a new wave of evolution taking place in the shopping industry, the geographical domain of malls can make or break the business. As much as malls have changed the way people meet, greet and eat, the strategic locations of malls define their success. With over 10,000 footfalls at prominent malls during weekends alone, the reach favours franchisers.

“Mall stores are allowing us to expand our consumer base in comparison to high street stores. Customers can leisurely browse through the collections as well as place orders for custom made pieces. Operational costs are also taken care of,” says Vijay Jain, CEO and Director, ORRA.

The Essential Elements

As Kumar defines it, “A demographic overview of the area, age, income and households becomes important for a franchiser to post good profits in high street, but the malls have a different story. Customers have several options to compare and buy, and many times customers who visit malls for leisure indulge in unplanned purchases. Malls in business-centric areas always boost sales.”

Luxury fashion group Bogineni’s chairman, Jagadeesh R, says the concept of a mall has changed from retailing to now include restaurants, cinema halls, etc. “Franchising in a mall helps franchisors to expand in small markets like Tier II or Tier III cities, which makes it a preferred destination where one can find as many as even 500 brands under one roof,” he says. The problem though is that shopping malls may lose customers if surface parking is not provided.

“Across the globe, Walmart or even Metro Cash & Carry do not provide multi-level or basement parking. Suiting the needs of the customers, mall developers must address this concern,” he suggests. Jagadeesh adds that malls in mixed neighbourhoods of residential and commercial should focus on essentials, apparel and retail to increase traffic and boost sales.

Pulling the Crowd

Shopping in a mall has become a lifestyle choice and patrons don’t just go to malls with one purpose, opines Bengaluru-based Garuda Mall owner Uday Garudachar. He says the onus is on mall developers to attract the crowd, although franchisers have to extend great offers, discounts, and new launches to sustain the interest of shoppers. At Garuda Mall, the average footfalls on a weekday number 5,000, which increases to 10,000 during weekends.

Commenting on the trend, Garduachar says, “It is now ‘shoptainment’, which means a package of food, shopping and entertainment. A mall should be packed with action to generate traffic and boost sales.” It is also a lot to do with location and ideally malls generate business only in central business districts (CBDs). “Population, density, lifestyle and spending capacity becomes important in area-centric malls. In CBDs, however, the footfalls and density are high, which maximises business. For instance, we experimented with small-time retailers and high-end multiplex Inox at Garuda Mall in Jayanagar in Bengaluru. Both failed and eventually we had to introduce a convenience store such as a hypermarket to make good business. Subsequently, Inox also reduced its ticket rates and fell in line,” he informs.

As for products, women’s wear, apparel, gaming zones and restaurants are still the profitable categories in malls. But what is worrying is the increasing rental cost in malls. “There has to be a way to bridge the gap so that it doesn’t affect sales. The right location can help or hurt the franchisers,” he says.

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