Challenges faced by Retail Brands at Indian Malls

Mostly once the stores are leased out, the developers are not worried about the promotion any more. Though a few malls organize some in-house promotional activities but that alone doesn’t guarantee a good footfall.
Majority of the developers don’t pay attention about the branding, marketing, promotions, budgeting, financing as part of running a mall. This affects the overall footfalls in the mall, and thus the business of the retailers.
The retailers are given a lot of importance to sign in the mall but later on not considered as an integral part of mall.
With over 100 malls operating in India and more than 300 being developed, the opportunities offered in the retail landscape are immense. Mall space is expected to touch 60 million square feet by end-2010. With such a huge supply of space, mall owners and developers in India need to focus on vision, scalability and processes and create a distinct proposition for themselves in the market. The emergence of specialty malls is a step in this direction.
Retailers today face many challenges, including increasing competitive pressures, thin margins, high occupancy costs and unpredictable supply base that come in the way of their attaining operational efficiency and profitability. In the mall they not only deal with additional super area loading but also the additional CAM expenses.
As organized retail grows, the market will only become more competitive and developers will have to work hard to differentiate. Faulty mall management along with inappropriate tenant mix would lead to poor mall traffic and closure of individual stores in malls. Professional third party mall management service providers are hence likely to come to the fore. They not only understand these business challenges, but also have the ability to help retailers effectively deal with them.
Generally there are two types of consumers who visit malls – focused buyers and impulse buyers. The time spent by focused buyers inside the mall is relatively lower as compared with impulse buyers who spend a lot of time window shopping. Malls which have entertainment zones and/ or promotional activities have larger foot falls and more percentage of impulse buyers. Mall management becomes critical to attract impulse buyers. For example, Ansal Plaza in Delhi has ensured its success through good promotional events and mall management practices since its inception in 1999. Its amphitheater which is dedicated to promotional activities has ensured footfalls despite newer malls coming up in the NCR region.
Contrary to popular misconception that mall management is synonymous with facility management, mall management actually takes care of the issues like:
- positioning
- zoning (tenant mix and placement within mall)
- promotions and marketing
- facility management (infrastructure, footfalls, ambiance)
- finance management
Various business models are adopted by retailers/ developers while utilizing the services of a
There are very few mall management companies in India at present. Large real estate developers and retail chains either have their own mall management divisions or have contracts with international consultants. In developed markets mall management is an established independent service line. Till recently contract model was the norm in India. But the revenue sharing model is increasingly becoming popular with retailers in India due to the present economic situation.
India is yet to embrace the concept of third party mall management in retailing. Some of the issues could be:
- Planning the mall around anchor tenants
- Lack of market research by developers
- Tendency to lease out on a FCFS basis
- Perceive outsourcing as additional cost
- Lack of accountability for in-house promotional activities
- Improper planning for space (lack of parking space, single entry/ exit points)
With the slowdown of the realty sector, developers might give the mall management practice a thought in order to ensure that the slowdown does not affect its footfalls. Mall market in India has become extremely competitive especially due to the sudden boom in the real estate sector. Malls have come up in the Tier II cities and rural areas as well albeit in a smaller and different format. With increasing competition from high street retailers, developers are finding it difficult to achieve 100% occupancy rates.
A specialist’s retail property management skills enable property owners to receive the benefit of master planning and development expertise which is critical to ensure that malls are strategically positioned for long-term growth and success.

How a retail shopping mall can be transformed into a brand? So that people recognize it with its name, and same is repeated later in other cities at other locations. But for that principle A to Z is being retailer friendly.