The big bad world of malls!

Written by Suhel Seth | Updated: Jan 27 2005, 05:30am hrs
There is an urge for almost every Indian brand to rush to the nearest mall: to shop for the newest and perhaps wealthiest customer. But in this rush, many are forgetting some convenient mall lessons. The first of them being that not all those who visit malls do so in order to shop. A country which is typically starved of entertainment options suddenly looks at malls as a remarkable outing for the whole family at almost no price unless, of course, you are picky about even paying parking!

India has another historical problem with malls, which is not going to disappear all that easily. Our malls are being built to take advantage of a real-estate boom and not necessarily a shopping boom, which is why I am pretty amused at the mushrooming of retail seminars that are supposedly helping India and Indian managers come to terms with the retail boom. Where on earth is the retail boom Take Gurgaon, for example, which is the mall capital of India. Almost 82% of the revenues in all these malls are generated from movies and food rather than Tommy Hilfiger and Dockers.

Which is what I guess the real problem with India will always be. We are a checkout nation: we checkout pieces and then checkout of the store. Rarely will we make a purchase without checking the competitive scene. And therein lies the problem.

The behaviour of an Indian consumer is not conducive to malls. For three reasons. First, we dont have multi-shop options to scour for the same kind of product since one mall will perhaps carry only one brand of home furnishings. Second, we are convinced that if a shop is in a mall, then the pricing is loaded and we are paying for that shops rent and infrastructure costs, not to mention the air-conditioning. Third, we believe mall choices are very limited.

The problem with malls is anchored in our sociological evolution, which is about being seen at prices that we can afford. Hence, a boy-meet-girl solution is a more affordable option at a mall rather than at a fine dining restaurant, and this is exactly what is happening if you carefully observe the age groups that are infesting malls.

We are talking about young people with large hearts and small wallets invading these malls merely to meet their date or find one. This is supplemented by the fact that the mall is still an honourable alibi compared to Joggers Park or Lodhi Gardens, hence the concerns about being seen at a mall are far less than outside. But this lesson somehow doesnt seem to have gone down well with mall owners. Which is why the rents they charge the retail outlets are out of whack and will never help those shops make money in the short-term. Thus, I personally see several winters of discontent as far as revenues are concerned for those who believe in moving their businesses to malls at the kind of transfer pricing they have to move them at.

The other issue with malls in India is there has been limited branding of malls, save for Crossroads in Mumbai and, to a little extent, the DLF malls in Delhi. The Sahara malls will be plagued by the down-market imagery at times of the mother brand whereas brands like DLF will gain sharply from the stellar reputations they enjoy. But the time has come for malls to look at themselves as brands, much as store brands have so brilliantly done, be it a Food World or a Big Bazaar or a Shoppers Stop, and their success has been anchored in the fact that they have been able to provide a clear and consistent benefit to the customer; used communication as a tool to attract the right kind of footfalls and ensure the perfect product mix at the right price.

The fact that malls have looked upon themselves to be parasites that will feed on the image of brands that rest within their abode is incorrect and has very sparsely worked across the world. Closer home, CK Tang represents a store whereas Lucky Plaza (both in Singapore) represents a poor mans shopping delight or, for that matter, the malls in Hong Kong, be it Pacific Place or, for that matter, the malls in Kowloon. These have stitched together an identikit, which makes them easily identifiable with a certain type of consumer and also thus attracts the right kind of brand mix.

The time for malls to think consumer instead of cost per square per foot has arrived. It is only this that will enable their transition from mere commodities to well-loved brands!

The writer is CEO, Equus Redcell