Armed with a phygital strategy, malls hope for an early rebound
With the pandemic still ongoing and several restrictions in place, malls in India are once again grappling with low footfall. Despite the festive season rush, in FY21 they managed to rake in only 50-55% of the revenue earned in FY20, as per the Shopping Centres Association of India (SCAI). Besides, the lockdowns last year as well as in the current year have slowed down the construction of malls in tier II and metro cities. “Several launches planned last year have been postponed or delayed due to a cash crunch,” informs Mukesh Kumar, chairman, SCAI, and CEO, Infiniti Malls.
Mall owners hope to regain consumer confidence, anticipating a better FY22, as and when the vaccination drive gathers momentum. The industry had been off to a good start until the second wave hit. Pushpa Bector, executive director, DLF Retail, shares that in 2020, segments like athleisure casual wear, international luxury and F&B did well, with revenues reaching upto 80-90% of pre-Covid levels. This year, in addition to these, segments like health and fitness in the later half of the year could help restore retail fortunes.
In FY21, the overall mall industry saw 70% footfall compared to FY20. From January to March 2021, several malls had witnessed a surge, clocking in 85-90% of pre-Covid level revenue. Mall owners and retailers seem better prepared this year, with many launching cloud kitchens and deliveries. DLF, for instance, is augmenting its Lukout app. “We plan to launch several new features this year, including Lukout Closet with refreshed content, and connect with brands directly for purchase fulfillment via the digital bridge provided by Lukout,” says Bector.
Select Citywalk’s personal shopping initiative seems to be taking off. “Last year, personal shopping through video calls did not garner much attention. During the second wave, however, we witnessed 80-100 orders a month through video calls,” says Yogeshwar Sharma, CEO and executive director, Select Citywalk. He expects the beauty segment to be the fastest to rebound, along with athleisure and casual fashion, once lockdowns are eased.
Gurvineet Singh, CEO, Viviana Mall, says it has been interacting with customers through its loyalty programmes and omnichannel connectivity in real time. “We have enabled cashless payments at our food court and restaurants. In collaboration with a few start-ups, we have created apps to enable paperless shopping and operations at the mall.”
Malls have also discounted rents for retailers by 50%; some are veering towards replacing the fixed rental model with a business sharing model.
Future of malls
Following adequate precautions will be crucial as malls open up to the public again. Pinakiranjan Mishra, sector leader – consumer products and retail, EY India, adds, “It is a question of safety. While India lacks the culture of strict compliance, no more lip-service shall do. Malls will need to put in stringent protocols such as automatic infrared cameras with high-tech filtration systems.”
Last year, malls had launched initiatives like click and collect and curb-side pick-ups to ensure safe shopping. “The phygital model is going to evolve. Retailers will have to transition to online because consumers will still shop online with virtual shopping assistance,” says Rajat Wahi, partner, Deloitte India.
The general consensus is that although footfall is likely to remain low given the sluggish vaccination drive, physical malls will always find takers as long as they offer a compelling consumer experience. “As malls are all about the experience, the future lies in premium Grade A malls. In the coming years, Grade A malls will become more exclusive and experiential, while smaller malls might face a tough time,” says Bector.