How shopping malls are strategizing to reach customers ahead of the festive season

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September 21, 2020 7:02 AM

The strategy now revolves around malls going to customers

indian economy, economic revival, GDP, festive season, GST e way bill, petrol diesel sales, electricity, power demandThe upturn in the Indian economy may persist in the coming one-to-two months, before settling at more sedate levels after the festive season is over.

Although the Centre allowed malls to reopen in June, several of them continued to remain shuttered due to the localised lockdowns. In Maharashtra, for instance, malls could reopen only in August. According to a report by Anarock Retail and Retailers Association of India (RAI), shopping malls saw a 77% degrowth in sales in June, as compared to the same period last year; whereas high street sales witnessed 61% degrowth.

Mall owners are finally seeing a 35-50% recovery in footfall August onwards. However, industry watchers say malls will remain impacted as their key traffic driver — multiplexes — are yet to open. A low appetite for out-of-home food consumption, too, has meant lower footfall in malls. As a result, malls are now looking at alternative sources of revenue.

As per Shopping Centres Association of India, there are 650 large shopping centres and 1,000 small shopping centres in the country at present.

Closer to consumers

Shopping malls are adopting the omnichannel model to tide over the lull in sales. Naviin Ibhrampurkar, head of marketing and corporate communications, Inorbit Malls, says the strategy now revolves around malls going to customers.

Inorbit Malls, part of the K Raheja Corp, currently operates five malls in West and South India. Under the ‘Inorbit on the Move’ initiative, launched in Bengaluru, it is taking select retailers to residential societies. The company is also helping its retailers reach customers through video calls and assisting in home deliveries and curbside pick-ups. The mall plans to roll this service out in other cities soon.

DLF Malls, meanwhile, has launched new features on its Lukout app — the Lukout Closet to showcase look-books by various brands, and a Shop Assist feature that connects customers directly to the store manager. The company has added another feature that gives a real-time status on the traffic in the mall. The Lukout app has five lakh downloads, of which 60-70% are active users, as per DLF Malls.

Both these malls have offered a relief on rentals to their retailers. Inorbit has done so based on the category the retailers are operating in. “Electronics, for instance, is already seeing 95% of last year’s sales; hence, they don’t need support anymore,” says Ibhrampurkar.

Meanwhile, DLF Malls had waived the minimum guarantee (MG) rent for its retailers in the first quarter (April-June). “Since we are seeing footfall resume in the second quarter, we are giving a waiver of 70% on MG rent to F&B companies and 50% to the retailers,” says Pushpa Bector, executive director, DLF Retail. In the third quarter, the company plans to reduce the waiver.

A few malls are also tying up with food aggregators and other apps. DLF Malls has partnered with inresto, restaurant tech platform Dineout’s b2b arm, while Inorbit Malls is looking to tie up with Zomato. Nexus Malls has roped in offline technology platform DotPe to provide contactless dining solutions to its F&B partners. The feature is available in its malls in Ahmedabad, Chandigarh, Amritsar and Bhubaneswar.

Awaiting revival

The Anarock-RAI report predicts a better third quarter for shopping malls, owing to the upcoming festive season. Around 75% of the respondents in tier II and III cities indicated that they plan to visit a mall in the next three months, the report states. The festive season, however, will also bring in challenges for mall owners. Instilling confidence among consumers about safety measures being implemented inside the mall, will be crucial.

Apart from ensuring crowd control and social distancing, Anuj Kejriwal, CEO and MD, Anarock Retail, says malls will have to compensate for the absence of promotional events, which usually drive up footfall during the festive season, by launching highly creative online promotions.

Ensuring that shops within malls, especially in the smaller towns, remain afloat in this period of crisis is paramount. “Malls in the bigger cities can replace a retailer if he exits; but those in the smaller towns cannot afford to lose a retailer, as the number of retailers there is limited,” says Abheek Singhi, senior partner and managing director, BCG.

Besides the festive season optimism, mall owners are hopeful that the government may soon allow theatres to reopen, which could further boost footfall.

Read Also: Why brands across categories are launching their own e-commerce sites

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