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Malls adopt innovative strategies to attract consumers

By Sujata Sachdeva

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Retail

According to a recent CBRE South Asia study, India has more than 300 shopping malls, but only around 24 have been identified as successful, including DLF Emporio, High Street Phoenix, DLF Promenade, Select Citywalk, to name a few. Select Citywalk, for example, is currently 98 per cent occupied. Its tenants include Mango, Zara, Aldo, Sephora and Tommy Hilfiger and it is currently in talks with foreign brands like H&M, slated to open its first Indian store by mid-2015.

On the other hand, non-performing malls are introducing various initiatives to attract footfall. They are offering loyalty schemes as well as, services like free parking, free home deliveries and so on. And they are asking non-performing retailers to vacate space for the new entrants as fashion savvy Indian consumers seek foreign brands.

New initiatives to woo customers

Now with American labels like GAP and the Children’s Place as well as Japanese label Uniqlo readying to make a foray into the country, while existing ones looking at expanding footprint, battle for premium spaces in malls is bound to get worse. And malls failing to attract enough attention are going all out to bring performing brands, department stores as well as customers by offering premium services.

Malls or their tenants are even paying attention to the soundtracks played at their stores. They now play peppy and popular sound tracks to keep the consumer engaged, which in turn can lead to higher sales. Music played at stores has now moved from old favourites like Kenny G to Pharrell Williams, Daft Punk, Arctic Monkeys, 5 Seconds of Summer and other pop and rock hits.

For instance, India's largest department store chain Shoppers Stop has changed its in-store soundtrack to communicate the brand message as well as drive consumers to spend. Even Mumbai's High Street Phoenix mall, which houses over 150 brands, now plays different varieties of music in specific zones as well as live performances of artistes belonging to different genres. What’s more…malls and big retail chains are hiring specialists to design playlists to match the values of the brand and the imagery. While Phoenix gets its collection put together by experts in Hong Kong and Singapore, Shoppers Stop's playlists are selected by Blue Frog.

Offers to hook premium brands

Other than customers, malls are busy attracting premium foreign fashion brands. They are going an extra mile to woo such labels by offering them space at their own terms and conditions. For instance, while Spanish brand Zara opened its first store in Delhi's Select Citywalk mall in 2010 by paying an advance security deposit for the space, the things are not the same today. Now when Zara signs up a contract with a mall owner anywhere in the country, the latter not only agrees to revenue sharing model but also provides fit-outs and floorings.

Success of foreign labels like Zara, Mango, Promod and Aldo has given them an upper-hand over small retailers. The DLF Mall of India in Noida, for example, has given six-year lease contracts to small shops and nine years for large and international players. Pacific Mall in west Delhi too has followed the similar strategy for different brands. It would now provide a short-term lease periods between five and six years to test less popular brands, however brand like Forever 21, would get longer lease terms.

Establishments such as hypermarkets, multiplexes and international brands that are able to attract good number of visitors enjoy easier leasing terms, becoming the preferred retailers for most malls and in some cases, malls are also bending the rules if they desperately want a brand or retailer to open a shop under their roof. Mall owners are now awaiting entry of H&M, GAP and Uniqlo, which would be given space on the ground floor to woo customers and become the next anchor stores for many of these malls.

Shoppers Stop