LuLu Group International is a diversified entity. Keeping its retail division as top priority, LuLu Group operates in hypermarkets, shopping malls, imports and exports, trading, shipping, IT, travel and tourism and education. With an annual turnover of over US$ 6.9 billion (about Rs 44,160 crore) and staff strength of over 40,000, LuLu Group is considered a major player in the economic scenario of the Middle East.
Since its launch in 2013, LuLu Mall has transformed the way Kerala shops. Being the first avenue for large scale organised retail in the state, LuLu has been able to stay far ahead of the competition across the state. Shibu Philips, Business Head of LuLu Shopping Mall, believes in an age where with soaring customer expectations, if a company can create satisfied customers, retention becomes instinctive. Excerpts from the exclusive chat…
Describe the journey of LuLu Mall, one of the largest mall in India in terms of area? What are the challenges and difficulties– from real estate to technology – that you had to face when you came up?
Currently completing five years of operations, LuLu Mall is spread across four storeys occupying more than 2.5 million sq.ft. Of space in 17 acres. When we launched the mall in 2013, we had 75 percent occupancy and the challenge of bringing best brands to an unexplored market of Kochi was immense. Today we are 100 percent leased with 223 operational stores and 25 kiosks. We have launched over 75 brands for the first time in Kerala and we continue to attract brands who want to explore the southern market. The LuLu Hypermarket– at about 2,00,000 sq. ft. – is the go-to store for both premium and low-income customers for the variety it offers at international standards, and that too at affordable price. Our patrons enjoy luxury of cinematic experience at PVR Gold, with a 9-screen multiplex and then there is the 55,000-sq.ft. Entertainment zone including trampoline park and an ice staking zone.
Sustaining the momentum of the mall and recording steady growth has not been easy and we faced several challenges. The building codes had to be made from scratch, due to the absence of any prior model to look up to in the Kerala market. Environmental clearances, lack of local labour, the 60 percent rainfall the state receives were the challenges that we were able to overcome successfully. The biggest challenge most malls are facing today is change in rules which lack consistency. Approvals are taking time, parking policies are changing, and malls are forced to pump in more money on security, making any law and order situation happening within its premise the mall’s issue rather than being the state’s responsibility as well. The common infrastructure of the state is not able to catch up with the fast pace of development.
What’s your location strategy? Why Kochi?
When we decided to enter India, we chose our home town Kochi, a Tier II city for the launch. The mall is strategically located on Edappally Junction with four entrances. The centre is strategically located at an intersection of two major highways, making it accessible to all the residents in the neighborhood. LuLu is on an expansion mode globally and in India, two mall projects are under construction – Lucknow and Thiruvananthapuram. We understand that the opportunity that lies in Tier II markets.
What, according to you, are the key elements that will determine the success of your mall?
Right Brand Mix: We constantly try on including the stores that the customers respond to. Though our anchor store that drives traffic is still key, a curated mix will help us in making all our zones active. With online shopping thriving by the day, malls must aim at
providing uniqueness. This must be done through a well-planned entertainment zone and the best F&B brands.
Customer Engagement: We always believe in extending the relationships with customers. Through social media, app and as well by our loyalty program which has 1,50,000 + members we have created deeper bonds. Customers like to get rewarded, and with various online activities we make them happy by giving away goodies and gifts.
Better Customer Experience with Services & Events: Malls are getting closer to the customers by understanding the pulse of the customers. At LuLu mall, we multimate levels of convenience like valet parking, pram, butler etc. Customer incentive programs,
international performances and campaigns add more to the list of value-added elements.
Let’s talk innovation – both tech and in-store. What has LuLu done in this field and what are you planning over the next one year to keep consumers coming in?
LuLu’s Loyalty Program has helped to establish a direct relationship with the customers, going beyond each visit to the mall. Shoppers can use their smartphones to scan purchase receipts in exchange for points that can be redeemed against gift vouchers.
We are also in our final stage of incorporating Geo-fencing and ANPR (Automatic Number Plate Recognition) to our LuLu Loyalty Program.
Apart from this, we have designed a PGS system (intelligent parking guidance) that suits all types of car parking areas. Regardless of the parking space size, the system ensures customers find a space by guiding them directly to it, in real time. We have also recently incorporated ‘puzzle parking’, considering the heavy footfalls the mall garners.
Tell us about the phygital experiences, personalisation strategies, and intelligent technologies that LuLu offers its consumers?
We all know that it’s important to think outside the box. Creating a positive and lasting memory in the minds of the customers will get people talking, tweeting and sharing to their friends and family for days to come. Phygital marketing helps us to see consumers in real life, interact with them and give them an opportunity to feel included, acting as ambassadors for us. We also believe in having a ‘first-hand experience’ with the customers, by giving them a satiable experience that they would like to enjoy again and again.
LuLu’s Loyalty Program has helped establish a direct relationship with customers, going beyond each visit to the mall. Shoppers can use their smartphones to scan purchase receipts in exchange for points that can be redeemed against gift vouchers – one of our best phygital experiences.
Is there a need for Omnichannelisation of malls? Your views.
Without doubt, e-retail is on a steady trajectory in India, and so are professionally run malls. From the basket, offline will get certain percentage of the share and online will get theirs. And if we can find common ground, no one benefits more than the customer. Several online retailers like Chumbak and Zivame have now chosen to be present within malls, having understood the importance of being tangible for the Indian customers. Shopping Centers are also reaching masses through various e-programs. But when it comes to feel and touch like food & entertainment, the customers must come and visit us. People value a lot of relations, individuals want to experience the services first hand. We create loyal service which creates human bonding.
You’re obviously doing a lot to keep your consumer engaged. Tell us more about your shopping mall’s customer centricity ideas are different from others.
Focused marketing is the need of the hour and it’s important to provide customers with an experience that meet their individual needs. ‘Blanket targeting’ shoppers with generic schemes and incentives will not be sufficient. Today’s customers crave for tailored, consistent and convenient service and to stay on top, one should provide just that making us stand out from others. Marketing is the art of attracting and keeping profitable customers. It is a proven fact that the top 20 percent of the loyal customers often generate 80 percent or more of a firm’s profits. Interacting with customers, developing loyalty programs, personalizing marketing are key activities that could be used to build customer loyalty.
The highlight for us in 2017 were events like LuLu Football Challenge, celebrating and encouraging football in the country; LuLu Fashion Week, where brands showcased their best collections and launched their collections with a number of celebrities, LuLu Beauty Fest – a weeklong Beauty Fest with exciting offers from over 100 brands, free makeovers, offers on beauty & wellness products and also the LuLu Beauty queen gets featured in the mall magazine name LuLu Happiness, LuLu Flower Fest, Lulu Little stars – a talent show for kids, LuLu Digex – a digital expo.
Apart from this, you are also heavily into CSR activities…
Under LuLu Smiles, we have been doing a lot of CSR activities on health awareness and social campaigns. Blood Donation, eye check – up, vaccination camps, BMD screening and diabetes check-up and consultation on World Diabetes Day are some of the initiatives that was done by LuLu.
Are you also environmentally responsible? What are the key ecological considerations that you kept in mind while building the mall?
We have been very ecologically aware while designing and building all our malls. LuLu Mall in Kochi has been undertaking several environment friendly steps right from the construction stage. The building has been fitted with opaque walls, which
will radiate lesser amount of heat, thus helping to save energy w.r.t the HVAC systems.
We have a well-equipped sewage treatment plant which helps us to recycle the water for the daily operation of the mall. A rain water harvesting system with near to 10 lakh litres capacity is another measure undertaken by us towards a greener tomorrow.
As a policy, we ensure effective garbage separation is done at all collection points and we have invested in a wet waste de-compost machine to convert waste to manure. We have also ensured that all our lightings are LED, to minimise consumption.
What’s your take on zoning in a mall?
Zones give consumers a sense of order and a curated mix makes the zone active. LuLu Mall primarily caters to the premium and mid-premium brands in all categories. Our ground floor gives an exposure to international brands which includes premium brands in luxury, beauty, fashion etc. The first floor has the finest selection of men, women and unisex fashion. The second floor has kids fashion, value products, mobile & accessories, sports brands and the cinema.
Do brands prefer to come to you or do they look more at high streets and why?
Both individuals and families are looking for avenues to spend time with their loved ones, to shop, watch a movie and engage in other recreational activities. Only a mall can provide this in a safe and organised manner with plenty of options under a roof. Since we can generate a larger number of footfalls, I feel brands prefer coming to us.
International brands share the major limelight in the malls. Do you think homegrown brands should be also given more space and value?
It is very important. In every region, there are some homegrown brands which are people’s favorite, running highly profitable businesses. However, they lack a vision of adaptation of technology and processes. Considering the popularity of these brands, malls do give them a red-carpet welcome with very lucrative rentals and location. The second generation puts in a lot of effort to adapt to an organised retail format and promote the brand to compete with any other national brand.
Maharaja Bhog, Calicut Paragon, Liso Chocolatier in the food sector; Mantra in ladies ethnic wear, Make-up studio; Ajmal Perfumes in beauty & wellness; Crocurry.com in home improvement; MCR in the apparel sector are some of the regional brands which we have at LuLu. Smaller regional retailers can also be accommodated in a kiosk model.
Elaborate on the importance of food courts and the role F&B plays in generating footfall in malls?
Food & entertainment sets brick-and- mortar ahead of e-retail by giving it a destination value. The working class has increased exponentially over the years and so has the number of people eating out. F&B at Lulu Mall itself has recorded a growth of 21 percent. New cafes have been introduced across the mall as a means for a casual F & B option while shopping. Lulu Mall has various international and national flavors with the likes of South African brand – Galitos, Maharaja Bhog, The Yellow Chili, Anjappar Chettinad Restaurant along with Cold Stone Creamery etc. Soon we are going to open Punjab Grill and Pizza Hut express as well.
What is the importance and benefit of being a Family Entertaining Centre (FEC) instead of a mall.
LuLu Mall, being the first avenue for large scale organised retail in the state, we have been able to stay far ahead of the competition across the state. We keep generating various new factors because of which LuLu has become a melting pot of fashion, food, culture and entertainment. Once you create a destination value, you automatically cater to families.
Tell us about the role that hospitality plays in generating footfalls?
Shoppers today have the choice between visiting the mall or to buy it online. Hence to lure customers to store, there must be more than retail offerings. We have added photo opportunities as a key element in the décor. Customers enjoy clicking and sharing it on the social media platforms has turned out to be a major hit.
Service does not pertain to only well-trained staff, but also to the ambience created through the music played, temperature control, lighting, innovative services provided and more. In the organized sector, the importance of visual merchandising and in store design cannot be emphasized enough. Innovative store frontage welcomes new customers and ensures top of the mind recall. We do daily audits where the entire mall is covered through extensive questionnaires and the analysis done by operational managers to let us know whether the mall is faring well. LuLu Mall employs several different technologies to engage with customers and potential customers through social media.
What does the future of retail hold for the malls of tomorrow?
India is a market where e-commerce is far from taking away brick-and-mortar model. With many big players acquiring like-minded small retailers, the clutter in retail is being avoided and brands can get a firm foothold in their respective segments. Food is bound to get more prominence from the current occupancy of 10-12 percent in a mall to atleast 30-35 percent; entertainment which is normally limited to only one FEC and cinemas will evolve. More concepts like Bounce, VR, AR is expected to find space within malls. The use of technology will ensure more customised experiences for customers through beacons, digitalised fitting rooms and more.
What is the future of real estate in India?
Real estate is considered as a premium industry and hence the interest on loans is also very high. Now, with the introduction of GST and adoption of e-payments, We are hoping that the retail real estate industry will witness a better change.
How do you plan on drawing customers and then retaining them in 2018?
The easiest way to grow your customers is to not lose them. A holistic marketing philosophy coupled with the best services is the chance of outperforming the competition. And the cornerstone of a well-conceived marketing orientation is strong customer relationships. Consumers are more educated and informed than ever, and they have the tools to verify companies’ claims and seek out superior alternatives. In an age where customer expectations are soaring, if a company can create satisfied customers, retention becomes instinctive.
LuLu Loyalty program: Most retail and mall establishments run their own loyalty programs. However, in most of them, less than 50 percent of the entire loyalty base is active and redeeming rewards within the loyalty offerings. Using the right medium to offer the loyalty programs is vital to its success. It is a known fact that the dramatic influence mobile phones has had, not only on retail, but on all daily personal activities is going to continue to increase. Therefore, building a mobile first loyalty program proved critical in customer retention strategy for us. Driving offers, bill submissions, managing points and posting communications through mobiles, has turned out to be convenient to the customer, but also helped maintain an active loyalty base.
Personalising marketing: We create a strong bond with customers by individualising and personalising relationships. Not surprisingly, the right technology is an increasingly essential ingredient for this purpose. Maximising customer satisfaction means cultivating long term customer relationships. The vital skill of gauging customer satisfaction requires a working knowledge of marketing research coupled with sensitivity for customer concerns.
What is your vision, future plans?
We are an international retailer in Middle East and South Asian countries and we control more market and future malls in India – Thiruvananthapuram, Lucknow, Vizag, Hyderabad, Bengaluru are as per international standards. We want to ensure that we are present across India in the shopping mall category.