Indian malls have cracked the ‘how to attract the customer’ code. They have transformed into family entertainment centres, providing shoppers with the best of in retail, fun and food. They have morphed into theme malls, offering inviting and intriguing experiences to draw people in.
In this era of burgeoning e-commerce retail, malls are reinventing the physical experience, and shoppers are spending long hours in these malls to eat, shop and be entertained.
With the increasing spending power – owing largely to an increase in disposable income – the modern shopper is progressively experimenting with taste and requirements. This change in behavior and evolving purchasing habits of the younger generation globally has led to a disruption in the way malls operate.
“The manifestation of social media, rise of emerging markets, sprouting aspirational youth and a growing sense of ‘brand-consciousness’ are propelling the wheel of growth of luxury sector in India. Consumers are becoming aware – and vocal – about their lifestyle, and looks, and are bold enough to experiment with different fashions, silhouettes, colour and fits,” writes Prem Dewan, Retail Head, OSL Luxury Collections Pvt Ltd-Corneliani.
“Their shopping preferences are no longer dependent on fit or colour of the product; they expect an experience at the boutiques. Also, there is a wider target audience residing in Tier II and III cities that have the propensity to buy luxury goods and are emerging as new reservoirs of luxury spending,” he goes to say.
Trying to cater to the aspirational consumer, malls are increasingly introducing bridge-to-luxury and luxury brands in India. Mall owners – quick to identify an opportunity in luxury retail – started going the whole hog in their efforts to increase footfalls by launching full-scale luxury malls.
2008 saw the launch of India’s first two luxury malls – DLF Emporio in Delhi and UB City in Bangalore. The move was welcomed by luxury retailers, giving them the right space to set up shop and the perfect clientele to cater to. And although the growth has been slow, with luxury occupying just a fraction of retail space in India, malls are taking the category seriously.
What Makes a Mall a Luxury Mall?
To be on top of the popularity chart, a mall needs to fulfill all aspects of the luxury quotient. The average lifespan of a shopping mall design is about seven years globally. It may exceed by two-three years more in Tier III and IV cities, but for Tier I and II cities, the period is definitely shrinking. This means that shopping centers built before 2007 probably don’t provide the amenities and shopping environment or international fashion brands younger, more affluent consumers are seeking. Newly built malls are way ahead in sale, footfalls and popularity than the older ones. Even the rate of renting space is much higher in these malls.
For luxury malls, providing extravagant services to their patrons is of utmost importance and they need to start planning right from the architecture stage. The buildings are stunning, elegant with generous spaces both on the exterior as well inside, with large spaces earmarked for stores.
Top of the line entertainment options, fine-dining restaurants and leisure components – coupled with the best in technology – are crucial in the making of these malls.
While brand names matter in luxury retail in India, luxury malls globally have gone a step ahead to provide the best in class entertainment to visitors. There are malls that have roller coasters, indoor water parks, five-star hotels with luxury suites, snow parks, spas and other features to relax, re-align and re-energise.
West Edmonton Mall in Canada – which is counted amongst the top luxury malls in the world – is home to the world’s largest indoor water park. It also features the world’s largest wave pool, an 83-foot-high slide and a children’s play park area. Adding to this is an indoor lake that is home to four sea lions, an ice rink and an 18-hole miniature golf course. Visitors can also try indoor shooting range, watch a movie, or spend some time at the Ed’s Recreation Centre, which houses a bowling alley, a music stage and arcade games.
The mall also features GalaxyLand, the indoor park is home to 24 rides and attractions, including a triple-loop roller coaster, a 3D Theater and a number of thrill rides. It even houses an inter-domination chapel, where hundreds of couples have gotten married since the mall opened in 1981.
Despite being one of the top retail destinations in the world, India still has to play catch up to the variety in luxury offered globally. The country only has only few luxury malls to boast of, including DLF Emporio and The Chanakya in Delhi, UB City in Bangalore, Palladium in Mumbai, Bergamo in Chennai, and Quest Mall in Kolkata.
Here are some factors that make a mall a luxury mall:
– Niche Geographies
Location is an extremely important parameter and goes a long way in deciding the kind of audience a mall will be able to attract. Luxury malls need to find prime locations with the right socio-economic strata of people, so they can attract a strong and discerning clientele.
Luxury malls require a large area to accommodate every possible brand under its roof. The ambience, dining, phygital experience, comfort and service should be of world class as shopping in these mall is preferred mostly by the elite customers.
In fact, it may not be incorrect to say that the future of luxury malls will be shaped by the kind of brands they bring in (brand heritage), exclusivity, the customer relationships they build, and whether they manage to find the correct location in high-growth areas.
– Comfort & Convenience
One downside for luxury malls for the well-to-do is that they constantly need to update their offerings to appease all those discerning buyers searching for the hottest brands. So, they are constantly brainstorming on ways to keep shoppers entertained. At the base level of that initiative is creating a space that shoppers actually want to be in and providing them with the best of convenience and amenities, along with seven-star hospitality services like a huge parking area supporting multiple entries points to avoid crowds and congestion, a concierge and a VIP arrival area.
Shopping centres also look to provide a ‘mall essence’ that puts consumers at ease, makes them feel comfortable, encourages them to stay longer and, more importantly, persuades them to return. New malls can meet or exceed these needs and consumer expectations by creating iconic “shoppertainment” locations apart from providing the best of facilities.
– The Best in Entertainment
Entertainment is everything. And in a luxury environment, it is more than that – it has to be uber-creative and super innovative. Visitors get and bore weary if the mall presents them similar kind of facilities and activities on every visit. Apart from kid zones and theme parks which are fixtures, malls need to cater to the sensibilities of the local community. This is usually done by celebrating local festivals, cultural initiatives and holding events at regular intervals for discerning patrons.
Luxury malls also usually include features like outdoor plazas, amphitheaters, and outdoor fine-dine food court terrace, adding value to their offerings.
– Personalization & Technology
Luxury in its very essence thrives on exclusivity and personalized experiences. Technology, albeit impersonal, has proven to be a strong ally in the recent past and an asset that luxury brands and malls can’t ignore.
The Challenges of Being in the Business of Luxury in India
As per a report published by Technopak, India doesn’t have the culture of luxury brands on high streets because of safety and security issues. That’s the reason why most luxury brands in India are housed in the shopping arcades of five-star hotels. The monthly rent of these outlets would be Rs 600 to Rs 1,000 per sq. ft, say industry sources. Finding a real estate at an ultra-posh locality for building these malls is a very tough task.
– Cost and Time
The cost of construction of a luxury mall is almost three times more than a regular mall, in respect to the amount of the return. It takes three to five years to build a luxury mall and the average cost for overall development (excluding the land cost) in Mumbai and Delhi is in the range of Rs. 7,000-9,000 per sq. ft, compared with Rs 4,000-5,000 a sq. ft for a normal mall, as per real estate developers quotes published in the report. The rental for a luxury mall ranges from Rs 500 to Rs 1,500 a sq. ft per month, while regular malls charge much lower.
In conclusion, the Indian shopping industry is shifting gears and a sudden upsurge in urbanistaion of society has led to major demands for expansion of city centres on grounds of retail, fashion, F&B, and entertainment – all of which need to be handled with proper planning and infrastructure. Considering the country’s projected GDP growth and rise in disposable incomes, mall developers are hopeful that the luxury market will evolve with time.