The panel comprised thought leaders from the shopping mall and retail industries including:
– Alok Tandon, Chief Executive Officer, Inox Leisure Ltd
– Ashwin Puri, Co-Founder & CEO, Lake Shore India;
– Dalip Sehgal, CEO, Nexus Malls;
– Riyaaz Amlani, CEO & MD, Impresario Handmade Restaurants
– Vishak Kumar, CEO, Madura Fashion & Lifestyle (MF&L), Aditya Birla Fashion and Retail Ltd. (ABFRL).
The panel was moderated by Anuj Kejriwal, MD & CEO, ANAROCK Retail Advisors Pvt. Ltd.
Anuj Kejriwal introduced the topic of discussion by explaining the current situation saying, “We are here to talk about how we keep our retail industry safe, healthy and insulated and we will try and do that with a true partnership approach. Hence, it is important that we are reasonable with our partners, collaborate across the supply chain, and involve our business models to face the time ahead.”
Excerpts from the question- answer session:
What are the best practices other countries are following and what are the learnings that we could bring to India from there in this current situation?
Dalip Sehgal, CEO, Nexus Malls: Most industries will see major
changes and shifts in SOPs. Outlook towards business, shifts in customer patterns, categories, cost efficiency are the few major things that will make an impact. We as an industry need to look after each other and be reasonable with our partners for costs for survival in phase I and II. The following 4S formula will be a solution to many challenges:
– Safety: Safety and security of consumers and employees must be paramount.
– Secure: Need to work regain trust and confidence of consumers.
– Supply & Merchandising: Need to focus on supply and sufficient merchandising stock for customers.
– Source: Need to focus on ‘Live inventory’.
Is there going to be an evolution in the way retail spaces are designed and what steps can we take to put in place those safety standards? What is the cost implication of these changes?
Vishak Kumar, CEO, Madura Fashion & Lifestyle and ABFRL: We need to look at this situation in time frames. There is a time frame when we reopen and then the entire industry will have to over-manage the transition. Consumers are looking forward to a contactless shopping experience. Brands are also focusing on their e-commerce business which will have an impact on offline business, hence new norm will come in business which focuses on cost efficiency and retailers will seek help from mall operators, landlord etc. The industry will also have to accept and find solutions to the new norms related to social distancing and other safety measures.
How will the new distance policy/situation have an impact on F&B?
Riyaaz Amlani, CEO & MD, Impresario Handmade Restaurants: The interesting thing is that most restaurants actually work on 30-40 percent occupancy. There will be a huge impact on the industry as we were the first ones to shut down voluntarily when the virus started to spread. A huge challenge awaits us when the lockdown will be over. Now, we will have to build more spaces between the dining and other seating arrangements. We will have to introduce ‘no contact process’ and the digital menu is the only option in this situation. Sanitizing the cutlery will require more manpower as well and will add costing of additional cutlery too. Keeping as much distance will also require manpower to keep hotels, restaurants, F&B outlets hygiene will increase the cost against lower revenue. This will also help regain customers trust.
How do you see revival happening and in what duration? Which are the categories you think will recover first?
Ashwin Puri, Co-Founder & CEO, Lake Shore India: Over the last five-seven years, we have seen shopping malls have moved away from commodity shopping to become a social gathering destination. Online shopping will get the most acceleration in coming months if the lockdown situation continues. The revival process won’t take much time – maybe just 6 to 12 months from now. There will be a lot of retailers and categories that will take time to come back though. F&B, cinema and restaurants will take more time in comparison to the other sectors. Cinema contribution towards footfall has been 10 to 15 percent which will be affected post COVID-19 for this, along with F&B, luxury segment and the premium fashion segment will be the last to revive. Electronic, health, value fashion, daily wear etc. will be the segments which will have a quick revival. Brands will have to work with shopping malls and their franchisee to bring footfalls and regain customer confidence.
What will happen to the food in the cinema business in terms of movies and F&B?
Alok Tandon, Chief Executive Officer, Inox Leisure Ltd: Yes, I agree we will be the last to be operational. As far as food is concerned, all F&B operators will have to reduce their menu. We will have to ensure that there are fewer crowds in the lobby.
Cinema operators will have to ensure alternate screening on movies. i.e. not all screens should be playing movies. Intervals will also have to be per screen and not two more screens together. It will take 7 to 8 months for the situation to normalize.
Do you think the customer’s wallet size & shape will have an impact?
Vishak Kumar: A lot has changed in these weeks. The shape and size of the wallet have definitely changed. Shoppers today are shopping with a different mindset. With things like unemployment, pay cut and job status in mind, people are saving more and are focusing on buying essential goods only. Travel and luxury shopping will be on hold in the coming months. Health & wellness will have big contribution. And addition of herbal clothing line, masks will have influence in brands category.
How will the F&B industry make a value proposition to woo back Millennials?
Riyaaz Amlani: Shopping malls have created space for people to come and hang out, kind of weekend gateway. Eating outside has become a national time pass. To bring customers, F&B will need to implement new practices.
Although rise in delivery has been observed but it’s expensive for brands to deliver it with the added cost of delivery. Even though people will spend less, F&B will have demand in the market. But hygiene has to be paramount for offline and online.
What are the effective measures that can be taken to take you through in the coming months due to the impact on revenue?
Ashwin Puri: A few measures which can be implemented are: Frontline staff ’s safety is important so a single shift to control staffing is necessary. India has late dinner format so Cinema + F&B can have similar operating times. The operating time for F&B can be extended once the cinemas shut after the last show.
Limited entry points for customers. ypermarkets can look towards introducing packages like Lentils+Rice+Suger combos. This will help to in reducing the time spent in stores and will also be more convenient for pick and drop.
With limited footfalls in shopping mall being a possibility, do you think malls should adopt a process of delivering products to consumers?
Dalip Sehgal: Delivering from shops inside shopping malls is not an issue at all. In order to manage costs and bring in customers, one should not compromise on value. Shopping malls are long term projects and even if this lockdown stays in place for a few months, this phase will pass soon. All of us should not only focus on cost cutting but should look for initiatives to bring the shoppers back to the mall.
In this period a lot of employees have gone back to their native places. How do you plan to bring them back?
Dalip Sehgal: We at Nexus haven’t let go of most employees and have taken all possible measures for their well-being right from giving them salaries to making sure they have rations. We have paid full salaries for the month of March and will be paying the same for April as well.
How are the rents going to pan out in this current situation and post-opening of lockdown?
Riyaaz Amlani: There will be phase wise changes as cinema and F&B will take time to come back to normal situation. The
rent to profit ratio which we have is 60:40. 60 percent goes to the landlord and 40 percent stays with the retailer. In a high street, it is a bit better and in favour of the restaurant. In this situation, I feel that we really need to work on no loss- no loss formulae. Retailers in loose formulae is not going to work. It should more of ‘share the gain and share the pain’ as we all are part of the same eco- system.