In an attempt to announce the return of normalcy to the real estate and retail sectors, IMAGES Group successfully conducted its first physical event – after a long gap of 12 months, ever since the pandemic broke out. ‘Retail Real Estate Strategy Meet’ was organised on January 22, 2021 at Aerocity, which witnessed a gathering of around 100 experts from the Shopping Centre and Retail industries. The event was conducted keeping all the COVID guidelines mentioned by the Central and the State governments, giving importance to social distancing and hygiene.
The evening was spent listening to and absorbing ideas and initiatives which some of the top shopping centres have come up with during and after the lockdown to get back on the track of revival and growth. The event was powered by Arklan and supported by IRIS Broadway, Palm Walk, EPICAH, Migsun, KW Delhi6, Mohali Walk, Boulevard Walk, and JS Martin & Co.
Amitabh Taneja CMD, IMAGES Group & Chairman, SCAI welcomed guests to the first occasion where they were physically meeting after almost a year of virtual conferences and events. He spoke on the revival graph of the Shopping Centre Industry and thanked mall developers for their efforts in dealing with the most challenging hand they have ever been dealt.
“The Indian Shopping industry is the key driver of consumerism in India and we believe that modern retail drives consumption. Today, if you see Fortune 500 Companies, retailers are amongst the top ten in the list. Aside from being the largest business, it is also one of the toughest and most challenging fields to be in. However, the consumerism in India has not scaled up to the level we were hoping it would, but I believe with the help of the shopping centres and organised retailers, we can build the consumption story of India,” he said.
Retail Real Estate Strategy Meet
A discussion wherein mall developers and retailers from the Delhi region shared their views and experience from the pandemic ensued. The key highlights of the discussion were:
- How to build consumer confidence
- How to co-create digital triggers to boost demand
- Analysing mall experiences and top line sales
- Abhishek Bansal, Executive Director, Pacific Malls
- Harsh V Bansal, Director, Unity Group
- Gaurav Juneja, Director, Hari Om Retail Private Ltd.
- Sukhwinder Singh Thukral, Owner, Venus Steps
- Deepak Aggarwal, Founder & Managing Director, Kazo
- Sharad Batra, Co-founder & Director, Café Delhi Heights
A special curtain raiser session was also conducted for the upcoming shopping malls where in mall developers from Delhi NCR region presented a quick information and gallery about their upcoming projects, which will be launched in 2021. The presentations were made by Arklan, Boulevard Walk, KW Group, Mohali Walk, Palm Walk and Trehan Group.
Collaboration is the New Normal
Introducing the key topics of discussion, Yogeshwar Sharma said, “Collaboration is the keyword of the day, something which has become a reality in COVID times. A huge surge in collaboration was witnessed in this period, between retailers, brands, mall developers and technology service providers. We all have been through tough times, and finally we are on a stage where we can say the rough period is behind us and we are moving towards normalcy at a good speed.”
Expressing his views on the recovery and collaboration, Abhishek Bansal, Executive Director, Pacific Malls said, “In terms of growth, numbers, and percentage in comparison to last year, we were pretty much on similar grounds. We have touched 70-75 percent of the last year’s numbers and this was what we had predicted in the initial re-opening after the COVID-led lockdown as well. None of this would have been possible without a collaborative approach, which we as mall developers took with the retailers. Both of us helped each other out in the beginning when the malls were opening or about to open. The big thing which we managed was not to shut down any stores and 100 percent occupancy of the mall was retained and when the mall reopened after the lockdown, it gave immense confidence to not only us, but the retailers and consumers as well. That made a huge difference and slowly gradually over a period of two months between July to August, we saw the consumers coming back.”
One of the major concerns which mall developers had to contend with in initial days was ‘how to retain consumers in a scenario when only 50 percent occupancy was allowed inside the mall’. Harsh V Bansal, Director, Unity Group said that they had to make create different strategies to counter this situation. “Aside from this, we saw that consumers did start coming back to the mall, especially with the onset of the festive season. The festive season, starting with Raksha Bandhan turned out to be very fortunate for malls, and gave us some of our confidence back since more and more customers started coming back and spending time in here,” he stated.
Sharad Batra, Co-Founder & Director, Café Delhi Heights agreed with and emphasized on the concept of collaboration saying that it worked for his organisation extremely well during the crisis period. “The good relationship factor with our landlords totally paid off for us. The foodservice industry was hit hard during COVID and received very little support from Government agencies. However, our mall developer landlords supported us completely and as we survived the initial phase, things started turning for us, ultimately helping our business reach respectable pre-COVID levels.”
Batra explained that with the help of mall heads, who are experienced and understand the industry better than most, foodservice operators tweaked their business models, successfully implemented social distancing norms, while keeping an eye on expenses. “The occupancy cost came down and we learnt to manage operational costs by limiting menus, limiting the number of people working for us,” he stated.
Gaurav Juneja, Director, Hari Om Retail Private Ltd. agreed wholeheartedly, pointing out that for retailers who had stores inside malls, the landlords were COVID warriors. “They were the ones who really stood by us and as a result, the retail industry is running again successfully today. There was lots of uncertainty in this period, but the fact is everybody is dependent on each other and most realized this during the COVID period. Aside from this, we at Hari Om Electronics collaborated with other retailers of different categories around our store in order to pull in their customers and give them ours. The idea of sharing consumers across different categories with no competition helped us all.”
Sukhwinder Singh Thukral, Owner, Venus Steps added to this saying, “We are into high street retail, but right now we are present in malls as well. Mall developers have supported us well throughout the COVID period and we want this support to continue. They have understood our problems and dealt with them as well as they dealt with their own challenges.”
“This was the time when everybody learnt the essence of collaboration,” Deepak Aggarwal, Founder & Managing Director, Kazo, said, agreeing with Thukral. “And it was not just retailers working together with mall developers. There was a loyalty collaboration with consumers as well. We were communicating and reaching out to our loyal customers in as many ways as possible during these months and we did almost 70 percent of our business from these loyal customers. We made a collaborating program for our consumers, where in a radius of 5 km, we invited the consumers and asked them to bring a couple of their friends to our stores. We sent vehicles to ferry them. Aside from this, we were taking visitors by appointment at the store and this was quite successful. Customers welcomed these ideas and participated enthusiastically. Even big retailers globally switched to this model as the entire industry worldwide was facing challenges in delivering orders.”
Talking about collaboration with retailers and consumer response from a mall’s point of view, Yogeshwar Sharma said that for Select CITYWALK the response has been good so far, because the consumer has come back in the same number and range. “However, the range is indicative. Real stories lie between these averages, because certain categories are really doing well and some are suffering a lot. The categories suffering need support for a longer duration and there is no timeline for this support. Therefore, collaboration is the need of the hour. This time it was a forced one, but indeed it has been a great lesson and learning for all of us. We have learnt it the hard way and it is going to stay with us for a long time.”
Co-Building Collaborative Models
The pandemic opened new doors for improved and innovative business models. There were a number of new aspects which emerged during this period. Hygiene was on one of them. Managing the increasing complexities of an already intricate business was another. A third, most important change which the malls – which thrive on brick-and-mortar retail – had to think about was online retail.
“Online retail did roaring business in this period. The best part is that there is consumption here. The amount of sales done on the online platform in this period has been unmatched, but make no mistake, malls also have a distinctive role to play. The recovery has shown that brick-and-mortar will never go out of business. One can buy online but shopping centres are a very integral part of retail and the community at large and will remain so,” said Sharma.
“With new models emerging, managing complexities is certainly an important aspect. Change and churn today is a basic necessity. Earlier, before COVID, churning was not essential, but now change is inevitable. And when we say change, it means the model of collaboration has changed. The requirement of the tenant and the retailer is so dynamic for each centre that we have to think of it as very unique for each transaction/category/brand. Sometimes it is a short time arrangement, sometimes it is a long one. It has become extremely dynamic. We have realized that the selection of partners is going to be a very strategic move in the long run from now. It is going to be more crystallized and we know we can move forward with something like this,” explained Abhishek Bansal.
Sharma further added to the revenue angle saying, “The models have to emerge, because a lot of consumption is happening online, therefore the brick-and-mortar model has to bring in certain situational changes. Retailers are hungry for sales, they don’t mind whether the customer is coming to their store and buying or opting for home delivery, but as a mall developer we feel that our revenue sales have been compromised if people don’t come to us.”
Talking about the revenue and the transparency angle associated with it, Kazo’s Deepak Aggarwal said, “Collaboration with mall developers is equally important to the collaboration which we have with the online and other retail partners. And therefore, Omnichannel plays an important role here. If we don’t have an Omnichannel model, all the orders will go from the central warehouse. If the order transaction is directly through our portal or store, retailers don’t mind paying the share with their landlords, but if the order has been placed from an e-commerce platform like Myntra, Amazon or Flipkart, in this case paying to two platforms will be a difficult situation for us. Therefore, there is a need of transparency within the system and outside the system.”
The Consumption & Technology Stories
From a retail perspective, the peak COVID period was all about conversion rates, consumption stories and footfalls in malls and stores.
“Changing consumer behavior was a key highlight of the lockdown. During the lockdown, most experts predicted darker days for the shopping mall, but things changed quickly, and we are seeing lots of new malls coming up recently. Adaptation of new technology is another aspect that became important. We as mall developers had to create new shopping experiences and focus on new merchandising prospects. Price parity is a third concern which needed to be looked at carefully in order to increase the consumption level,” explained Yogeshwar Sharma.
According to HV Bansal, another factor which played a key role during this period was ‘Observation’. “We observed our consumers on things like what they were comfortable buying, where they were confident about dining etc., and they did the same. The customers observed how we were implementing safety and hygiene measures, social distancing norms, how the mall was executing contactless methods of retail and slowly they became more confident in their approach towards coming back to malls. Christmas truly turned out to be the ‘big turnaround’ and it ultimately brought back 70-75 percent of the business as compared to the year before COVID hit. This initially grew more in the New Year and we are hoping to come back to complete normalcy very soon. It is a very clear indication that the economy has been resilient,” he added.
However, he went to explain that technology was a lifesaver for his restaurant and for scores others like him in the foodservice industry. “Through the data we collect with the help of technology, we have been able to collect and classify the responses of consumers and understand their shopping behavior, what are the timings they order, what they like etc. I feel we have just touched the tip of the iceberg, we are only at about 20 percent of the technology right now, so it is a long road ahead for us,” he added.
Gaurav Juneja highlighted another key concern from the retailers’ prospect. He said that retailers were forced to accept the reality that people did not want to step out of their homes. “We noticed that during the lockdown, in the electronics category, the products with a selling price of less than Rs 10,000 became the most preferred choices for consumers rather than going after products of a higher price range. After the lockdown got over and stores did open, the window started increasing to Rs 25,000 again but slowly. We will have to hope for it to grow bigger in coming months.”
“Technology has helped us in training staff and also connecting with customers in a new way. Technology expansion is happening in a big way and we have to keep ourselves updated with this trend,” he concluded.