Retail Dude

Malls have always faced the problem of more browsers than buyers, but in the first of it’s kind report, more retailers are pulling out of malls for the want of sufficient footfalls. As seen historically any store in the mall gets a conversion of around 18-30% depending on it’s location and accessibility within the mall. And, if the mall is not able to attract large number of footfalls, any retailer would find it hard to earn enough to match the rising rentals along with the cost of operating the store. With little or no support from the mall developers in marketing the store this has become a spiraling problem for not only the large houses but even the smaller ones.

Another area which the article brings to light is the lack of understanding an imperative (from a retailer’s point of view) concept of “tenant mix”. The term simply connotes the mix of retailers who are present in a particular mall. It is palpable that in a single mall the kind of retailers should similar to each other, in terms of their price points, demography of their target segment and in some cases the merchandise on offer (eg. Gold Souk in Gurgaon). But, as retail professional I can only feel sorry for those retailers whose professionals fail to analyze these considerations before they zero-in on a particular mall.

Well, one of the recent examples is happening right now in my city, Dehradun. Looking at the tenant mix of the mall (one of the first) one can only wonder - Would a brand such as UCB, Reebok and Big Bazaar, be able to generate similar kind of revenue operating out of the same mall? If you ask me I’m more than dubious. Though, the company would have done the indispensable study of the catchment and the competitors but still the point that they missed out was the understanding the majority of customers who would visit the mall, considering that it’s anchor tenant is Big Bazaar.

Like a ubiquitous silver lining, there a lesson in this whole episode too. It’s time for smaller retailers, who are bent on following footsteps of their larger and more established counterparts, to step back and think again. It is crucial to decide on any location only after asking oneself a simple question –Would my target customers be comfortable to shop at the selected location and subsequently, would they return to the store every now and then?

-  Vivin

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