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Loading ...With the domestic retail market witnessing a gradual revival, mall owners are implementing various schemes in order to expand the sources of revenue generation.
As store vacancies in malls started to swell during 2008–09 in a psychological recession plagued India, developers tried to hold their bleeding noses, trying to look out for additional sources of income to give a push to their operating revenues. Although necessity is the mother of invention, the latter soon becomes a habit and then culture. Such is the case with most promotional or additional revenue generating activity that present-day malls practice on a routine basis.
Major Sources of Additional Revenue
Some of the non-conventional ways in which additional revenues are being earned by shopping centres over and above the ‘fixed rentals from their tenants’ include the following:
Temporary leasing area: These are referred to the vacant stores that are let out to vendors. It could be a fixed kiosk wherein different retailers display variety of merchandise and operate on a rotational basis. Certain service kiosks are also mushrooming at present such as kids play area, tattoo stations, photo stations and spas, among others. Lately, developers are eyeing to rent out their vacant stores for exhibitions as well as small gatherings.
Events: Almost every mall these days has some buzz in the air about an upcoming or an ongoing event. These events were initially conceived as promotional activities, but at present mall marketers use such events as brand building activity. Either ways the idea is to generate extra revenue.
Over the years there has been a steep increase in the types of events that are organized. Categorically they can be demarcated into:
· Mall events such as celebration on Valentine’s Day, Republic Day and such other
special occasions.
· Mall tenant events such as store launch parties, fashion shows by apparel brands and organising musical evening for brand promotion including visits of brand ambassadors, among others.
· Events as venue partner are witnessing an upward trend as mall areas are rented for brand launches, IPL related events, events in collaboration with various television/radio channels etc.
· Organizing corporate social responsibility oriented events that are not aimed at colossal revenue generation but certainly help mall retailers to connect with customers. Events organised in association with NGOs on occasions such as Women’s Day and Labour Day along with free health and yoga camp are picking up pace.
Promotion and Advertising: Different revenue generation activity through advertising are not only meant for tenants but are also undertaken by most brands/organizations. New product launches in a particular store can be advertised through floor graphics, standees and even drop-downs leading to the store. Companies utilize digital and graphic signage like Wi-Fi, Bluetooth and plasma screens to promote their products in malls. In return they pay rental charges, thereby generating revenues for mall owners.
Miscellaneous sources: Other sources of revenue churners could be a range of services such as valet parking, gift coupons and crèche facility, among others in order to create extra revenues for the smooth functioning of malls. Although these are used only by a fixed percentage of people, they do provide an impetuous to revenue generation.
Malls developers, nevertheless, have to keep greasing their elbows and constantly strive to differentiate themselves to maintain a competitive edge. Malls will have to keep opening up innovative ways of revenue generation. This will not only keep the average Indian shopper interested but also withstand economic backlashes in times of restraint. Developers will have to conceptualise, plan and provide for these activities
right from the time they are putting up the pillars. Innovations will age and become habit but constant innovation will keep feeding ‘the mall-ers’ with ‘extra bites’.
Himani Paul
Commercial Manager
SEGECE INDIA Pvt. Ltd.
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