As the retail landscape continues to evolve, the relationship between malls and retailers has undergone a significant transformation, moving from a competitive stance to one of strategic partnership. This metamorphosis is critical for navigating the contemporary retail challenges and sustaining profitability. This shift was a focal point of discussion at the ET GIRS panel in Mumbai, where industry veterans highlighted the urgent need for collaboration to face modern retail complexities effectively.
The Need for Adaptation
Mutual Dependency
Rajendra Kalkar, Business Head for Retail and Hospitality at Adani Realty, underscores the necessity of adaptation in the retail environment. The post-COVID era has made it abundantly clear that both malls and retailers must support each other to navigate the intricate landscape and secure profitability. Kalkar notes that the traditional tug-of-war between the two entities is now obsolete and counterproductive in today’s market. Mutual dependency has become a cornerstone, with both parties needing to work in harmony to attract customers, boost sales, and build long-lasting brand loyalty.
Adaptation goes beyond just adjusting to current trends. It includes reevaluating old strategies and adopting innovative solutions that cater to modern consumer behavior. For example, the significant rise in online shopping has necessitated a reevaluation of revenue models and prompted the integration of omnichannel retail strategies. Kalkar highlights the importance of agility, where both malls and retailers are required to remain flexible and responsive to the rapidly changing industry dynamics. This adaptability not only ensures survival but also creates opportunities for growth and enhanced customer experiences.
Embracing Collaboration
Manish Mehrotra, Senior Vice President and Head of Operations at DLF Malls, elaborates on the evolution from competition to collaboration, underscoring the benefits of a transparent and cooperative relationship. Collaboration between malls and retailers enhances operational efficiency and customer satisfaction. Mehrotra advocates for integrating loyalty programs from both ends, as such integration amplifies consumer engagement and drives better operational results. The collaborative approach extends to sharing operational insights, where both parties discuss challenges openly and work together to find mutually beneficial solutions.
Mehrotra emphasizes the critical role of communication in fostering this partnership. Regular meetings and open dialogues enable both malls and retailers to understand each other’s constraints and opportunities better. By doing so, both parties can devise strategies that are well-aligned, ensuring smoother operations and enhanced customer experiences. Furthermore, the integration of loyalty programs can create a seamless and enriching experience for consumers, leading to increased customer retention and satisfaction. This collaborative spirit is essential for sustaining a successful retail environment in the evolving market.
Strategic Data Sharing
Valuable Insights
Gaurav Balani, Deputy General Manager for Marketing at Infiniti Mall, champions the cause of strategic data sharing to optimize performance. Balani argues that regular business meetings and open data sharing are essential to address underperformance effectively. By pooling their resources and insights, malls and retailers can uncover valuable trends and consumer behaviors that inform their marketing strategies and operational improvements. Unified loyalty programs are pivotal in fostering repeat visits and enhancing the customer experience, providing comprehensive data on spending patterns and customer preferences.
Data sharing also facilitates better decision-making and targeted marketing campaigns. Balani highlights the importance of analyzing granular data, such as transaction details, to understand customer spending behavior deeply. This detailed analysis allows malls and retailers to tailor their offers and promotions to meet consumer needs precisely. The collaboration in data sharing fosters an environment of continuous improvement, where both parties can dynamically adjust their strategies to enhance their competitive edge and provide a better shopping experience.
Financial Transparency
Sreejit Nair, Vice President and Head of Business Development at Mr. DIY, underscores the significance of financial transparency between malls and retailers. Nair points out that in India, the level of openness in financial dealings needs to catch up to that of mature markets in Southeast Asia. Transparency in financial matters, such as rent structures, revenue-sharing models, and investment plans, is vital for building trust and fostering a robust partnership. Nair suggests that more mature strategic discussions about store design, format, and merchandising can significantly benefit both parties and align their goals more closely.
Financial transparency also paves the way for more informed and strategic decisions. When both parties share detailed financial data, they can better understand each other’s challenges and opportunities. This mutual understanding allows for the development of more tailored and effective strategies that consider both parties’ needs. Nair advocates for developing strategic discussions that involve financial clarity, ensuring that both malls and retailers are on the same page and working towards common objectives. This transparent approach is essential for creating a sustainable and thriving retail environment.
Adapting Revenue Models
Changing Consumer Behavior
Puneet Bhatia, Senior Vice President and Head of Business Development at Sapphire Foods India Limited, addresses the significant shift in consumer behavior and its impact on traditional revenue models. The advent of delivery services has drastically altered the retail landscape, making it necessary for malls and retailers to adapt their revenue-sharing strategies. Bhatia emphasizes the need for a nuanced approach that distinguishes between dine-in and delivery segments. Adjusting revenue models to account for the rise in delivery services is crucial to align rental costs and ensure fair profit-sharing.
The changing consumer behavior also necessitates the integration of technology to track and analyze consumer preferences. By leveraging data analytics, malls and retailers can gain insights into the popularity of delivery services and the impact on foot traffic. This information can inform more dynamic and responsive revenue models that cater to the evolving consumer demands. Bhatia advocates for flexibility in revenue-sharing agreements, ensuring that both parties can adapt to the shifting retail environment and maintain fair and sustainable profit margins.
Quick Commerce Challenges
Vishal Telkar, Head of Business Development at Taco Bell India, delves into the complexities introduced by the rise of quick commerce. Quick commerce, which focuses on rapid delivery services, poses unique challenges for traditional revenue-sharing models. Telkar suggests adopting a tiered revenue-sharing model based on the delivery and dine-in percentages. By doing so, rental costs can be more accurately aligned with the contemporary market dynamics, ensuring that both malls and retailers benefit equitably from the evolving consumer preferences.
The integration of quick commerce requires a comprehensive understanding of consumer behavior and adaptive logistical strategies. Telkar highlights the importance of collaboration in managing these changes, where both malls and retailers must work together to optimize delivery efficiencies and enhance the overall customer experience. By embracing a tiered revenue-sharing model, malls and retailers can navigate the complexities of quick commerce more effectively, ensuring that both parties can leverage the benefits and address the challenges collaboratively.
Leveraging Consumer Data
Deep Analysis
Vivek Sandhwar, Chief Operating Officer of Being Human, stresses the importance of delving deeper into consumer data beyond mere footfall numbers. Sandhwar advocates for a granular analysis of consumer behaviors, such as movement patterns within the mall and dwell times at different store locations. Understanding these intricate details provides valuable insights that can inform marketing strategies and operational decisions. Collaboration in analyzing this data enables malls and retailers to identify opportunities for enhancing customer engagement and optimizing store layouts.
Sandhwar points out that deep analysis of consumer data can reveal trends that are not immediately apparent through high-level metrics. For instance, understanding the movement patterns of customers can help retailers position products more strategically and enhance the overall shopping experience. This level of collaboration in data analysis ensures that both malls and retailers can make informed decisions, leading to improved marketing effectiveness and a more engaging consumer environment. The detailed analysis of consumer data is a crucial component in the strategic partnership between malls and retailers.
Enhancing Experiential Retail
Tarandeep Sekhon, Chief Business Officer at KidZania, highlights the significant shift towards experiential retail and its importance in the modern retail landscape. Experiential retail focuses on creating immersive and engaging experiences for consumers, which has become increasingly vital in attracting and retaining customers. Malls are incorporating diverse entertainment options, such as interactive play areas, live events, and unique dining experiences, to enhance the consumer journey. Sekhon emphasizes that collaborative loyalty programs can significantly enrich consumer engagement, making the retail experience more exciting and memorable.
The evolution of experiential retail requires a deep understanding of consumer preferences and innovative approaches to create engaging environments. Sekhon underscores the importance of collaboration between malls and retailers in designing these experiences. By working together, both parties can create unique and compelling offerings that differentiate the mall from its competitors and draw in more visitors. This collaborative approach ensures that the experiential retail environment is continuously evolving, providing fresh and exciting experiences that keep consumers coming back.
Main Findings
The changing relationship between malls and retailers signifies a strategic shift from competition to collaboration, with an emphasis on mutual support and growth. The insights shared by industry leaders highlight the importance of transparency, adaptability, data sharing, and innovative revenue models in navigating the modern retail landscape. By embracing these principles, both malls and retailers can create a symbiotic relationship that drives profitability and enhances the overall consumer experience.
The main findings suggest that strategic data sharing, financial transparency, and collaborative innovation are essential components of this evolving partnership. Integrating loyalty programs and analyzing granular consumer data can significantly enhance marketing strategies and operational effectiveness. The rise of quick commerce demands a reevaluation of revenue models to ensure fair profit distribution, while experiential retail highlights the need for creative and engaging consumer offerings. These insights collectively underscore the critical importance of collaboration in the modern retail environment.
Future Considerations and Next Steps
As the retail landscape continues to evolve, a significant transformation has occurred in the relationship between malls and retailers. This change has seen a shift from a competitive stance to one of strategic partnership. The importance of this evolution cannot be overstated, as it is crucial for navigating the complexities of contemporary retail challenges and sustaining profitability in a rapidly changing market. This transformation in approach was a focal point of discussion at the ET GIRS panel in Mumbai, where industry veterans underscored the urgent need for collaboration and deeper alliances to effectively tackle modern retail challenges. These experts emphasized that, in order to thrive, both malls and retailers must work together more closely than ever before, sharing data, insights, and strategies to enhance the overall consumer experience. By forging these strategic partnerships, both parties can better adapt to shifting consumer preferences and technological advancements, ultimately driving growth and ensuring long-term success in the retail sector.
