Malls go with the grain, reinvent themselves to remain steady in the e-commerce era

In an era dominated by digitization, almost everything one needs today is just a click away. Be it expressing oneself, supporting a cause, marketing and promotions or shopping – everything today is done ‘online’ and with ease. India, which has been swept by the online revolution, has become one of the most prospective markets for the e-commerce industry. In recent times, e-commerce has managed to attract an envious number of shoppers and this has created immense pressure on malls, which are now in an introspection mode and are left to do a bit of soul-searching. The prime cause of concern for malls today remains one: How to retain consumers who are increasingly being swept away by the charm of online shopping!
One of Delhi’s leading malls, Select CITYWALK, which is also considered one of India’s most prime shopping centres, is considering an entry into the e-commerce space.
Elaborating on what seems like a counter-intuitive move, Yogeshwar Sharma, Executive Director, Select CITYWALK says: “In times to come, digital media will be bigger; one cannot ignore the kind of sales being racked up by online sites. If we have to stay in the game, we need to evolve from brick-and-mortar retail to a click-and-mortar strategy. It is all about thinking creatively and pragmatically; we are also in talks with several brands and we want them also to work creatively with us.”
Divulging further details on the mall’s e-commerce agenda, Sharma states: “According to some industry estimates, 30–35 per cent fashion-related shopping happens in Delhi–NCR, and Select CITYWALK has almost all the leading brands as tenants.”
“Also, to authenticate their presence, many online players are looking at opening physical stores to give a real-life look and feel experience to their customers. The concept of hybrid retailing is becoming a market reality,” he adds.
Sharma believes that given Select CITYWALK’s strong recall with customers, the mall would find it relatively easy to establish a strong connect with online shoppers as well.
Select CITYWALK plans to convert its existing website into an e-commerce platform. Operating under a B2C marketplace model, the mall’s existing tenants can use the website to sell products, with Select CITYWALK being offered a commission on actual sales.
Dismissing the common perception that consumers are increasingly favouring online channels due to their lower pricing model, Select CITYWALK will keep the website pricing on par with that in the stores.
Sharing his rationale on this, Sharma notes: “We will ask the retailers not to sell fresh stock online. The reason for not giving exuberant discounts to lure more traction online is simple: we want our e-commerce model to break even. Currently, even the big guns of online retail are bleeding; none of them have managed to come close to the break-even point. So, we do not wish to follow the model of heavy discounting like other e-commerce players.”
“Irrespective of how influential e-commerce business will become, services cannot be retailed online. So, as a developer, we will lay more emphasis on our services. We will have more FECs, gyms, food service joints, salons and spas in our centre to create differentiation,” he discloses.
The move to spearhead into the e-commerce space may be new for the Indian retail scenario, but several foreign shopping centres have taken that path in the past. Westfield Group, one of the world’s largest mall operators with presence in Australia, New Zealand, UK and US, ventured into e-commerce in 2010. Later, it transformed its website into a model where consumers can look for products to either buy at its tenant stores or directly from brand websites.
Opining about the e-commerce scenario, Benu Sehgal, Mall Head – Mall Management, DLF Place Saket says: “Everybody is talking about e-commerce these days. Evolution is a natural process and nobody can take away evolution from anything, including a segment like retail. E-commerce is going to be a part of retail. However, malls will not get affected by this change because people would still feel the need to go out for a movie or shop with friends, etc. In fact, the number of shoppers has increased because of e-commerce. Certainly, e-commerce has created new opportunities; it is yet another emerging format in retail.”
Highlighting the e-commerce aftermath, she says: “Low price point categories might diminish from retail malls as e-commerce grows in future. The number of malls is going to decrease and experience will play a crucial role. Store sizes will also become smaller in future.”
To counter the e-commerce threat, she says that the whole of DLF fraternity is working on a strategy wherein they can bring out the desired quality from e-commerce. “We need to create a balance between brick and click, and form the strategy accordingly. The time has arrived when we need to modify our contracts for leasing,” she quips.
Negating the thought that e-commerce is the reason behind the dipping footfalls at malls, Subir Das, COO, Avani Riverside says: According to me, all the malls across the nation have felt the brunt of a drop in footfall. However, the primary reason for this is not e-commerce but the unsaid recession that is looming over the economy for past one-and-a-half years. The market is pretty dry and people are only buying things that they need. There has been a cut in leisure-based shopping.”
He further says, “The market is undergoing rectification and deep introspection and by 2016, things will change for good. In the meanwhile, as mall developers we should give our customers good services. I certainly feel that managing the mall well and promoting it well will do the trick to attract more footfalls. We as developers are considering getting in more and more new concepts to keep the visitors hooked to the mall. We are also working in accordance with retailers to innovate ourselves.”
All said and done, malls and e-commerce both are here to stay. One cannot completely cannibalise the other, but e-commerce has definitely changed the way malls used to operate and they have upped their ante also. Moreover, riding this reality, malls are trying to connect with their consumers on an emotional level via experiential marketing and activation-based campaigns. After all, e-commerce cannot delight shoppers with spa and gym-like experiences, and prudent mall owners are trying to make good on the notion of retail therapy, by giving shoppers a platform to not just shop but also indulge in their hobbies.