The success or failure of a shopping centre depends on its tenant mix and the experience they bring to consumers: Jayen Naik
In an exclusive conversation with Jayen Naik, Vice President, Ruchi Malls Pvt. Ltd. (owned by Blackstone PE Fund) highlights the key strategies to successfully run a retail mall.BY Shipra Srivastava | May 03, 2017 | comments ( 0 ) |
Jayen Naik, Vice President, Vice President - Malls
How your mall can be called a retail destination? How it competes with others in the vicinity?
VR Surat is a premium lifestyle community center with a strong residential catchment. Positioned as a social hub for the urban Indian consumer through "Connecting Communities©" – a platform for cultural festivals, public-private partnerships and cross-border collaborations that encourage civic pride, strengthen the local economy and enhance the city’s brand image.These initiatives are designed in partnership with local stakeholders like urban bodies, and strongly rooted to the heritage of the city.
Since its launch in May 2013 VR Surat, has successfully engaged local communities to make it the most celebrated social hub, and a tourist and cultural destination offering an exciting mix of retail, art, entertainment and community initiatives. Apart from cultural and community initiatives VR Surat boasts of a stellar tenant mix and is proud to have facilitated the entry of new-to-market global & national brands such as Zara, Shoppers Stop, Marks & Spencer and several others into the local & regional market, who made their debut in Gujrat with us.The success of our tenants has helpedestablish brand “Surat” across the nation.
VR Surat has transformed the retail and cultural landscape of south Gujarat by providing a unique shopping experience throughart, culture and community engagement initiatives.
The abundant spaces and the well-planned design lend themselves well to theme-based events, which are popularamongst customers.We have aimed and delivered a tourism property that draws attention to the city as a whole, and that is our key differentiator
What is the tenant mix you have in your mall? How often you revive your lease period?
We house key anchors like– Zara, Marks & Spencer’s, Shoppers Stop, Westside, Max, Reliance trends and Digital, Unlimited, Inox, Funcity and some of the key retail brands comprise of Mac, Gant, Nautica, Lacoste, UCB, Kazo, Jack & Jones, Only, Vero Moda, Raymondsetc. We recently opened Praso Lounge (Shooting and archery – Entertainment format), Burger King, Skechers, Neos (Multi footwear brand),Reliance Footprints, Café Coffee day, 3seventy kitchen (A multi cuisine restaurant from Surat), Rare rabbit& Bargain Book Hut.
There are various lease terms which are regularly reviewed… and the same is reviewed 6 months prior to the end of term so that we get an opportunity to evaluate whether to renew the term or look at a replacement as appropriate to the requirement of the center. Apart from this we do a detailed weekly leasing review with the team and discuss leasing strategies on an ongoing basis. Retail trading densities are reviewed category wise and business review meetings are planned with retail heads to discuss their performance at the center.
We aspire to upgrade the brand mix and have all the missing categories on board to make ourcenter a one stop destination for our consumers and proud to say that this is the only Best shopping center in whole of Gujarat in terms of tenant mix, offerings, marketing activations and great operations ensuring in repeat clientele and a happy consumer.
What is the percentage of national, international and regional brand presence in your mall?
We have a strong presence and a unique mix of national, international and regional brand presence at our center and hence the percentage segregation is also done very strategically taking into consideration the market that we are operating into. We comprise of 37 international brands with 33% presence along with 77 national brands with 67% presence.
What percentage of your mall space is dedicated to food and entertainment?
Food and Entertainment being the charm of Surat we are highly focused on F&B and we make sure that The Surtis get a complete entertainment experience along with some of the best food joints which serve delicious food. The percentage given to this sector comprises of 29.5 %
What are the reviving strategies your mall is applying to bring newness?
The sentiments of Surat customers this festive season have been very positive & we have managed to clock our ever highest footfalls, vehicle count and retail turnover for our center in the month of Oct’16 followed by Dec’16. Consumers have enjoyed our exciting workshops, top entertainment activities like dancing, singing, games etc and made VR Surat their favourite destination which is pretty evident from our footfall and retail turnover numbers. However we always endeavour to upgrade our center’s and assets’ aesthetics. We are also passionate about introducing new brands who have entered the Country and are relevant to the centeretc. All of this is planned for 2017-18 .
In order to achieve the planned strategies we make sure that we strongly work around the processes and which are defined for each of the departments at the center .We have our weekly and monthly meetings/reviews wherein all the head of the departments discuss the updates, issues ,challenges , etc for their respective departments and work around the same as a TEAM . The Team is very approachable and follow an open door policy, hence the team does not have any reservations on discussing issues/challenges with seniors and in return even seniors are always available to facilitate them to resolve the same. That’s HOW WE WORK TOGETHER (HWWT) as a team.
How you are affected by the popularity of e-Commerce retailing? In this regard what strategies you have applied?
India remains an underdeveloped retail ecommerce market, with digital commerce accounting for only a small piece of the country’s total retail sales. Given the growth of eCommerce in India, retailers are feeling the heat, but on the contrary, malls are last in the line to fear online retail. Provided shopping centres have positioned themselves as entertainment hubs and hangout zones, the mall operators are of the opinion that no matter how much people shop online, they ought to drive down to malls for social gatherings as they can’t have a birthday bash or a friend’s outing/gatheringonline.
Globally 8% trade happens online, so we are talking about 90% plus offline trade to address the friction between online & offline scenarios.
In my opinion there could be 2 sides to this:
(1) when e-commerce websites are negatively affecting shopping malls.
(2) when such websites Complement shopping malls to meet consumer needs.
In the first scenario, the e-com industry will adversely affect Shopping Malls when the online store offersgreater discount/ price differences and the mall doesn’t take any steps in being a destination and offering the consumers an experience.
In the second case however, websites such as these tend to supplement the malls/ local shops. In Tier II and Tier III cities, branded goods/products are rarely available and if they are, there is always very limited choice. Online retail stores in this sense can be a boon to people from these cities as they enable the population to shop the latest products be it clothes, electronics, etc. In this case, local shopping malls which are decent but are not huge like those in the capital and other metro cities, are a good product mix for a customer to have.
I'd like to conclude by saying that the online shopping population and the offline shopping population are quite different and have various rationales for being so. A busy business man may order his groceries and clothes online but a housewife may like to visit the grocery store and spend a day or two shopping and browsing around in the mall. So while the two populations are quite different, at this point in time, I don't think there is a battle between the offline and online stores. It's a good ecosystem for all the shoppers, offline & online stores to co-exist in happily.
In order to make Virtuous Retail enjoy a healthy future in the industryin spite of Ecommerce retailing, we focus on providing consumers a well rounded brand mix with a focus on great experiences for our consumers while staying relevant to the community. As developers/Shopping center professionals we proactively focus on refreshing the centre every year with churning of the brands; removing older brands and introducing newer, more relevant brands into the mix.
According to you, what sized malls are more successful in India? Bigger/smaller sized and reason behind the success?
India’s shopping malls are of a comparable size and growing rapidly. However the success or failure of a shopping centre depends on its tenant mix and the experience they bring to consumers. A proper tenant mix and the right zoning within shopping centre leads to good profits. An effective tenant mix will attract customer traffic into the shopping centres; hence we have ensured that we have all categories on board making our centre a one stop destination for our consumers. In response to your question, I believe that retail developments ranging from a size of 5 lac to a million square feet can be very successful given the right management and tenant mix.
What are your marketing strategies? How much you rely on digital platforms like You Tube and social media?
Our marketing strategies have always been twofold. Firstly we lean towards targeted marketing where we cater to an individual target audience which includes females, kids, families, youth etc. To fulfill this we organize events targeting these specific audiences. This includes activations like cookery shows, drawing competition, musical evenings, treasure hunts, fashion shows, CSR activities etc thus fulfilling the objective of the event. We also organize a lot of shopping driven activities where we target the message in a manner where the consumer is incentivized to shop. We also regularly work on our SWOT analysis on all parameters for us to overcome our weaknessesses and work on our strengths so that we achieve desired goals.
Which are the most popular/best performing brands at your mall?
As a successful developer we strive to make sure that all the brands present in the centre dogreat business during their complete tenure and perform at their maximum. For this we are connected with all our brands and associate with them for our major events as well as our weekly events that we organize on a regular basis. Through this they are constantly motivated to clock in more business and achieve amazing sales throughout the season. In-spite of active participation of all our retailers we have some bunch of brands who do exceptionally good and raise the bar every-time throughout the month. These brands include Zara, Shoppers Stop, Being Human, Levis, Bestseller brands –Jack &Jones , Only & Vero Moda, UCB, Inox, BurgerKing and Mc Donald’s.
What are your future plans?
Our future plans will entail leveraging technology and our digital platforms.
Development of the VR Surat App, a dedicated Loyalty Program &engaging with our consumers through beacons and wifi are in focus this year.
Last but not the least is enhancing the space on hire inventory and making it as digital as possible. This is one area I believe if concentrated well can generate great revenues over a period of time. This stream of revenue is still considered as ‘other income , however we strongly believe that with focused efforts we can make this medium a main stream of revenue generation.
Location: Surat, Dumas Road, Magdalla
Year of launch: 2013
Total built-up area (sqft.): 6lac sqft.
Gross leasable area:4.47 sq.ft
Developed by: Virtuous Retail South Asia
Maintained & operated by: Virtuous Retail South Asia
Number of floors: 4
Number of stores: 120
Number of kiosks: 28
Anchor tenants:Zara, Westside, Shoppers Stop, Marks&Spencer’s
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