Mall Operations Management

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1 Learning Objectives By the end of this chapter, you should be able to understand: Introduction to Malls Importance of Malls Mall Operations Mall Positioning Tenant Mix and Zoning Chapter 17 Retail Store Operations and Management 1

2 Learning Objectives (continued) By the end of this chapter, you should be able to understand: Marketing Promotions Mall Facility Management Finance Management Role of Mall Operations Manager Challenges and Way Forward Chapter 17 Retail Store Operations and Management 2

3 Introduction to Malls Mall Operations Management The first shopping mall was the Country Club Plaza, constructed in 1922 as a business district for a large-scale residential development and featured unified architecture, paved and lighted parking lots and was managed and operated as a single unit. Over the years, malls have evolved and now consumers also enjoy children s playscapes, virtual reality games, live shows, movies in multiplex cinema, a variety of food in either the food court or themed restaurants, carousel rides, visually stunning merchandising techniques, robotic animal displays and interactive demonstrations. Chapter 17 Retail Store Operations and Management 3

4 Introduction to Malls (continued) Successful malls abroad also provide all the requirements and services like a chapel, mosque, child -care centre, wedding or community hall, clinics and other services. By providing additional services to its patrons like ATMs, florists, large parking spaces, reliable security, valet parking, facilities for disabled, interactive kiosks, wheel chairs, baby strollers, baby care rooms, washrooms for the physically disabled, doctor on call, ambulance services, etc., malls are not only creating a valuable experience for customers, but also building a loyal base for themselves. With a combination of fashion, food, entertainment and services, malls have now greatly expanded their role in the communities they serve. Chapter 17 Retail Store Operations and Management 4

5 Introduction to Malls (continued) From the earliest forms of retail called the Haat and the mela, to the basic shopping centres with a cluster of stores under a common roof and finally to those that also include food and entertainment facilities, the mall retailing scenario in India has evolved in a big way in metros and mini metros. Malls have emerged as a preferred development option for property developers due to better returns on their real estate investment and also other benefits. Chapter 17 Retail Store Operations and Management 5

6 Importance of Malls Mall Operations Management The secret of the lure of the mall lies in its mass appeal it has something on offer for everyone in the family. There is a wide range of shopping experiences bargains and discounts or high-end brands for couples, gaming and other amusement facilities for kids, a large choice of cuisines for family meals and, of course, the multiplex theatres. In many ways, malls reflect the state of the society and act as agents of change catering to a comparatively young population with rising incomes and busier lifestyles. Apart from stores, merchandise & offers, ongoing promotions & activations with fun and contests in mall atrium adds to the overall experience. Chapter 17 Retail Store Operations and Management 6

7 Mall Operations Mall Operations Management Mall management in India began with simple facilities management functions of operation & maintenance. The scope has now been elevated to shopping centre management adapting to new kind of empowered consumers who want everything as per their demand and wish. To keep this segment of consumers coming regularly, the malls need to provide not only the best of the basic amenities but also a good mix of tenants and brands, attractive promotions, entertainment and fun. Mall operations management now calls for a strong combination of all positioning, tenant mix and zoning, marketing promotions, mall facility management and finance management. Chapter 17 Retail Store Operations and Management 7

8 Mall Positioning Mall Operations Management Positioning a mall refers to defining the category of services offered based on demographics, psychographics, income levels, competition in neighbouring areas and extensive market research of the catchment. For example, if the market research indicates that the average number of households living in a particular area belongs to the upper middle class, then a high-end retail mall would suit the location. Positioning also refers to the location of the shopping mall which remains fixed while other activities such as trade/tenant mix can be revisited or redefined. Chapter 17 Retail Store Operations and Management 8

9 Tenant Mix and Zoning Tenant mix refers to the combination of retail shops occupying space in a mall. A right tenant mix would form a successful configuration that produces optimum sales, rents, service to the community and financial viability for the shopping mall venture. Zoning refers to the division of mall space into zones for the placement of various retailers. Right tenant mix and optimum retailer placement after a diligent zoning exercise can help retailers to attract both types of consumers, the serious shoppers as well as the impulse buyers. Chapter 17 Retail Store Operations and Management 9

10 Tenant Mix and Zoning (continued) The selection of the right anchor tenant and formulating the right tenant mix based on zoning helps attract and retain shoppers by offering them multiple choices and satisfying multiple needs. It also facilitates the smooth movement of shoppers within the mall, avoiding clusters and bottlenecks. This helps influence shopper s mall preference and frequency of visits while building a distinct image in the minds of shoppers. Chapter 17 Retail Store Operations and Management 10

11 Marketing Promotions Promotional activities and events in a mall form an integral part of mall management. Activities like food festivals, handicraft exhibitions and celebrity visits increase foot traffic and in turn sales volumes. Organising cultural events has time and again proved vital in attracting consumers to a mall. Such activities may also act as a differentiator for a mall. Chapter 17 Retail Store Operations and Management 11

12 Mall Facility Management Facility management refers to the integration of people, place, process and technology in a building. It broadly includes infrastructure, ambience and traffic management. Infrastructure management Management of facilities provided to the tenants. Provision of adequate power supply. Risk management issues such as essential safety measures. Asset liability and environmental audits. Emergency and evacuation training. Miscellaneous issues related to signage, water supply, sanitation, etc. Chapter 17 Retail Store Operations and Management 12

13 Mall Facility Management Infrastructure management Infrastructure Management POWER UPS with 100% Power Backup HVAC Supply Emergency Lights in All Areas SAFETY Fire Detection and Fire Fighting System Safety Signages Security System MISCELLANEOUS Adequate Parking Separate Toilets for Staff and Customers Building and Floor Directory System Water Facility Chapter 17 Retail Store Operations and Management 13

14 Mall Facility Management Ambience management Includes management of parks, fountains and overall look of the mall. Apart from shopping, people spend their leisure time in malls. A lush green landscaping with seating facilities and the presence of food and beverage inside or outside the mall can increase foot traffic. Traffic management Includes managing foot traffic into the mall and parking facilities. Foot traffic management involves crowd management inside operational area of mall. It is related to mall design and the spatial distribution of its tenants. Managing parking facilities includes provision of ample parking and manoeuvring of cars in the parking lot. Chapter 17 Retail Store Operations and Management 14

15 Finance Management Mall Operations Management Mall management also covers professional financial management. This involves monitoring and controlling of various issues such as Cash receipts and collection of income including rentals, service charges, car park receipts, electricity and other utility income. Developing accounting systems to track the ageing of debts, payment delay patterns, bad debts. Payment of all invoices and expenses developing standard financial templates. Preparation of a detailed annual property budget. Organising resources to deliver an efficient and effective annual external audit. Chapter 17 Retail Store Operations and Management 15

16 Role of Mall Operations Manager Similar to Store Head, a Mall has a Mall Operations Head. He is supposed to handle the below key stakeholders: Developer: who has developed the mall. Investors: who have bought property in mall. Occupants: which are brands or franchisees. Customers: most important and can be of any age. Government and Statutory Organisations: local authorities. Other Stakeholders: like media partner, event sponsors, kiosk owners, etc. Chapter 17 Retail Store Operations and Management 16

17 Challenges and Way Forward Success of mall depends on planning, execution and regular maintenance. Any lapse leads to customer dissatisfaction and lesser footfalls & sales. If profitability is impacted with developers choosing to convert malls into either residential complexes or office spaces. In India, challenges for mall are high property rates, inflation, licensing norms, approvals, infrastructure, utility cost and manpower issues. Maintaining & increasing footfall is an issue due to E-commerce. More professionals are now getting into Mall Management. Also there is an improvement in the overall ecosystem of consultants, research agencies, facility management agencies, marketing agencies, retailer best practices, etc. The time ahead is ripe for many developers to create world-class malls in India. Chapter 17 Retail Store Operations and Management 17