Desolate Malls, Serious Buyers

India’s vibrant mall culture has dimmed down to its smallest form, and retail is one of the industries that have been most affected by this pandemic. Many a glitzy outlet of a brand has shut down, and thousands have been left to dry. The pandemic continues to rage, and the life we knew is no longer normal.

India’s vibrant mall culture has dimmed down to its smallest form, and retail is one of the industries that have been most affected by this pandemic. Many glitzy brands have closed, and thousands of employees on the shop floor are left to fend for themselves. The novel coronavirus caused widespread destruction that has not been reported. Water always finds its level, and life will find a way. The unlockdowns have triggered a new lifestyle, even as the pandemic continues and the world is far removed from the normal we used to know. Fibre2Fashion gathered this common thread from thousands of words shared by mall owners and operators. Six mall owners owned 20 malls, which covered 10 million square feet. That’s a lot of ground to cover.

How did footfall and conversion rates compare before and after covid-19?

DLF: The numbers are up significantly over the past month. DLF Promenade, for example, has seen weekend footfall increase to more than 50% of the pre-covid level. Weekday footfall is around 35-40%. Footfall in our luxury malls has increased as they have always attracted loyal customers. Our malls have a good mix of brands because the majority of customers are buying. We expect footfalls to increase as the festive season begins. We also anticipate increased demand for discretionary purchases.

Select Citywalk The monthly footfalls were approximately 12 lakh before the lockdown. Select Citywalk saw an average of 10,000 daily footfalls during the first month of Unlock 1.0. This has increased to 6.5 lakh monthly within acceptable social distance and capacity norms. The conversion rates have been positive and encouraging in relation to footfalls. Most brands are pleased with the performance.

Capital: Footfalls have dramatically decreased. Only 25-30% of the footfalls that were there earlier are still present. Multiplexes and family entertainment centers are not yet operational in the malls. These have been great drivers of footfall. In many malls, the food courts are not yet fully functional. Since most shoppers are now serious buyers and have planned their purchases, the conversion rates are up by as much as 70-80 percent.

Inorbit Before the advent of COVID-19, weekends were when malls attracted the most footfall. This is also because malls serve as social places to dine, hang out, and have fun. There is not much difference between footfall on weekdays and weekends since malls operate without theaters, family entertainment centers, and food and beverage experiences. The number of shoppers is increasing, and the average spend per person has increased.

Mahagun, our daily footfall was about 20,000, and our conversion rate was 50-55 percent. After the lockdown, footfall is down to about 40-45 percent of the pre-COVID level, but conversion rates are up to 65-70 percent as shoppers flock to the mall.

What are the arrangements with your retailers/brand tenants in terms of rent and other fees?

DLF For retail, we waived the entire rent for the lockdown and a 75% waiver on MG rent (maintenance guarantees) in June. In the following quarters, 50%, 30%, and 10% of the waivers were passed on. CAM (common areas maintenance) and utilities have also been reduced by 20-25 percent across all properties. F&B: we waived the entire rent for the lockdown. From June to September, we have waived 100% of the MG rent for operators whose rental is based solely on their sales. We are partnering with these operators in this difficult time. Also, CAM charges and other utility costs have been reduced by 20-25 percent across all properties.

Select Citywalk. We work with all of our rental partners with great fairness and a balanced and nuanced approach. We want to be in solidarity with retail and create the best outcomes. As we prepare for the festive season, our brands have worked with mall management to ensure that all aspects of the project were completed.

Capital Most shopping malls have made some effort to accommodate retailers. In most cases, an agreement has been reached for lockdowns and post-lockdowns up until March 2021. Malls have been more generous with lockdown periods, waiving up to 100% of rentals. Developers expect at least 50% of the minimum guarantee after lockdown. In the meantime, some retailers are pushing for revenue-sharing deals only for this fiscal year. Many developers have also relented. Waiver amounts are also based on factors such as the category that the brand belongs to, the impact of COVID-19 on the business, the value of the brand, and the size. There is less relief on utility bills and CAM (heating, ventilation, and air conditioning) since they are more of a reimbursement to developers.

Inorbit: The relationship between the mall and brands is a close one. Both the mall and brands felt the pain of lockdown. We have established a solid foundation over the years and are happy to report that despite business constraints, our brand partners were very supportive and stood by us in dealing with the current crisis. We have a high level of engagement with all our brands and have worked together to achieve our shared objective.

Mahagun, we have waived the rental charges of 100% and the maintenance guarantee of 50% for April to June, and we are currently charging 50% of the rental and 75% of the maintenance charges. This model was chosen because we understood that being sensitive to our retailers’ needs was the need of today. The F&B segment will be charged a 25 percent revenue share, inclusive of maintenance, until December 2020.

How many stores closed in the last year? Are there any more expected closures?

DLF The percentage is not very high.

Select Citywalk: A few brands have closed down their operations. We do not expect any other stores to close anytime soon.

Capital: Closures have been minimal. The brands that have received termination notices are in the F&B (regional brand) and travel bag categories. Developers are more accommodating with brands that have been negatively impacted.

InorbitOur planning was meticulous, and we were able to open our malls at a rate of over 80% occupancy. By 80 percent occupancy, we mean that we have extended our malls with all the brands allowed to trade. Multiplexes, FECs, and F&Bs are prohibited from trading. We opened 80 percent of the stores, except for these. From the first day of reopening, all major anchors, such as Shoppers Stop and Lifestyle, H&M, Big Bazaar, Reliance Retail, etc., were fully operational. No brand was asked to leave. A few brands were delayed due to staffing issues. They began operations immediately after their stock and staff issues were resolved. We welcomed back stores that were scheduled to open but couldn’t because of the lockdown. We welcomed Krispy Kreme, CK Jeans, Charles & Keith, and CK Jeans at Hyderabad. JBL Harman opened in Malad.

Mahagun The store closures in malls are not the primary result of COVID-19. The brands are being replaced. Only a small percentage of the stores have been closed due to nonpayment. We are still working on a solution for them.

How many fashion stores have closed in the last year?

DLFThere was only one or two shops.

Select Citywalk We have seen fashion and apparel outlets grow rapidly. Decathlon was launched last month, Zara reopened in a bigger space, and EA7 opened its first Indian store here. EA7 Emporio Armani is more than just couture. It also focuses on athleisure.

CapitalNone yet, at least not in malls managed By Beyond Squarefeet. Retailers are consolidating and are willing to close non-performing shops where developers do not extend support.

Mahagun No closures have been recorded in fashion stores at our malls. The stores are experiencing a decrease in customers but not enough to force them to close.

How many layoffs have there been?

Select Citywalk. As a whole, the shopping center has retained all of its staff. We can’t comment on retail brands.

Capital MallMost mall developers have avoided layoffs so far.

In which cities/towns has your mall been the most severely affected?

DLFNone. All our malls which have reopened continue to recover week by week.

Capital: In general, malls that were opened last or cities such as Bhopal, Bhubaneswar, and Haridwar, where local authorities enforced weekend curfews, were the hardest hit. After Unlock 4, local curfews like this will only be implemented in containment zones. Malls located in Tier II and III cities are more resilient than those in metropolises.

InorbitTier III and II city malls bounced back quicker–this is also because the cases in these cities are much lower than in metros. There is a consistent trend in all city malls. All malls are growing at the same rate. This is also because 30% of a shopping mall’s space isn’t operational – the family entertainment center, theaters, and dine-in restaurant are closed. The timings are also restricted. The mall is full, and there are no vacancies. Rents have not dropped significantly; we’re actually getting better rates due to the lack of space available for new brands.

Mahagun, every market has been hit in the same way, and we will be returning with our safety measures and strategies. We are optimistic about the recovery of malls, as shoppers are eager to shop in a controlled and organized environment.

Were there any pipeline openings before the pandemic? What is the current status?

DLFYes. Many stores have recently opened as per our plan. Uniqlo opened a new store at DLF Mall of India in Noida. Brands, like Go Sports and Desigual have also opened stores at DLF Avenue in New Delhi. Soon, many more will follow.

Select Citywalk: We launched a high-ticket brand, like Decathlon, and Zara recently expanded and relaunched its larger store. Brands are aiming for larger plans and growing their business at a faster pace to prepare for the expected rise in demand over the next few months. We can expect to see sales in all categories as things return to normal.

Capital: Yes. Many openings had been put on hold. Once the malls were opened, many brands began to open. Phoenix Palassio in Lucknow was one of the biggest launches of 2020. Before lockdown, brands have also opened their stores in places where they had already invested heavily in the fit-out of their store. They did this after negotiating rent waivers with developers.

Mahagun Certain refurbishments were planned in the retail sector but were delayed. The opening of new stores was not scheduled as 95 percent of our mall space was already operational.

What are the most affected retail categories?

DLF According to a Retailers Association of India survey, jewelry and watches are the most affected categories. They are followed by furniture and North-specific furnishings.

CapitalThe hardest hits were the newer multiplexes and FECs (family entertainment centers)/gaming zones. Next are F&B companies, especially fine dining restaurants, that had to close their doors before dinner and were not allowed to sell alcohol. Bags and leather, formalwear watches, luxury items, etc., are also included in this category.

Inorbit: At the moment, ethnic and formalwear are affected. The demand for these categories will increase with the approaching festive season.

Mahagun Fashion accessories and clothing segments were the hardest hit.

Which new trends are being observed in the shopping behavior of consumers by brands/malls?

DLF (a) In the midst of the pandemic, consumers’ shopping habits have changed significantly. It is important to offer a hassle-free and safe shopping experience, as safety is the main concern. Shoppers will rely heavily on contactless self-checkouts and a contactless experience to ensure minimal contact with other people.

Select Citywalk: Consumers are now serious buyers, as they no longer window shop and prefer to buy and shop all they want. Consumers are more informed about services and products that they wish to purchase, making their online or offline shopping easier. The shopping center’s new initiatives are proving popular with customers who want a seamless shopping experience. These include curbside pickup, personal shoppers, and online services such as a WhatsApp-based Concierge that answers questions about visiting hours and protocol and connects them to brands in-store.

Capital discretionary shopping has dramatically decreased, and in recent years, shopping has become more need-based. People are only buying expensive items if they really need them. Since the majority of the workforce has moved to a work-from-home culture and online education is also being imparted, we have seen a massive surge in the demand for electronic products. This trend is expected to change once the holiday season arrives.

Inorbit After lockdown, the consumer spends more on essentials like groceries, hygiene products, health and wellbeing, etc. We have seen a rise in the demand for athleisure and sportswear as people are more interested in fitness and health. We have seen a large number of customers embrace digital shopping. This has led us to create convenience-driven experiences such as video calling/virtual shopping and curbside or drive-in pickup from the mall.

Pacific :* Consumers are spending more on apparel, lifestyle products, cosmetics, and health & beauty. F&B is doing well, and people are eating out. * Electronics, sports, and home decor, as well as furnishings, continue to be popular.

Mahagun, shopping habits have changed dramatically, and now people prefer to shop at places that make them feel safe and cared for. Our mall ensures that there are no crowds and that the density of customers is maintained at all times with the appropriate social distance. Temperature screening is required upon entry, along with hand sanitization.

Ecommerce is becoming more popular as people are limiting their travel. How can malls ensure that brands have an omnichannel presence?

DLF Even before the pandemic, retailers were focusing on an online presence as a complement to their physical stores. The mall experience will remain popular, and people will continue to be drawn to it. Our focus is on using digital media to communicate our message effectively effectively. By launching our redesigned DLF Lukout App, we strengthen our omnichannel capabilities and presence. The app offers real-time traffic information, express check-in, curbside pickups, shopping assistance, and contactless eating. This app will bridge the gap between our customers and us, ensuring that they have a safe shopping experience at the mall.

Select Citywalk: Consumers have become accustomed to the new norm, but their shopping habits and priorities have changed. We have stayed ahead of the curve in terms of consumer behavior and the changing dynamics. In order to provide safety, convenience, and comfort to our customers, we have launched new initiatives that seamlessly integrate the online and offline experience. We offer concierge services to answer all your questions, home delivery and contactless ordering services, a personal shopper, curbside pickup, and an online shopping guide.

CapitalMalls and retailers are embracing technology in a way they have never done before. The majority of reputable malls have an app that takes into consideration the shopping habits of consumers. Many well-known brands are now available online and off. According to a recent study, 70 percent of retailers, both national and regional, have turned to technology in order to tide over this turbulent wave and sustain and grow their businesses.

Inorbit We have introduced several services that add value to the customer’s shopping experience. (a) WhatsApp Video Call Shopping: To personalize your shopping experience. Customers can make a WhatsApp call to staff at our malls, who will show them the latest products and assist with their shopping. The products will be delivered directly to the customer; (b). Curbside pickup: Customers can pick up pre-ordered items from the curbside pickup location without having to enter the mall. The management has introduced services like contactless parking and dining in the food court.

Pacifica offers a variety of shopping options that are convenient and safe for our customers. These include Shop from Home, Back to Shopping Offers, Free Home Delivery, WhatsApp Video Shopping, Block-and-Shop, etc. The Block-and-Shop allows a customer to book a time slot and shop in a store. A central executive receives requests from customers through a WhatsApp Business account. He then allocates slots to two other executives who take them on a video chat for shopping. Video calls are used to inform store managers about customers who visit the store. Customers who visit the mall can leave their vehicles at the drop-off area. Limited entry into stores is encouraged, and there are no queues in the billing area. Pacific at Door also offers gift vouchers for every purchase. Mall authorities have informed retailers and management staff to keep a close eye on the guidelines. A state-of-the-art contactless app for ordering food and making payments is running at all of our food courts.