Wednesday, June 12, 2013

What could make shopping malls explode with footfalls all year round? Maybe this.

Its time retailers and multiple operators collaborated.
It is time the retailers and multiplex operators had a man to man talk! 

1. Interaction between two different organisms living in close physical association, typically to the advantage of both.
2. A mutually beneficial relationship between different people or groups.

That is exactly what we need in the shopping mall world today. Growth, preferably in astronomical figures y-o-y is what all businessmen these days are looking for. In many cases, this is ALL that they are looking for. Speaking with some prominent names in Indian retail, we found that the India consumption story and expected retail growth is not up to the mark these days. A major part of the growth showing in the accounts sheet is due to inflation. With increasing commodity prices, turnovers and sale values are going up but the actual sale volumes are not. In fact, sale volumes could have actually stagnated or even shrunk for a whole category of things on those store racks.

The general condition of the economy is not too great either. Even as Audis and Beemers are flying off the shelves at jaw dropping rates (by the way, we know of a guy who runs a chit fund scheme and owns two Audis, a couple of BMWs and a Porsche 911, so let us not judge the health of the Indian economy by luxury car sales. Thank you), a lot of businessmen are simply eating up their capital and their savings in these hard times, just to stay afloat. As an apt icing on the whole cake, India's political situation is pretty close to the ambiance in a bar where a guy acted funny with the bouncer's wife and the lady is just about to scream!

Mall footfall scenario #1 - It is boom shopping time folks so hold on to that mega release

There are certain times of the year when retail will boom. Regional festivals are times when in particular states where the festival is celebrated, shopping is bound to happen. Then there are nationwide shopping boom times like Dewali, Eid, Durga Puja (Navratri) to an extent and of course the year end festivities. These would generate footfalls for your shopping mall and thus, business for retailers primarily and a big boost in business for the food guys and the multiplex. A half day shopping spree at the mall in peak footfall season makes many people want to unwind with movie, no matter what it's rating is. Food without question is the next thing on the shopper's mind once the entertainment is taken care of.

When shopping by default is at it's peak, driving up mall footfalls significantly, the multiplex operators and their movie maker friends in India should release their average films. (Read 6 out of 10 and below ratings) This would still keep their revenues high as shoppers would be thronging to the malls and tickets would inevitably sell. A cool free ticket or fee popcorn deal with the hypermarket in the mall would add more boost to cinema revenues, despite the 5/10 or 4.5/10 content rating. Mega retail evening sales could be conducted by retailers during IPL season when multiplex operators are at their yearly lows for all evening and night shows. This would get people out of homes and into malls, substantially increasing the chances of many of them, buying movie tickets. More footfalls would mean more people laughing all the way to the bank. 

It must also be noted that there is a whole system which is working right now to drive people away from shopping malls. Think better and better content being delivered right in your living room year round. Think online retailers transporting whole wardrobes to your staircase, where would try, pick and pay, while the coffee brews in the kitchen. So shopping malls and their dependent businesses better watch out!

Mall footfall scenario #2 - It is back to back blockbuster release time, so put your feet up retailers

When you have longer periods without blockbuster movie releases, a lot of great content could be pooled up. These films, should be timed to be unleashed on the masses in the lowest shopping periods of the year. Special regional and national time windows where retail sales are slow by default, should be converted into back to back blockbuster movie release time, pulling footfalls to shopping malls. Successful retailers know that if they have a store in a place where more and more people pass by and can see the brand and it's merchandise, it will convert to more sales. In this scenario, the movies would do exactly that to mall footfalls, resulting in higher sales for the retailers, the food court and all other stake holders of the shopping mall.

It is easier said than done, we know. But this can add about 10% to 15% to the revenues of all parties every year. The multiplex blokes have to have a chat with the film makers over a cold one and explain the strategy. The big releases, to whatever extent possible should be lined up in the lean shopping periods for both national and regional films. The retailers have to show gratitude to the multiplex folks by offering free tickets and other cinema freebies and discounts when cinema content is below 6/10. And trust us when we tell you there will be crappy movies made and released till the end of the world. So Bollywood and it's regional siblings would will need that help. 

We have that uncanny feeling that this would also help the mall developer and his investors immensely, by improving revenues and making some breathing space in the current cash strapped scenario. Why do we also see the bankers smiling? Get the point? Thoughts and comments are so so welcome.


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