Malls are going from big brands to smaller, quirkier stores to draw more shoppers

As the business of mall space changes, new-age labels and even mini amusement parks are taking precedence over traditional giants.

There was a time when malls were synonymous with the biggest brand they held. So you went to Shoppers Stop or Lifestyle instead of Xyz mall. These large brands were called ‘anchor tenants’, because they drew people to the mall, and the idea was that the people they drew in might then also shop at the smaller or lesser known stores, eat at the food court, watch a movie at the mall’s multiplex — and therefore contribute to the overall revenue of the mall itself.

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Anchor tenants enjoyed pride of place, with sprawling spaces in prime zones — near the entrances or the atria — given to them at discounts.

Over the past five years, though, things have begun to change. A new category has begun sharing the spotlight with anchors — the mini anchor.

“These are stores that are smaller, but almost as popular. They usually replicate a similar reach and brand recall as traditional anchors,” says Anuj Arora, general manager at the Oberoi Mall, Goregaon. “Zara, Marks & Spencer and NAMCO are good examples of brands in this category.”

The anchors themselves are changing too. “Anchors used to typically be multi-branded apparel stores, hypermarkets and multiplexes,” says Gurvineet Singh, chief operating officer at Viviana Mall. “Now we’re including specialty anchors or focussed anchors like Home Centre and Hamley’s. We’re also seeing anchors across the country becoming experience- or concept-driven. Like Fun City, which along with being a gaming arcade, has added a mini amusement park recently, complete with rides and a giant wheel.”

NEW FORMATS

Part of the reason for the change is that retailers were becoming more cautious about store size, as rentals continued to shoot up and consumer spending dipped.

“The average size of most anchor tenants, not just in Mumbai but in top cities across the country, has shrunk over the last few years, by up to 40%,” says Anuj Kejriwal, managing director and chief executive officer for retail at realty consultancy Anarock.

Malls too are looking to introduce more mini anchors and vanilla stores, which typically take up smaller units, thereby allowing the mall to earn more from rentals.

“At our mall in Thane, we’re evaluating and optimising space to accommodate new-age brands like the Korean ones, MiniGood and Ilahui. These are vanilla stores, but attract crowds because there’s a lot of interest in the kinds of lifestyle products they sell,” says Deva Jyotula, vice president for retail at Korum Mall.

To stay relevant, malls will need to have a mix of anchors, mini anchors and vanilla stores, says Kejriwal. “There was a time when just one anchor tenant was enough; this is no longer the case,’ he adds.

A key factor driving this change is evolving customer profile. “The e-commerce revolution is transforming consumer expectations. The retail customer based is dominated by millennials and post-millennials who are tech-savvy and demand the same kind of variety and ease of experience offline as they get online. So mall operators will eventually find a way to offer a mix of mid- and high-end retail, entertainment, fine dining and experiential events.”

Some of this experimentation is already visible. PVR has converted one of its theatres into something called a PVR Playhouse, which is a multiplex designed for children. The seats are multicoloured, the décor is snakes-and-ladders-themed; there’s a slide. “Even traditional anchors are experimenting with experiences and concepts, as they try to set themselves apart,” says Arora of Oberoi Mall.

NEW RELATIONSHIPS

Malls, meanwhile, have begun to reach out to their anchors and mini anchors more effectively. This includes promoting their brands via loyalty programmes, gift vouchers and prizes, and using the mall’s own social media handles to promote these stores’ new collections, special offers and events.

“Shoppers Stop wanted to conduct a fashion show once, so we gave them space in the main atrium free of cost. There have also been times when we’ve opened the mall before customer hours and stayed open till midnight because a brand was holding an event or sale. We’ve provided that operational support at no charge,” says Singh of Viviana Mall.

Malls will eventually have to leverage technology better than they are currently doing, Kejriwal says. “Consumers want a more personalised retail experience. Tech platforms armed with artificial intelligence and virtual reality are giving them that. Offline retailers will have to find ways to compete.”