Exactly how long has been since a shopper visited your retail store or entered your mall outlet for some weekend shopping indulgence? The days are gone when people would just go to the mall for a stroll, window shopping or to eat at the food court! Covid-19 has changed things but both shoppers & sellers are praying for normalcy.
In recent decades, the concept of the shopping mall, which has its origins in the U.S. and became a full-blown modern retail trend there in the post-WWII years, has proliferated across the globe. The five largest malls in the world now reside in Asia. China’s New South China Mall in Dongguan stands at the top of the heap with 2.9 million square meters of space.
A storm of global trends are coming together at the same time to cause malls to change the role they play in people’s lives. No longer are they primarily about shopping. Now, when consumers visit malls, they are looking for experiences that go well beyond traditional shopping.
The growing middle classes in Latin America and Asia maintain a strong association between consumption and pleasure, driving the need for more engaging shopping experiences. And finally, the e-commerce revolution and the rise of digital technologies are fundamentally reshaping consumer expectations and shifting the function of stores toward useful and entertaining customer experiences.
Thanks to a continued economic slowdown and rapid advance of the digital revolution, the U.S. mall industry is retracting and facing high vacancy levels.
The market size, measured by revenue, of the Shopping Mall Management industry is $23.8bn in 2020 and is expected to decline -0.9% in 2020.
Here’s a look at how mall shop owners and retail store owners are currently struggling:
- Even though the consumer may visit the mall, the average time spent by them has reduced 50-60% compared to before the pandemic.
- Global uncertainty and economic crises are leading to wary consumers who are focusing on saving vs spending.
- In countries like USA, resurgence of Covid-19 cases has caused the improving footfalls to fall again by 10-15%.
- The individual retail shop owners are seeing more footfalls than malls, but the consumer is focused on buying rather than spending. So apart from essential goods, others are struggling to pick up pace.
- Many major global retail outlets like JC Penny, Neiman Marcus filed for bankruptcy.
- According to Astro Strategist Hirav Shah, a mall’s success is attributed to the combined effect of the Moon (influences mind) and Mercury (influences communication). Fear of Covid-19 has weakened of these factors causing a massive effect on sales.
According to Hirav shah 3 strategies be undertaken to make a smooth transition to a ‘Good Period’.
1. The Offline Approach
This is dependent on footfalls which has increased post lockdown in retail stores. However, malls are yet to see much change. The ‘Good Period’ for malls will begin in Nov 2020, increasing the footfalls by Feb 2021 and by June 2021, greater footfalls & positivity will be seen. Opening of cinema houses will offer people more reason to visit malls and get over their fear.
2. The Online Approach
This strategy seems to be winning as of now. Majority of retailers can look upto offering their products to a larger section of consumers. Buyers are afraid to get out and shop, so you can deliver to their home! Also, JioMart will prove quite advantageous to the retailers. Digital media is a major tool in the next few quarters.
3. The Hybrid Approach
Covid-19 Pandemic has encouraged this approach for both mall outlets & retail stores. According to Hirav Shah, businesses should focus equally on online sales while continuing the offline approach. It will also assist present employments and salary payments. This is the next wave in the retail industry. Prepare in advance!