Mall Management

Present Environment
Lack of quality locations Shortage of trained staff Rising rental values Mall management The first 3 can be classified as external factors which are common to all players Mall management is internal & specific to individual malls Success of Indian malls will not only be achieved by housing the biggest & best mix of retails but Also by setting new standards & procedures in mall management which will provide a Platform to differentiate its products & services from competition Presently both consumers & retailers have limited choice

Future Environment
As organised retail grows, market will be more competitive by providing more choice to consumers & retailers Consumers & retailers will be attracted to malls that are professionally managed, making effective mall management a critical factor for success What is Mall Management?

Mall Management Broadly Includes

Positioning of a Mall Zoning Formulating the right tenant mix & its placement in a mall

Marketing & Promotions

Facilities Management Infrastructure, Traffic & Ambience management Finance Management

Positioning of a Mall
It refers to defining the category of services offered based on
Demographics Psychographics Income levels Competition in neighboring area i.e. extensive Market Research of catchment

Positioning also refers to the location of the mall as good positioning depends on good location

Right Tenant Mix

Tenant mix refers to the combination of retail shops occupying space in a mall A right tenant mix would form an assemblage that produces Optimum
Sales Rentals Service ROI

Zoning
Zoning refers to the division of mall space into zones for the placement of various retailers Mall is dependent on the success of its tenants, which translates into financial feasibility There are two types of consumers visiting malls
Focused buyer : Spends less time, difficult for retailers to attract. They usually know what they require & from where to buy Impulse buyer : They enjoy window shopping.

Right tenant mix & optimum retailer placement after a diligent zoning exercise can help retailers attract both type of consumers, specially the impulse buyers

Zoning & Tenant Mix Benefits

Formulating the right tenant mix based on zoning benefits
Attract & retain shoppers by offering them multiple choices & satisfying multiple needs Facilitates smooth movement of shoppers within the mall Avoiding clusters & bottleneck Helps influence shoppers mall preference & frequency of visits Helps building a distinct image in the mind of shoppers & develops loyalty

Successful execution of zoning exercise is carried out through lease management on an ongoing basis

Promotions & Marketing

Promotional activities & events in a mall form an integral part of mall management Activities like Customer contact/Direct mailers Analysis of Footfall & Conversion Analysis of Sales for each Tenant Food festival Cultural events Handicraft exhibition Celebrity visits/Events which increase foot traffic & sales volume Marketing activities can be Mall management funded/initiated Contribution from all tenants Category wise promotions Funded by brand/company

Such activities may also act as a differentiator for a mall

Mall Marketing
Elements of mall marketing
Create specialised marketing programme for different customer groups which will increase their frequency of visit to the mall & increase time spent per trip to mall Always try to create organised chaos & be experimental with your marketing programme Target your immediate catchment as todays destination mall will be your neighbourhood mall tomorrow

Objectives of Mall Marketing

Increase net operating income Sustain growth through sales promotion Increase market share Managing greater competition in market Increase frequency of customer trips Increase length of customer visit

Maximize avg. sales transaction

Increase number of store visit per trip to mall Sponsorship, Brand Space Selling, Kiosks etc.- Maximize alternative revenue

Facility Management
Facility management refers to the integration of
People Place Process Technology in a building

It also means optimum utilisation of resources to meet organisational needs

FM broadly includes
Infrastructure: Power/Safety/Misc(Toilet/Sinage/Water) Ambience: Green Area/Fountain/Garden/Flower Traffic: Foot Traffic management in mall & parking facilities

Finance Management
Mall management also covers financial management, which involves monitoring & controlling of various issues such as: Cash receipt & collection of income including Rentals Service charges Car park receipts Electricity & other utility income Developing accounting system to track Ageing of debits Payment delay patterns Bad debts Payment of all invoices & expenses Developing standard financial templates for preparing annual property budget Organising resources for internal & external audit

Mall Management-Indian Issues

Lack of Feasibility/Market Research Zoning

Design
Few Promotional Activities Parking

Mall Building Cost-Case Study

Mall Economics: What it costs to build a mall of 5 lakh sqft ? Land: Rs Rs 800 per sq. ft. Mall size: 400,000 sq. ft. (4 floors of 1 lakh sq. ft. each) Construction cost (bare shell): Rs 800 per sq. ft. Interior fit-out (including AC) cost: Rs 2,500 per sq. ft. Equipment Cost: 6 Escalators: Rs 40 lakh each 4 Elevators: Rs 30 lakh each 2 Air-conditioning plants: Rs 1 crore

2 Gensets: Rs 35 lakh each

Approval fees/Misc. expenses: Rs 150 per sq. ft. Marketing cost: Rs 150 per sq. ft.

If GLA is 0.70 what will be your rentals to recover the cost in 5 years