The Mall management strategy that I would be talking builds on the basic idea of interdependence between the Mall and the Retailer. It focuses on the business benefits that can accrue out of collaborated business management between the Mall Developers and the Retailers. This is not to say that the association between these two parties does not exist in the current scenario. Mall developers and Retailers do collaborate, but this collaboration has not been formalized and even when it is formalized, it is rather sporadic in nature. Thus the whole focus of this article is on suggesting a structured and formal way of collaboration between the Retailer and the Mall.
This concept is a whole process of enhancing customer traffic, sharing costs and increasing the profit margins.
Sharing the Burden-Collaborative Management
If we look at the customer's perspective, there are two major benefits that every customer seeks out of shopping in a Mall. One is an overall experience and the other is a whole variety of goods under one roof. These two expectations cannot be met satisfactorily either by the Mall developer or the Retailer. But if roles are clearly defined and each one develops a core competence, then a fantastic synergy can arise between the two parties. The Mall and the Retailer should work out a strategy where the Mall focuses on enhancing the overall experience and the Retailer focuses on the delivering a good variety of products. To formalize this association, there would have to be a clear definition of expectations and most importantly sharing of profits.
To summarise, the nature of collaboration would be:
- Redefinition of relationship between malls and retailers. It is no more the tenant landlord relationship that existed traditionally. Both need to consider each other as partners or associates, where one parties growth is greatly dependent on the other.
- Malls and Retailers work together to offer the Customers the complete experience. This complete experience would include products that can offer value for money on the one hand and attractive entertainment on the other hand.
- Through mutual discussions, collaborative strategy is defined and areas of core competence are identified. Each one seeks to improve and perfect the specific area of Competence. For e.g. Mall Developer could take up the responsibility of organizing promotions, while the retailer plans the merchandise according to the promotions requirements.
Pulling in the Customers
The biggest benefit of this strategy would be in facilitating enhanced customer traffic. Internationally Malls are supposed to be places of entertainment. For e.g. Malls in Germany, U.S.A offer round the clock entertainment services either in terms of carnivals, music shows or events. Mall developers should organize regular events which have the capability of attracting huge masses of audience, which would benefit the occupant retailers hugely. Although while undertaking such events a few things would have to be kept in mind:
1) The events would have to be organized in such a way that Malls do not become merely places of entertainment and buying becomes occasional. In such a case the whole point of organizing these events would be lost. This problem can be tackled by associating a major percentage of the events with direct purchases. Retailers could be intimated about the promotion beforehand so that the retailers organize their merchandise accordingly. Mall developers should come up with a "Mall Events Calendar".