The of small specialty shops leading via
The history of shopping malls goes as earlyas 1922 when the world’s first shopping mall was opened near Kansas City in USA.
From its inception, it has passed the test of time and has become a part of theeconomy and modern day retail industry. In the early days the malls were morelike shopping centres with similar type of products being available in most ofthe stores. It had a series of small specialty shops leading via a pathwaytowards a departmental store. This store acted as the anchor to attract thecrowd. The idea was to attract people to the anchor store who would indulge inshopping in the specialised store on their way. These centres were ideallysituated near the highway with free parking facilities. The enclosed,climate-controlled indoor mall was introduced by Victor Gruen, an Austrianrefugee who fled from the Nazis, at the Southdale Shopping Center in Edina,Minnesota, a suburb of Minneapolis, in 1956. The enclosed, indoor model withcontrolled temperature became famous and after few years, open air shoppingcentres were not preferred by the customers.
TheIndian retail industry in the last 7 decades has slowly emerged as one of themost dynamic industries due to the significant growth opportunities availablein this India. Retail industry currently accounts for over 10 per cent of thecountry’s Gross Domestic Product (GDP) and more than 8.5 per cent of the totalemployment generated in the formal sector of the country .India is currentlyranked as the world’s fifth-largest global market in the retail space due tothe ever-growing domestic demand. Indian Retail Industry has immense growth potentialas India has the second largest population with affluent and expanding middleclass, rapid urbanisation. India’s retail market is poised to continually grow at aCompound Annual Growth Rate (CAGR) of over 10 per cent to US$ 1.
6 trillion by2026 from the current US$ 641 billion in 2016. The Total retail market comprisingof the organised and unorganised retail sector is expected to grow at over 11-12 per cent per annum. Indian retail market is classified into “OrganisedRetail Market” which is valued at $60 billion which is currently only 9 percent of the total sector and “Unorganised Retail Market constitutes the rest 91per cent of the sector.
Malls belong to the organised retail market. Malls comprise the official retail sector. As per IBEF, Shopping malls are defined as “one or morebuildings forming a complex of shops representing merchandisers, withinterconnected walkways enabling visitors to walk from unit to unit.” Unofficially,they are currently the heart and soul of the communities everywhere, the grass rootfoundation of the retail economies, and a social meeting point for theteenagers everywhere. In recent decades, the concept of the shopping mall,which has its beginning in the U.S.
and became a modern retail face across theworld in the post-WWII Years, has proliferated across the whole globe. Despite its uniqueness andplethora of offerings, the malls across the world are currently at a criticalinflection point owing to various economic, policy related and geopoliticalfactors. Many global trends are happeningsimultaneously to cause malls to change the role they play in our lives.Customers are thinking beyond shopping. Now, when consumers visit malls, theyare looking for customer experiences and unique offerings that go well beyond thearena of traditional shopping.
Malls need to move in a differentdirection, staying away from their commoditized shopping experiences and towarda unique value proposition for consumers. Innovative and Gen next malls across the world areincorporating different value-addedelements that perceive the mall as the new downtown, including concerts, arts centres,spas, fitness clubs, and farmer’s markets. These distinct services provide a variedlevel of entertainment packages and leisure options that may not be fulfilledvia online shopping. The gen next mall features play options like ski slope, gokarts, balloon rides, bowling and billiards.From thetenant mix concept, innovative and gen next malls are strategically realigning thetypes of differentiated stores and options that will elevate customer delightand joy. Anchor tenants that drive the mall traffic are still critical, but anew emphasis on a curated mix of smaller stores that add a sense of novelty tothe mall offering.
Additionally, some malls in India are making optimised useof temporary, flexible spaces that can accommodate different stores over time. Themelaunches, Car launch, Movie Audio launch, Kiosks, Regular Pop up stores,showroom spaces provide customers with a sense of the unexpected and elevatetheir joy.It is critical that these shoppingmalls should be more than the stores present in them.
The mix of tenant/publicspace is currently shifting from the current 70/30 to 60/40, or even 50/50.Thestores generate additional traffic for the malls while maximizing ROI. Othercommercial real estate opportunities that can add additional revenue to themalls are hotels, office buildings and airports.It was found that people preferredgoing to malls either in large groups or single. This suggested that the reasonfor this behaviour was because the mall supported social interaction. Studieshave shown that the social nature and atmosphere of the mall contributes to itsprofitability and popularity.
Consumers find a motive, be it social orpsychological, to go to malls and purchase beyond the necessary purchases.These are mainly that type of consumers who view shopping as a social andrecreational outing rather than a necessity. “The retail trade centre hashistorically been the setting for cultural and social events. In contemporarysociety, the shopping mall is the retail trade centre. It is an arena whichfosters community interaction and exchange of information, a functionpreviously served by the farmers market, the church, or the pub”.
The socialinteraction in the shopping mall was more akin to that of the local farmersmarket than the super market. This happened because the interactions thathappened within the people visiting the malls and amongst the buyers and shopowners in the mall was of the similar intensity of that of the local farmersmarket. In a typical farmers market, the sellers and buyers engage inconversations thereby increasing the satisfaction level. However a typicalsupermarket does not encourages customer engagement at that level, and withoutany additional incentive to be there other than the purpose of buying things, peoplefeel more attracted towards a shopping mall compared to that. The image of astore present inside a mall and the one situated in the downtown shoppingdistrict was different as well. People tend to prefer the stores in the mallcompared to the store outside as it felt more sociable. This factor reinforcesconsumers buying behaviour.
By 1970’s it was reported thatAmericans were spending more time in the shopping mall that any other place,other than work or home. The “mom and pop” stores, individual specialized shopslost its charm. People of all age group started thronging the shopping malls.They regarded it as a clean, convenient, safe and cheerful place compared toother downtown stores. It had become a place where senior citizens could roamaround securely in comfort, where parents take their kids to see Santa Claus,teenagers socialize and singles court.
People preferred going there when therewas nothing better to do. Thus it lead to a study which felt that “there issomething social going on in the mall”. Part of the success of the retail mallwas attributed to the socially stimulating environment that it offered. Peoplefelt more satisfied after visiting a shopping mall because of the level ofsocial interaction they had.
This was found through a study where thecomposition of people visiting a downtown shopping area and the local shoppingmall was compared, along with it social behaviour in the shopping mall and thestores in mall were compared to that of stores that were situated in shoppingcentres or downtown shopping district. This study gave a detailed insight intothe Psychology of the people visiting the shopping mall and the reason theyprefer to go there compared to other shopping areas. The objective of this study is to understandthe various dimensions of customer relationship in shopping malls and how itimpacts customer satisfaction: