Positioning-Zoning of Malls & Influence of Alternate Asset Classes
Positioning and zoning are critical components that define a mall, they help create its brand image, lend strength to its attractiveness on basis of offered products, services and experiences, which ultimately help differentiate it from the clutter and the competition. These components have a say in overall architecture and designing of the mall, in deciding the optimum tenant mix, in shaping the promotion and marketing plank and in facilities management including ambience, traffic flow, security, rent and other financial considerations.
This article, is part of the ongoing “Retail Real Estate Knowledge Series” platform in run-up to upcoming India Shopping Centre Forum event being held on 11 April 2018 at The Renaissance, Powai, Mumbai.
Architect Reza Kabul of the famed ARK Studios explains the significance of mall zoning in architectural designing of a mall. Dinaz Madhukar, Executive Vice President of DLF Luxury Retail & Hospitality is of the view that efficient positioning and zoning brings success to a mall and helps create a destination in any location. Pankaj Renjhen, Managing Director-Retail Services, JLL India says the focus is now on proper zoning and creating synergies within all categories and sub-segments. Najeeb Kunil, Executive Director of PPZ says providing overall community experience is critical to the success of a mall and its effective positioning and zoning ought to help define and implement the same.
Creating the overall community experience zones
A graduate from Mumbai University with a business program from the University of Michigan and IIM-A, Najeeb has over two decades of experience in the real estate sector. He has been actively involved in closure of multiple transactions in the property segment. He has in-depth knowledge on the local markets, demographics and an extensive network with leading developers, land owners and national retailers.
With more competition in play, along with similar retail brands being present in most malls, the key differentiator for each mall is its Positioning – the plan on how you cater a product specific to each catchment around you. The days are long gone, where offline players can get away without doing detailed research of their customer base, as it is now all about creating the right experience and most importantly creating long term loyalty.
Positioning influences everything
The first decision taken while designing a mall is its positioning, from which all other decisions are influenced – be it the tenant mix, the design, the look & feel, the marketing strategy and also the quality of facilities being provided to the end customer. The positioning is derived keeping the catchment and the primary customers in mind and hence dictates the consumption of the mall, which in turn has a direct impact on the rentals that can be achieved in the mall.
Vega City Bengaluru
Overall community experience is critical component
The appropriate tenant mix, correct pricing and high dwell time formats are essential while planning the mall. These ingredients ensure long term sustainability. Entertainment and F&B play an important role in high dwell time formats, but surely the load cannot be put on these two formats alone to make things work. We do not advocate any particular category based malls as the experience of a shopping centre is becoming one of a community space; hence the overall experience is critical.
Families come out together for an overall outing experience rather than only for shopping. The tenant mix is on an evolutionary change in India since the last 5 years, as India has uniquely witnessed exponential growth in the online space, faster than any other country. To keep up with competing centres and the digital onslaught, it is necessary we focus on trying to make malls a community space, giving more reasons for customers to visit the mall.
Wide options for tenant-mix
Keeping the above in mind, the tenant mix can have more than 30-40 categories, which comprise a mix of:
(a) Fashion-oriented categories (apparel, shoes, jewellery, cosmetics, etc);
(b) Entertaining and high dwell time categories (café’s, casual dining restaurants, food courts, FEC, kid toy stores, edutainment formats, sports oriented formats, etc); and
(c) Daily-need categories (hypermarkets, mobile stores, photo stores, pharmacy, repair stores, home appliances, travel agents, laundry, vehicle wash, etc).
The combination of all these not only provides a larger variety, even in a small mall, but also differentiates from the competition.
Efficient zoning triggers spill over consumption
We have seen over the years that footfall generated in the mall is pre-dominantly driven by the anchors, be it the Hypermarket, the Cinema, the Departmental Stores, Fashion Anchors, Food Court or big category killers like electronics, home, toys, etc. They have a larger following and stronger brand recall as compared to the rest of the mix of line shops designed around these anchors and depend on the anchors to bring customers in the mall – post which the spill over consumption takes place.
It is important to have complimentary categories like cosmetics, footwear, accessories, health & beauty, bags, etc to be placed strategically throughout the mall, allowing customers to experience an overall offering, while shopping. This also ensures larger trading densities for the mall performance, as the smaller categories can do phenomenal sales from very small stores, due to the spill over impact.
Mall of Travancore, Trivandrum
Significance of alternate asset classes
With the burgeoning traffic in metro cities and larger Tier-II cities, most large developments are being poised as mixed-used integrated townships, where one can live-work-play-learn without wasting too much time on the road. An integrated offering always assists in the saleability of each asset class, as they complement each other very well and also ensure that people have a better quality of life.
In such cases our role as design development managers becomes even more important, as we have to always maintain the sanctity of positioning across all asset class. Retail being the most customer-centric, plays a very important role in defining this as the immediate captive audience of the integrated township, becomes the focal point:
- The daily-need requirement of supermarkets to repair stores for the immediate residential population;
- The weekend family entertaining opportunities through restaurants, cinema and FEC for the families living around;
- The needs of office goers in the same community; or
- The monthly fashion boosting offerings for the primary & secondary catchments.
– Oberoi, Mumbai which has mall, Westin hotel, A-grade offices and residential township.
– Seawoods Grand Central, Navi Mumbai, which houses a mall, A-grade office space, and a railway station.
– Upcoming SPR City, Chennai that will have a Mall, whole sale market, offices, residential, hotel and school)
Zoning for synergy between category sub-segments & alternate asset classes
He spearheads the company’s retail services business vertical which delivers leasing, advisory and tenant & landlord representation in India and Sri Lanka. In his 19 years of real estate experience Pankaj Renjhen has advised 100+ large occupiers for real estate across segments.
Retail is a unique and complex asset class, where performance is underpinned by a dynamic combination of property, market, and consumer factors. Increasing competition from online retailing increases the significance of a differentiated experience for attracting consumers to offline stores and malls. F&B and Entertainment are the forerunners of the changing retail landscape and mall developers are increasingly realizing their importance in driving foot traffic. Therefore, zoning and positioning for a retail entertainment mall has become quite pertinent considering the various options that a consumer can choose today.
Taking into account the market demand, mall developers are creating centralized entertainment and F&B options and also constantly revamping existing food courts as per the consumer inclinations. Multiplex players are also upgrading the movie theatres with enhanced F&B options and upgraded facilities.
More space to Entertainment and F&B
The curation of dedicated entertainment and F&B zones are quite significant for shopping malls to sustain themselves. It is quite important to create clustering of F&B and entertainment so that critical mass is created in order to attract larger footfalls. At the same time, quantity of similar offer/ segment should also be taken into account while preparing the tenant-mix so that there is no cannibalizing effect of tenants on each other. The proportion of entertainment has increased in malls over the years, ranging from 13% to 21% in some of the leading shopping malls in India.
Mall-wise Space Allocation between Entertainment and F&B (in %)
Malls are therefore trying to become destination in themselves for reasons beyond shopping. The focus now is not just on including all categories, but in proper zoning and creating synergies within all segments and between retail and non-retail categories. A wide variety of entertainment options now provided by mall developers include multiplex, bowling alleys, scary house, mirror maze, laugh clubs, skiing, etc.
Every category of offerings in the mall would have to enhance the community connections as per the consumer segment they cater. Dedicated spaces for community use or open spaces create avenues for leisure and therefore it is advisable to position the retail developments as social spaces.
SPR City, Chennai
Zoning depends on positioning of mall
The zoning of various categories depends upon the concept or positioning of a mall. A destination or regional mall would require larger space dedicated to social aspects such as Family Entertainment Centres (FECs), high-end Dining and gastronomical offers, in addition to department stores and fashion anchors. Large destination malls also need to intensify their breadth of offer and need to edge out several focal points and zones throughout the retail development.
In a neighbourhood mall convenience along with grocery, supermarket and food would be strongly entrenched in the tenant-mix. Smaller centres also need to incorporate elements such as ATMs, Salons, Spas, Gift Shops, Stationary Stores, Wellness Centres, etc to serve the local population.
Location influences positioning
The location and catchment of a mall also plays a major role in defining the mall positioning and thereby its stacking plan with respect to various categories. The quantum of various categories varies according to market and region and is driven by macro factors such as market maturity, cultural nuances and competing developments. Scale and quality of offer should match the shopper characteristics and spend. In principle, demand and supply should match while defining the positioning of a mall.
Achieving best results through proper zoning and tenancy planning is possible if mall developers design the tenant mix in a way that shoppers make repeat visits such that the retail destination is successful in the medium to long run. A well zoned environment should facilitate integration of technology with retail offer and also highly personalized dining and entertainment offers. The idea is to create a right balance of the tangible and intangible factors such as services, experience and ‘wow factor’.
Zoning for optimum tenant-mix – Customization and in-depth knowledge of customer base, trade area and competition are key to creating the right blend of local, national and international tenants. As the retail market is maturing, there is a need to adopt more structured approach for further segmenting the retail, entertainment and F&B categories. Each sub segment has a distinct trading period, dwell time and technical requirements, and proper zoning takes these into account.
It is necessary to identify the complementary sub-categories that drive additional traffic to dedicated areas. The F&B segment for example can be segmented into impulse, refuel & relax, speed eating, fast casual, casual dining, fine dining and gourmet food.
Shortening of lease length has also benefitted both mall developers and retailers. Regular audit of retailers’ performance has become quite common and leads to curation of new categories and concepts.
Zoning aids focused promotion and marketing – Mall developers are innovating and enticing shoppers through out-of-the-box promotional activities. Dedicated zones are created for conducting events, activities and installation of screens where consumers are encouraged to get involved in these activities. Marketing strategy ought to be integrated from a physical and virtual perspective in order to embed a retail place at the heart of the community.
Zoning and facilities management – While the lobby, surrounding trade area and supporting infrastructure are important determinants of micro location strategies in a shopping mall, value-added services too are a way to foster community connections and elevate appeal of the shopping mall. The focus is to create an environment that attracts and entices people by keeping them engaged. Common area improvement strategies are now being adopted to create zones of comfortable seating, enhancing walkways and improved ambience.
Efficient zoning can trigger impulse buying
Right tenant mix and optimum retailer placement after a diligent zoning exercise can help attract the impulse buyers by triggering spot purchase if complementary categories are placed in key mall intersections and high shopper traffic zones. For example, the strategic positioning of F&B and anchor stores at entry and exit points can draw in additional shoppers’ traffic and also trigger impulse buying and eating. Internationally it is seen that some of the F&B operators have an additional impulse unit in the same mall, apart from the standard outlet.
Café & Gallery, DLF Emporio, Vasant Kunj, New Delhi
Significance of alternate asset classes
If a shopping mall is surrounded by office complexes, then the dominant category can be F&B and convenience. Further segmenting of the F&B Category can be fast casual and cafes that work best in such catchment. Shopping malls within mixed-use developments formulate the tenant mix such as to cultivate new communities and a live-work-play environment.
Non retail asset class create a halo affect driving traffic to the shopping mall as well. Example of retail within mixed-use development includes Seawoods Grand Central in Navi Mumbai which is a combination of commercial, retail and hospitality. Select Citywalk in Delhi is also part of a complex that comprises of office space and serviced apartments. Planning a shopping mall within a mixed-use development entails market intelligence and strategic planning with regards to the zoning and creating synergies between various uses.
Positioning & zoning is the key to mall success
In her earlier role as senior VP of the company, Dinaz Madhukar headed the operations of DLF Emporio and DLF Promenade malls at Vasant Kunj in Delhi NCR. An alumni of IIM-B and a Law graduate, she has 27+ years of experience in varying capacity, which includes a stint at The Taj Group, before joining India’s top realty firm DLF.
Malls – the perennial favourite of urbanites and now increasingly the smaller towns too, are a great place to spend quality time with friends and family. Considering that India is one of the fastest growing economies in the world and has the second largest population with a growing middleclass base, it has always been perceived by global brands as a lucrative market. Climate vagaries, besides the infrastructure pitfalls, make sure that high street in India remains a secondary option, next to malls.
Why do some malls work and many more don’t? If “Location, Location, Location” is the magic mantra, then within the same location why do we prefer one mall over the other?
We do have the herd mentality and when something works, everybody jumps on the bandwagon. There is nothing more sad than seeing malls derelict of brands and slowly being converted into office spaces, banks and even banquet halls.
So then, back to the question…. why do some malls work?
Though location is key, it isn’t the ONLY requirement. Destinations can even be created. The Vasant Kunj complex of DLF Emporio, DLF Promenade and the Ambience mall is a prime example of a created destination. Particularly for DLF Emporio as Vasant Kunj isn’t the heart of luxury and is mainly a middle income residential area. Yet it works and it works great. It still is among the first and best luxury retail destinations in the country.
The Chanakya, New Delhi
Ten years apart, in Chanakyapuri, The Chanakya mall has discreetly opened its doors in a natural location for luxury surrounded by many Embassies, a high net-worth residential zone and multiple five star hotels. This location is a no-brainer. Brands have bought into the location as have the customers. It houses iconic brands like Hermes and Rolex, as well as aspirational brands like Ted Baker, Thomas Pink, Diesel and homegrown brands like Janavi, Nicobar, Paro & Shalimar by Goodearth, Grassroots by Anita Dongre, Ranna Gill and Neeru Kumar, with many more to open shop.
So again, what works?
You first need to identify the positioning of your mall. What do you aspire to be – a neighbourhood mall, a fashion destination, a food hub, a regional mall; luxury, premium, larger than life? Basis this, you need to plan and zone the mall.
Ideally, for a destination mall you would need a judicious mix of retail, food and entertainment. Malls are the favourite hangout spaces for the urbanites and a great place to spend quality time with friends and family. We do not like to either shop, dine or even catch a movie alone. Hence we need to cater to all of their needs. These days, retail and food/ entertainment are both drawing equal footfalls hence getting the percentages right is critical. A ball park figure would be 60-65% retail (including food retail) and 35-40% food and entertainment.
Next comes the zoning. The layout of the mall needs to excite the customer, draw them in, and then enlarge their footprint by retaining them for longer in the mall.
- Easy picks, i.e. pocket-friendly yet eye catching retail needs to be upfront. In this category are cosmetics, accessories including watches and jewellery, chocolatiers and patisseries.
- Then comes fashion retail with the biggest brands being strategically located to encourage the customers to walk through the entire mall.
- Usually, entertainment requires the largest area – cinemas, video gaming parlours, virtual reality parlours, and these are natural draws, hence they can be located either on the topmost level or then the lower ground levels.
- Food retail has large shopping tabs due to weekly/monthly shopping, hence these are ideally located closest to the parking to ensure trolley movement without hindrance.
- So too, the home zone as they require large areas and access to service elevators for carting.
Food is a necessity and food courts are best placed enroute to the entertainment zone as both of these go hand in hand. Depending on the size of the mall, restaurants add to the draw factor for customers. A wise selection of brands featuring varied cuisines adds to the attraction. By and large, fine dining options do not work as well as casual formats as the time for dining is generally rushed basis movie hours, shopping time, and entertainment time.
There are two opinions in this regard. One is creating an exclusive food zone which works well from the mall’s perspective as it is easy to arrange the exhausts, give adequate water/drain lines, enhance air-conditioning loads, et al. The other thought process is to spread this (food service options) around. This is particularly significant when the format of the mall is large. You would need to intersperse retail with food as people need places to unwind and sit in between their shopping bouts. Since malls are all about the commercial aspect, seating for customers is limited. Having cafes in multiple locations encourages people to rest a bit. Food retail ensures repeat customers as this becomes the ‘go to’ destination for your grocery shopping.
A prime example of a well-designed and zoned mall is the newly opened Mall of India in Noida, Delhi NCR, which despite its large size, creates an ideal shopping atmosphere and offers retail, food and entertainment in equal measures. It has been a success from the word go and this is apparent in the brands it carries as well as the footfalls it draws.
The success of the mall depends eventually on the quality of the footfalls and their propensity to spend. Most developers ignore the basics. Adequate security measures, adequate parking facilities and most importantly adequate hygiene facilities will encourage customers to spend more time at the mall. This in turn translates to more money spent per footfall at the mall. If you are a family mall and therefore kid friendly, do offer kiddy zones.
Repeat guests, longer time spent at the mall, more experiences, equal focus on retail, food and entertainment and of course our initial “location” mantra, all help in the success of a mall.
Zoning & Traffic Circulation are crucial to mall design
Amongst the foremost talents in the realm of modern day Indian architecture, Reza set up his firm in Mumbai in 1988 and later expanded with his ARK Studios in Pune and San Francisco Bay Area, US. He has delivered path breaking projects centred on the design philosophy of ‘liberated spaces’. His work Shreepati Arcade (2003) is listed in the Limca Book of Records and his signature projects can be found in the USA, India, Mauritius, UAE, Sri Lanka, Sudan, Bhutan and Kenya.
Every retail entertainment mall is built with a unique identity and thought-process, focussed on the audience and product it caters to. The architecture and design of any space, is driven by the function of the space, its locale, and its user. Understanding this helps define the character of the space, and the base of its design.
The design of a mall caters to a footfall much larger than any other vertical, including hospitality. To create a space that is capable of catering to such crowds, as well as ensuring its longevity requires special design considerations. Two key elements which need to be considered while planning a mall include “Zoning” and “Circulation & Traffic Management”. While these may seem as rather basic elements, they are the key to a successful mall design.
Design as per zoning
Efficient zoning is achieved from understanding visitor habits, and their expectations out of the space. While optimizing the circulation space is ideal, the overall distribution of spaces need to be centralized.
Experience dictates that key brands act as anchor stores which are at the lower levels, then followed by the mid-sized retail spaces on the levels above, and the entertainment at the top most levels. This does not rule out the option to have a small mix of these on each level.
While the commercials of the space are key to the developer, the design should not lose vision between increasing selling space and drifting away from the concept and soul of the space. Accessible connections to the various touch points, including the pedestrian entries and car parks, are also part of the zoning of the space.
Designing for traffic flow
Another key aspect is circulation & traffic management. Navigation is one of the key recall values of a mall and has a large impact on the visitor experience. It is advised to keep away from multiple aisles, and confusing pathways and instead have a unified floorplate across all the levels.
The placement of escalators and elevators need to be focussed on convenience and safety and not with the intent of the visitor covering more floorplate. This also extends to vehicular traffic. The increasing number of vehicles demand larger parking spaces, as well as attention towards decluttering entry and exit points and streamlining the collection and access structures.
Designing per alternate asset classes
When bundled as a mixed-use with an alternate asset component such as commercial, residential, or hospitality components, the emphasis on circulation and traffic management is utmost. To ensure the smooth functioning of each of the verticals, separate access paths, entry and exit points should be designed.
Our design for Raghuleela Mall was on a land parcel that allotted 40% towards commercial and retail purpose, while 60% would be an IT park. This lead to the conceptualization of designing a mixed-use structure hosting a mall, multiplex, banquets and gym with swimming pool for the 40 % while the remaining 60% remained the IT park. We ensured that each of these services had its individual access points, making sure that there is no overlap of visitors and the exclusivity of the spaces are maintained.
Today, the global scenario of retail entertainment malls is changing, with a major part of retail moving online. Consumers are opting the ease of ordering, with delivery and exchange options on their fingertips. Planning the spaces more viably is therefore key to the design for a successful REM.