Mall Talk Issue July - 01 - Scai.in

S CA IIssue-0 6 l Vol-04 l July 2013Shopper TalkWhat do shoppers look for in sales?Everything and the world, theysay : The year round a shopper mayvisit a shopping...Read MoreIndustry TalkBijou Kurien, President & ChiefExecutive-Lifestyle, Reliance RetailLimited : Internationally, the salesseasons are more... Read MoreEvent TalkImportance OfSales Seasons In Indian RetailIndustry stakeholders tell us how can Indian shoppingcentres maximise the benefits of the end-of-season-sales.End of Season Sales (EOSS) are the highpoints of Indian shopping centres all July.Reports from various shopping centres indicate that sales have shown up to 40 percent year-on-year growth. How can Indian shopping centres adapt themselves tomaximise the good that comes from EOSS in January-February and July-August.Retailers in most categories announce sales with offers ranging from 30 to 70 percent, maximising their gains by sporadic sales throughout the year.Industry stakeholders say that promotions increase both footfalls and revenue.“Sales season generally witness a 40 per cent increase in...Read More‘shop-o-tonic’“We don't want to push our ideas on to customers; wesimply want to make what they want.”- Laura AshleyMoreSCAI Organises Networking EventsIn Collaboration With ICSC : In thewake of the exciting development ofShopping Centres...Trade TalkGovt. Likely To Ease SourcingNorms : In what is bound to bewelcome news for the Indian retailsector, it is likely...Read MoreRead MoreMembership Info & BenefitsTo make the most of SCAI’smembership benefits and infolog on to: www.scai.in/Content/Benefitstomembers.aspxContact:SCAI, Paradigm 'A' Wing, Ground Floor,Mindspace, Chincholi Bunder, Link Road,Malad (West), Mumbai - 400 064T: +91-22-2880 4316/4319E: membership@scai.inDisclaimer: MALL TALK, is a monthly online press digest and carries original interview based articles as well as carries excerpts from leading voices inthe retail and reality sector. It also carries edited extracts from news stories published in leading publications. While MALL TALK takes fullaccountability of original articles, in case of news stories it does not vouch for their authenticity. To view the complete story of MALL TALK, click on thelink provided for the article. MALL TALK is not responsible for failure to receive its newsletter due to spam filters, address-book filters, filters imposedby Internet service providers, or inability/failure of subscriber company's email servers or its Internet service provider to deliver the newsletter.Design & Content - EVERYTHING GOES! COMMUNICATIONS l www.everythinggoes.in

S CA IIssue-0 6 l Vol-04 l July 2013Importance Of Sales Seasons In Indian RetailIndustry stakeholders tell us how can Indian shopping centres maximise the benefits of the end-of-seasonsales.End of Season Sales (EOSS) are the highpoints of Indian shopping centres all July. Reports from various shoppingcentres indicate that sales have shown up to 40 per cent year-on-year growth. How can Indian shopping centresadapt themselves to maximise the good that comes from EOSS in January-February and July-August. Retailers inmost categories announce sales with offers ranging from 30 to 70 per cent, maximising their gains by sporadic salesthroughout the year.Shibu Philips,Business Head, Lulu MallIndustry stakeholders say that promotions increase both footfalls and revenue. “Salesseason generally witness a 40 per cent increase in revenue and 15 per cent in footfalls forthe mall. During a normal period, the conversion percentage is generally between 25 to 30per cent, which will increase to 60 to 70 per cent during the sales season,” says ShibuPhilips, Business Head, Lulu Mall.Mall management professionals agree with the concept. “Customers hold back theirpurchases specifically for the sale period to get more value for their money. The seasonattracts huge footfalls and helps to boost the retailer's revenue. There is almost a doublejump in footfalls and revenues which creates a win-win situation for all stake holders,” saysMukesh Kumar, Vice President, Unique Estates Development Company, which owns Infiniti Mall.Bijou Kurien, President & Chief Executive-Lifestyle, Reliance Retail Limited, says that the impact of sales andpromotions is even higher in malls compared to high street shops. “Promotions and sales have an impact on retailers– those on the high street and in malls. However, given the tendency for impulse shopping in malls, the impact inmalls is relatively higher. Normally, the expectation is that sales would double over the normal average during thesales season,” he says.For some shopping centres, sales and footfalls are not necessarily related. JonathanYach, Chief Executive Officer, Propcare Mall Management (India), says,“Interestingly, whilst sales increase substantially over sales periods, footfall rarely risesmore than five per cent above the mall average growth for that period.”International norms dictate four seasonal sales, to clear the stock of the previous seasonand to introduce the new season's merchandise. Retailers across the world also create andcelebrate occasions and festivals such as Mother's day, Father's day and Valentine's Day.“Every change in season, international or national, the basic norm is stock clearance. Atother times as well certain brands have regular offers on certain stock which is marked asa separate discount/offers section in the store. For example, Zara gets 75 per cent new inventory in all their storesevery three weeks. The rest of the inventory is put on sale or on special offers in a separate section,” says Philips.In India, consumers and regions react differently to both the sale periods. Kumar says, “There is a lot of differencesince it's a clearance of stock in the season's end. So we see Jan-Feb with a lot of winter collection and cool colourschemes and July – August with a lot of summer collection and warm, vibrant colour scheme. Traditionally July-Aughas been a better season.”Jonathan Yach,CEO, Propcare MallBackNext

S CA IIssue-06 l Vol-04 l July 2013Mukesh Kumar,Vice President, Unique EstatesDevelopment Companylooked upon marketing activity,” says Philips.Kumar says that the world economic downturn has not impacted the fashion conscious whocontinue to shop, on the back of disposable income. However, Kurien says that the globaleconomic downturn has seen increased promotional activities. “The tendency to go on salehas only increased due to the past and current slowdown that we are witnessing. Whilethis temporarily helps to increase sales, it is not sustainable in the long term,” he says.In some markets, the downturn has resulted in structured, long term changes. “The onlychange witnessed during the recession in 2009-2010 is that the sale period was extendedby retailers to a 45-day period instead of the normal 20-30 days. Another noticeablechange that has been observed is that certain brands are now manufacturing specificallyfor the sale period. Instead of just being a stock clearance activity, sales are now a muchFor sales and indeed the shopping centres to be sustainable, stakeholders need to work in cohesion. For malls thathave a revenue share models, there are various combinations that suit both parties. “When sales rise, revenue sharein that month rises too,” says Yach.But, even who don't work on shared revenues, there is much to do. Kumar says, “As a mall we do loads of marketinginitiatives to encourage our tenants during their sale season. We plan a Flat 50 Per Cent off day in which more than100 brands participate. We extend ourselves and promote this day so that it helps in boosting the sale of the retailersand exert a pull on footfalls to the mall. Our marketing campaign runs through print ads, radio, outdoor hoardings,social media and online forums and in mall communications.”Given that sales seem to driving revenues – reports indicate that sales have zoomed up 40 per cent Year On Yeargrowth – is it not in the interest of the mall management to encourage them?Philips tells us that the norm is that at the time of signing the revenue share deal itself, a lesser percentage is agreedupon as the revenue share during the sales period. However, he says, “In case of revenue share as well, an increaseof 40 per cent is seen in the revenue during sales.”In fact, retailers in shopping centres, with revenue share models, have worked out for the benefit of both parties.They have it better than the high street retailers who are bearing the brunt of soaring rentals in tier-I cities.Kumar points out, “We do not operate on revenue sharing model. But, generally, on a revenue sharing model theprofits are marginal during the sales season. However, it generates huge turnover and also clears the dead stock.Revenues go up during the sale season giving more share to the developers.”Most shopping centres see the benefits of EOSS. Kurien says, “Malls can do a lot to supportthe sales periods of retail stores. Orchestrating the selling seasons, ensuring that retailerswithin categories complement each other, optimising the sales schemes of differentretailers to prolong the overall sales season,” are some of the measures he lists, along with“freebies thrown in by the malls such as lucky draws, coupon schemes.”Philips gives an example of Lulu Mall and shopping centres. He says, “Most mallsorchestrate a complete event out of the sales period. Some malls do one day off, some flat50 per cent off and there have been cases of the stores being able to do the whole month'ssales in a single day. Other malls do extended events with shop and win contests andother entertainment activities to cajole customers into shopping more. At Lulu Mall itself,we are combining the salesBijou Kurien,President & Chief ExecutiveLifestyle, Reliance Retail LimitedBackNext

S CA IIssue-06 l Vol-04 l July 2013period with the NRI's homecoming and running a 54 day NRI festival, where the focus is on all the offers/sales in themall. This is combined with unlimited entertainment and exclusive discounts for the NRIs.”Given that consumers are spending during the sales season, concentrated efforts by all stakeholders will result inbenefits for all. As Kumar says, “Unknowingly or knowingly all of this is a circle. During sales, consumers are on aspending spree, and this, in turn, increases the revenue of the retailers. When retailers are doing well it onlyincreases the sustainability of the brand in the mall. Sustainability assures the steadiness and constancy of the mallrentals.”“Every sale has five basic obstacles: no need, no money,no hurry, no desire, no trust.”- AnonymousSHOPPER TALKSales Ahoy!What do shoppers look for in sales? Everything and the world, they say.The year round a shopper may visit a shopping centre for various reasons – family time, watching a movie,sampling food at the newest restaurant or window shopping. But come the sales season and a shopping centrebecomes the hub of focused activity. Lists come out, both to do with wishes and needs. Budgets are prepared inadvance. And shoppers plan their time at various malls.“I think the only people who shop on regular prices are the ones with unlimited budgets, limited time and a need,”says Krishna Jain, a Delhi-resident who is known to be a keen shopper amongst visiting friends and relatives.“If we are shopping for a wedding, all bets are off. But otherwise, most of us now plan our shopping to coincide withthe sales season,” she says.Her opinions are shared by many shoppers who have come to value theoffering and effort by various retailers in their shopping season.“Earlier sales were an effort to sell unwanted stuff. We all knew that theprices were artificially hiked and then reduced on labels. Now that is notthe case. Shopping centres and retailers provide real value duringsales,” says Mamta Kapoor, a Bhopal resident who is travelling toMumbai during the season.Far from being focused on only fashion, sales at the best destinationsoffer discounts on everything from furniture to the right television andaccessories. But not everyone waits for the sale.“I have actually bought something a day before and a day after it reduced to half price. It was a bedside table and IBackNext

S CA IIssue-06 l Vol-04 l July 2013had the other one. Since I needed a matching one and I had already gone to a couple of stores belonging to thesame brand, when I found it I did not think twice. Since it was sandwiched between sales the price on the cataloguewas about 40 per cent less than on the computer inventory. But I bought it,” says Mridul Garg, a Pune-basedshopper.The same is the case with highly fashion conscious shoppers who will not be caught in last season's clothes. Eventhey shop during sales.“I have friends who shop anytime, more or less. In their wardrobe thereis always room for jeans and t-shirts. So sales are a good time to stockup on those. But my colleagues and friends are very fashion conscious.If they want to go cheap, they actually pore over fashion magazines andcreate that look by visiting export special shops and the like. But theyknow instantly when someone wears the last season's dress thisseason,” says Kapoor talking about her friends in Delhi and Mumbai.Wish lists are many. Creativity is usually appreciated but, so is clarity.Shoppers notice when retailers take care to stock up and not finisheverything on the first few days. “In Delhi and Mumbai I have seenshops where retailers change the stock through the sales period, so it's rewarding to go again and again. On theother hand, we notice if there is only some rundown stuff available,” says Jain.Garg agrees. He appreciates the chance of real, focused shopping, but with extras. “Service staff that is trained towork with the extra stress during sales is a boon. Whether it is at the shop itself or at the mall level, we alwaysnotice that someone is courteous and helpful during the rush,” he says.Clearly, sales work for the shopper and retailers!INDUSTRY TALKBijou Kurien, President & Chief Executive-Lifestyle, Reliance Retail Limitedon “Impact Of Sales On Mall Rentals”Bijou Kurien,President & Chief ExecutiveLifestyle, Reliance Retail LimitedInternationally, the sales seasons are more pronounced with four distinct seasons, prior tothe introduction of the new season's merchandise. In addition to this, depending onspecific festival and anniversary days, many retailers also hold special sales for Mother'sday, Father's day and Valentine's Day.In India, January-February EOSS is more region-specific because of the higher proportionof winter wear which goes on sale. The North and East tend to benefit from sales duringthis period.However, the July-August EOSS is more national in terms of impact. For every retailer, theannual revenue comprises periods of full price sale along with seasons of discounted sales.Mall with rentals normally average the sales during these different periods. Hence, the impact on mall rentalsbecause focussed sales effort is not very high.BackNext

S CA IIssue-06 l Vol-04 l July 2013Shibu Philips, Business Head, Lulu Mall on “Impact Of Sales On RevenueShare Deals”In the case of revenue share, an increase of 40 per cent is seen is the revenue duringsales. But in most cases, at the time of signing the revenue share deal itself, a lesserpercentage is agreed upon as the revenue share during the sales period.Sale is a global norm and provides an opportunity to customers to meet their aspirationswith regards to shopping. Several brands which the customers felt were out of their reachotherwise, becomes affordable to them during the sales period.As far as mall rentals are concerned, what needs to be understood is that malls are notonly about fashion. There are several other categories like the hypermarkets, movies,electronics, entertainment and food which are not sales related. These categoriescontribute majorly to the revenue of the mall. Fashion mainly attributes to a planned purchase unlike othercategories.Shibu Philips,Business Head, Lulu MallEVENT TALKSCAI Organises Networking Events In Collaboration With ICSCIn the wake of the exciting development of Shopping Centres Association Of India's (SCAI) tie up with theInternational Council of Shopping Centers (ICSC); the two industry bodies have pledged to work togetherto provide education, advocacy, research and networking opportunities for the retail real estate sector inIndia. This collaboration will see development of publications, workshops, programs and events.One of the first set of events has been lined up from July end till 1st week of August, 2013 across the citiesof Bengaluru, New Delhi and Mumbai.The Networking events will include lively panel discussions amongst Industry leaders, followed by a cocktailreception where one can meet the speakers and network with industry colleagues. For details see box.City Date and Time Venue For RegistrationBengaluruJuly 30, 2013 at 5:30 pmOakwood PremierPrestige, UB Citywww.icsc.org/2013S46New Delhi – NCRAugust 1, 2013 at 5:30 pmThe Westin Gurgaonwww.icsc.org/2013S47MumbaiAugust 6, 2013 at 5:30 pmThe Westin GardenCity, Goregaon (E)www.icsc.org/2013S48These events are designed to spread awareness about the collaboration and the information on benefitsof membership, education, advocacy, workshops, certification and research for the Indian sector.Participants of the event will discover what has been planned for the coming year, including detailsabout our first-ever Educational Seminar in November.For further details you can get in touch with Ms.Christabelle Flanhardt at cflanhardt@icsc.org.BackNext

S CA IIssue-06 l Vol-04 l July 2013TRADE TALKGovt. Likely To Ease Sourcing NormsIn what is bound to be welcome news for the Indian retail sector, it islikely that the government may dilute the mandatory sourcing andinvestment guidelines for foreign retailers who are interested inentering the Indian market.It is also likely that the government may give states the freedom torelax the minimum 10 lakh population threshold.This is another attempt of the UPA government to woo foreign retailchains after it gave its go ahead to foreign supermarkets to invest inIndia last year. However, despite the government's effort, noinvestment came in due to lack of clarity on sourcing norms as well as the state governments having the final say inallowing or declining global retail chains operating in their respective states.Hypercity Opens Fourth Mumbai StoreHyperCity has opened its fourth store in Mumbai at Viviana mall, Thane.Spread over 65,000 sq.ft., the outlet stocks products across categoriessuch as food and grocery, fruits and vegetables, personal care, apparel,small appliances, furniture, sports, and fitness. Private labels acrosscategories will also be available at the store.The store will cater to residents of Thane, Mulund, Powai, Ghatkopar andother central suburbs of Mumbai.Zara Records Rs 1.5 Crore Sales In A Day In Delhi StoresSpanish fast fashion retailer Zara reportedly has registered high sales thisseason. According to media reports Zara's store at Select City Walk in Delhiregistered sales worth Rs 96 lakh on the first day of sale. Its store at PacificMall in the capital recorded Rs 65 lakh sales on day one, 15 per cent morethan the first day sale of last year. Its store at Infiniti Mall in Mumbaiwitnessed Rs 1.7 crores in the first three days.Apparel and fashion accessories retailers, who were a worried due to lowconsumer sentiment and slow economy are now pinning their hopes on thediscount season, when consumers usually loosen their purse strings tomake purchases for the year as well as festive season. A lot of personalshopping as well as for gifting happens during this period keeping in mind,the festive and wedding seasons ahead.BackNext

S CA IIssue-06 l Vol-04 l July 2013Krispy Kreme Opens Third Bangalore StoreKrispy Kreme Doughnuts has opened an outlet in Bangalore atForum Value mall, Whitefield, making it the retailer's third store inBangalore as well as the country. Spread over 240 sq. ft., the outletoffers 16 varieties of doughnuts with chocolate, fruit flavours, sugarglazed, cookie and cream cheese toppings.Citymax is a licensed franchisee of Krispy Kreme DoughnutCorporation for South and West India. It had earlier announced anagreement with Krispy Kreme Doughnut Corporation to develop 80Krispy Kreme stores in these regions over the next 5 years. Citymax Hotels India is the hospitality division of theDubai-based Landmark Group.Krispy Kreme is a specialty retailer of sweet treats and complementary products. It is present in approximately 700locations around the world and approximately 10,000 grocery, convenience and mass merchant stores in the US.Inorbit Malls Looks SouthwardsInorbit Malls, a subsidiary of the K Raheja Corporation, is on the lookoutfor more properties in South India, its CEO was reported saying in themedia. In Hyderabad, officials said, the mall company is adding onemore centre at its 10-acre property at Pocharam, apart from looking forproperties in Bangalore and Chennai.The mall major is already negotiating on different opportunities,including on taking over under construction/existing malls.Inorbit Malls, which operates malls in Mumbai, Hyderabad, Bangalore,Pune and Vashi (Navi Mumbai) will open its sixth mall in Vadodara nextmonth.“When we're up, we shop. When we're down, we shop even more.”- AnonymousBackNext