1176. future of mall management in delhi & ncr region
DESCRIPTION
Project report published by Anand JaiswalTRANSCRIPT
RESEARCH REPORT
On
“FUTURE OF MALL MANAGEMENT IN DELHI & NCR REGION”
SUBMITTED TOWARDS PARTIAL FULFILLMENTOF
Master of Business Administration Degree(Affiliated to UPTU, Lucknow)
(2008-2010)
SUBMITTED TO: SUBMITTED BY:DR. S. K. Mishra SANDEEP KUMAR GAUTAM MBA (HOD) MBA IV SEM
B.B.S INSTITUTE OF MANAGEMENT STUDIESGREATER NOIDA
1
TO WHOM SO EVER IT MAY CONCERN
This is to certify that Mr. SANDEEP KUMAR GAUTAM, a student of
MBA 2008-2010 batch, BBS, Greater Noida, has done his live Dissertations
Project under my supervision and guidance.
During his project he was found to be very sincere and attentive to small
details whatsoever was told to him.
I wish him good luck and success in his future.
Dr. S. K. MishraMBA (HOD) BBS INSTITUTE Of MANAGEMENT STUDIES GR. NOIDA.
2
CERTIFICATE
This is to certify that the Research Report entitled on "FUTURE
IN MALL MANAGEMENT IN DELHI & NCR REGION".Being
submitted by “SANDEEP KUMAR GAUTAM” in fulfillment of
the requirement of master of business administration degree,
of U.P. TECHNICAL UNIVERSITY is a record of an independent
work done by him under my guidance and supervision.
Mr. AKHIL AGNIHOTRI
(Lecturer)
B.B.S., institute of management studies
Greater noida.
Date………………..
3
DECLARATION
I, “Sandeep Kumar Gautam” to declare that the Research
report entitled “FUTURE OF MALL MANAGEMENT IN DELHI
& NCR REGION” being submitted to the U.P.TECHNICAL
UNIVERSITY for the partial fulfillment of the requirement for the
degree of Master of Business Administration is my own
endeavors and it has not been submitted earlier to any
institution/university for any degree.
Place:(Sandeep Kumar Gautam)
Date:
4
ACKNOWLEDGEMENT
One of the most pleasant aspects of writing an acknowledgement is
the opportunity to thank all those who have contributed to it.
Unfortunately, the list of expression of gratitude- no matter how
extensive – is always incomplete and inadequate. This
acknowledgement is no exception.
First of all, I wish to express my sincere gratitude to Mr. S.K.
MISHRA (HOD) B.B.S INSTITUTE OF MANAGEMENT
STUDIES, Greater Noida, for giving me opportunity to do research
under her profound guidance. Because of her inspiring guidance,
motivation, positive criticism, continuous encouragement and untiring
supervision this work could be brought to its present shape.
I would like to thank all of them who in one way or the other have
helped me.
Sandeep Kumar Gautam
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PREFACE
The success of any business entity solely depends on how
effectively does it utilizes its optimum resources and how soon
does it make arrangements for the removal of the customer’s
grievances. Moreover, the company should always be ready to
make necessary changes according to the requirement in order to
attract more customers so as to maintain a substantial growth in the
market. The topic given to me was:
“FUTURE OF MALL MANAGEMENT IN DELHI & NCR REGION”
I have tried to put my best efforts to complete this task on the basis
of skill that I have achieved during my studies in the institute.
I have tried to put my maximum effort to get the accurate statistical
data. If there is any error or any mistake in collecting the data,
please ignore it.
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TABLE OF CONTENTS
1 Objective
2 Executive Summary
3 Introduction of Retail to India
4 Mall revolution in India
5 Pragmatic scenario in Mall Mechanism
6 Essentiality of Mall Design Element
7 Consumer perception about Malls
8 Footfall Mathematics
9 Footfall Statistics
10 Mall Profiling of Indian Cities
11 Research Methodology for studying mall revolution in India
12 Data Analysis and Interpretation
13 Graphical Representation & Elucidation
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14 Recommendations and Suggestions
15 Ultimate Prescription
16 Epilogue
17 Limitations
18 Bibliography
19 Annexure – Questionnaire
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Objective
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OBJECTIVES OF THE STUDY :
Analyzing the current retail atmosphere in malls.
Future of mall management in Delhi & NCR Region.
Suggesting a structured format for tenant mix.
Analyzing customer perception towards grocery shopping in malls
and department stores.
Determining if brands influence foot fall.
Analyzing the location for a new mall in Delhi.
For the accomplishment of the above stated objectives a research of
100 samples was conducted over a period of 20 days.
During the course of research primary data was collected through
observations, interviews and questionnaires.
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EXECUTIVE SUMMARY
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EXECUTIVE SUMMARY
For the Indian mass affluent, the call of the mall is proving irresistible. Malls
increasingly dot the urban Indian landscape and their packed parking lots, busy
food courts and restaurants, crowded anchor stores and noisy gaming arcades
bear testimony to this alluring call.
Some would call it consumerism in action, I call it the celebration of mass
affluence. The secret of the lure of the mall lies in its mass appeal - it has
something on offer for everyone in the family.
There is a wide range of shopping experiences - bargains and discounts or high-
end brands for couples, gaming and other amusement facilities for kids, a large
choice of cuisines for family meals, and, of course, the multiplex theatres.
In many ways, malls reflect the state of our society and act as agents of change.
Rising incomes and busier lifestyles are creating the space for malls in the lives
of the urban mass affluent.
The retailing configuration in India is fast developing as shopping malls are
increasingly becoming familiar in large cities. When it comes to development
of retail space specially the malls, the Tier II cities are no longer behind in the
race. If development plans till 2007 is studied it shows the projection of 220
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shopping malls, with 139 malls in metros and the remaining 81 in the Tier II
cities. The government of states like Delhi and National Capital Region (NCR)
are very upbeat about permitting the use of land for commercial development
thus increasing the availability of land for retail space; thus making NCR render
to 50% of the malls in India.
Predicted mall distribution space in India
With such quantum of new format retail space in the pipeline, innovation,
striking the right tenant mix, effective mall management and provision of ample
parking space are components that will decide the future success of mall
developments.
In my Summer Internship Project I got an opportunity to study and analyze the
Mall Mechanism in the Indian sub-continent and in dept study of consumer
perception and Footfall statistics in the Malls.
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The surrounding area covered up in this analysis was Delhi & NCR. The
scrutiny comprises of consumer feedback with respect to the upcoming
Mall Mania and the Organized Retailing format
Introduction to retail in
India
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With organized retail in India pegged at Rs 25,000 crore (Rs 250 billion) -- out
of a total of Rs 800,000 crore and marketing companies are setting up shops
to provide differentiated services to clients. Till now sales people were the link
between the retailer and the producer. But sales personnel are busy selling a
product and do not have a fair idea of what retailing is about. The focus is to
prioritize retail. That is, not only to sell a product to a consumer but to get the
consumer to interact with the product. Gone are the days when retailing
meant mere availability of a product. With competition becoming stiffer
companies are looking at 'experiential' marketing. Also the lack of proper
metrics to measure marketing spends is a serious issue.
In today's swiftly changing business environment, there is no option but to be
in the know - to be constantly on the move, keeping tabs on the shifting trends
in the market place and maneuvering your strategy to stay on top. The retail
arena today is very different - the opportunities are incredible but exploiting
them is extremely tough.
Super smart shoppers know all the rules of the game. They can instantly
sense a good buy and lap it up or sniff out a bad product and dismiss it. Their
expectations are tough to meet but for retailers aiming to make a big sale,
there is not much of a choice but to find ways to win customers over and keep
them permanently happy.
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In an environment, which is still restrictive in many ways and lacks adequate
infrastructure, this becomes a formidable task. So how are Indian retailers coping up
and how long will it be before organized retail becomes the primary way of selling.
This report also surveys the property market and reiterates the significance of IT in
organized retail before presenting a payback analysis to reveal the financial aspects
involved.
India's attempt to go the international way in retailing has met with some success
though not quite as expected. At about 2 per cent of the total retail market, we are
still only scraping the surface. Easy to see why. Only a few large industry houses
have invested in this sector and even fewer have put in any significant sums of
money in a business, which is capital intensive in nature. The fragmented make-up
of the consuming market, complex geographical and cultural structure made more
difficult by poor infrastructural linkages do not allow economies of scale
immediately.
But a tremendous opportunity exists in the Indian market and organized retail will
prevail as in other parts of the world. It is only a matter of time before that happens
and it is probably closer than we imagine. This is the right time to invest and
continue investing in the business. Profits may come in only after five or even seven
years, but that's the way this industry operates and unlike some of the other sectors,
this is not a business where revenues are imaginary and profits illusory. The market
exists, the consumer is out there spending that money somewhere - you just have to
get him into your store.
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In this review the state of business and potential and more importantly, study the
best practices being followed by various retailers in India. I also present in-depth
analysis of practices in the food and apparel sectors supported by case studies and
insights into the financial side of the business.
The size of the industry is estimated at Rs 16,000 crore and is growing at the
rate of about 18-20 per cent per annum. The two areas that have seen action in
organized retail are apparel and food retailing with sales of Rs 5,000 crore and
Rs 1,800 crore, respectively. Segments like consumer durables retailing and
books and music have grown but not as anticipated.
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Executive Summary
Retailing, considered a sunrise industry today after InfoTech, is the most happening
industry with almost all the big players vying for a share of the coveted pie. Buoyed
by a strong increase in private consumption (see graph), retailing is one industry that
is waiting to explode.
Source: KSA Report
Today however, organized retailing is less than 2 per cent of the retailing industry in
India, that is, about Rs 5,000 crore.(see table) Therefore, there is no real retail
revolution in India; the industry is still in the stages of infancy.
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Share of Organized Retail
1999 2002 2006
Total Retail (US $ Bn) 150 180 225
Organized Retail (US $ Bn) 1.1 3.3 7
% Share of Organized Retail 0.70% 1.80% 3.20%
Source: KSA Report
Organized retailing is bound to grow tremendously provided the right marketing
strategies are adopted. Retail businesses have broken rank and seem poised to
surge ahead with renewed vigor, optimism, confidence and capability.
There is an incredible amount of activity in terms of creation of retail-oriented space
across India. As per some estimates, there are over 200 retail mall projects under
construction or under active planning stage spanning over 25 cities. This may
translate into over 25 million sq. ft. of new retail space in the market within next 24
months.
Huge retail formats, with high quality ambience and very courteous and ambivalent
sales staff, are the regular features of retail formats in most Asian countries.
However, in India except for a few big towns where modern retailing formats
abound, these features are grossly missing. I expect organized retailing to slowly
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penetrate the second rung and smaller towns, which will catapult the growth rate for
the sector.
Even though the big retail chains are concentrating on the upper segment and
selling products at higher prices like Crossroads, Akbarally's and Shopper's Stop,
retail stores are sprouting that cater to the needs of middle class. With a huge
middle class population, the retailers like RPG's Food world are tapping this market.
The market is flooded with products branded and unbranded.
The customers are in a dilemma as to pick which one. Simon Bell of AT Kearney
says "There is a close relation between the growth of brands and the growth of the
organized retailing. Companies selling branded products prefer to have big and
organized retail outlets such as supermarkets where they can be differentiated from
unbranded products"
Though doubts have been cast on the future of Indian retailing it is our belief that the
retail boom is yet to happen. While the industry is in the introduction stage in most
geographies, it has just entered the growth region in the metro cities.
Today, the right product mix, right sourcing strategy, and the right communications
are the mantras for success.
This paper begins by analyzing the retail formats in the present Indian scenario and
proceeds to outline the key strategic factors in retailing. In the last part the paper
shows the challenges facing retail and the recommendations for making organized
retailing a success.
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Definition of retailing
Retailing is all the activities involved in selling goods and services directly to final
consumers for their personal, non-business use.
Although most retailing is done in retail stores, in recent years non-store retailing -
selling by mail, telephone (telemarketing), door-to-door contact, vending machines,
and numerous electronic means -- has grown tremendously.
Store retailing: retail stores come in a variety of shapes and sizes, and new retail
types keep emerging. They can be classified by one or more of several
characteristics:
Retailers can be classified by one or more of several characteristics:-
Amount of service
Product line
Relative prices
Control of outlets
Type of store cluster
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Amount of service: different products require different amounts of service, and
customer service preferences vary:
(1) Self-service retailers increased rapidly in the US during the Great Depression in
the 1930's. Customers were willing to perform their own "locate-compare-select"
process to save money. Today, self-service is the basis of all discount operations,
and typically is used by sellers of convenience goods (such as supermarkets) and
nationally branded, fast moving shopping goods (such as catalog showrooms).
(2) Limited service retailers, such as Sears and J C Penney, provide more sales
assistance because they carry more shopping goods about which consumers need
information. Their increased operating costs result in higher prices.
(3) Full service retailers, such as specialty stores and first-class department stores,
have salespeople to assist customers in every phase of the shopping process. Full
service stores usually carry more specialty goods for which customers like to be
waited on. They provide more liberal return policies, various credit plans, free
delivery, home servicing, and extras such as lounges and restaurants.
Product line: retailers can also be classified by the depth and breadth of their
product assortments:
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(1) Specialty stores carry a narrow product line with a deep assortment within that
line. Examples include stores selling sporting goods, books, furniture, electronics,
flowers, or toys. Today, specialty stores are flourishing, due to the increasing use of
market segmentation, market targeting, and product specialization.
(2) A department store carries a wide variety of product lines. Each line is
operated as a separate department managed by specialist buyers and
merchandisers. Department Stores, are large retail stores with a fashion orientation
that sell many types of merchandise organized in separate departments. Found in
virtually every major city in the world, most department stores today are part of
larger retail organizations that operate a flagship (or main) store, as well as branch
stores in shopping centers and malls. The biggest single segment of their business
is apparel and accessories, accounting on average for more than two-thirds of sales.
Most department stores also offer a range of customer services such as personal
shopping assistance, fashion shows, and charge accounts.
The organization of a modern department store is complex because of the large
number of goods and services provided.
Typically, the operation of a store is conducted through four principal divisions:-
(a) The merchandising division, responsible for the planning, buying, and direct
selling of merchandise;
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(b) The publicity division, which handles advertising, display, public relations, and
other sales promotion functions;
(c) The control division, which deals with credit, accounting, and other financial
matters;
(d) And the store management division, which covers personnel, service, store
security, maintenance, and operational duties.
Within these four divisions are many subdivisions. The heads, or managers, of the
four principal divisions report to the general management of the store. Many
variations of this organization plan exist;
(3) Supermarkets are large, low-cost, low-margin, high-volume, self-service stores
that carry a wide variety of food, laundry, and household products. Most US
supermarket stores are owned by large chains such as Safeway, Kroger, Publix,
Winn-Dixie, Jewel, and Tops.Chains account for almost 70% of all supermarket
sales. Supermarkets departmentalized self-service stores that are the predominant
type of retail outlet for food products. An average supermarket handles thousands of
edible items including meat, fresh fruits and vegetables, dairy products, canned
groceries, bakery items, delicatessen, and frozen foods. Some also carry items such
as seafood and liquor. Nonedibles found in supermarkets include household
cleaners, paper products, health and beauty aids, and housewares. The markets are
located in shopping centers, neighborhood areas, business and centers, and along
highways.
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(4) Convenience stores are small stores that carry a limited line of high-turnover
convenience goods. These stores located near residential areas and remain open
long hours, seven days a week. Convenience stores must charge high prices to
make up for higher operating costs and lower sales volume, but they satisfy an
important consumer need.
(5) Superstores, combination stores, and hypermarkets are all larger than the
conventional supermarket. Many leading chains are moving toward superstores
because their wider assortment allows prices to be 5-6% higher than conventional
supermarkets'. Combination stores are combined food and drug stores. Examples
are A&P's Family Marts and Wal-Mart's Supercenters. Hypermarkets combine
discount, supermarket, and warehouse retailing, and operate like a warehouse --
products in wire baskets are stacked high on metal racks, and forklifts move through
aisles during selling hours to restock shelves. They usually give discounts to
customers who carry their own heavy appliances and furniture out of the store.
Relative prices: retailers can also be classified by the prices they charge. Most
retailers charge regular prices and offer normal quality goods and customer service.
Some offer higher quality goods and service at higher prices. Retailers that feature
low prices include:
(1) Discount stores sell standard merchandise at lower prices by accepting lower
margins and selling higher volume. Occasional discounts or specials does not make
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a store a discount store. A true discount store regularly sells its merchandise at
lower prices, offering mostly national brands, not inferior goods.
In recent years, facing intense competition from other discounters and department
stores, many discount retailers have "traded up" by improving their decor, adding
new lines and services, and opening suburban branches. This, of course, has led
to higher costs and prices. With the discounters trading up, off-price retailers have
moved in to fill the low-price, high-volume gap. They obtain a changing and
unstable collection of higher-quality merchandise, often leftover
goods, overruns, and irregulars at reduced prices from manufacturers or other
retailers. The three main types of off-price retailers are factory outlets,
independents, and warehouse clubs.
Control of outlets: about 80% of all retail stores are independents, accounting for
2/3 of retail sales. Other forms of ownership include the corporate chain, the
voluntary chain and retailer cooperative, the franchise organization, and the
merchandising conglomerate.
The chain store is one of the most important retail developments of this century.
Corporate chains appear in all types of retailing, but they are strongest in
department, variety, food, drug, shoe, and women's clothing stores. The size of
corporate chains allows them to buy in large quantities at lower prices, and chains
gain promotional economies because their advertising costs are spread out over
many stores and over a large sales volume. Chain stores, are two or more retail
stores dealing in the same general kind of merchandise and operated by the same
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firm. The outlet is also known as a multiunit and is generally operated by an
employee-manager rather than an individual owner. The manager of a chain store,
unlike the independent retailer, does not make policy decisions and is responsible to
the individual or company that owns the store. Chain stores deal mainly in general
merchandise, food, drugs, and shoes; many variety and discount stores are chains
The great success of corporate chains caused many independents to band together
under contractual associations. The voluntary chain is a wholesaler-sponsored
group of independent retailers that engages in-group buying and common
merchandising. The retailer cooperative is a group of independent retailers that set
up a jointly- owned central wholesale operations and conduct joint merchandising
and promotion efforts.
A franchise is a contractual association between a manufacturer, wholesaler, or
service organization (the franchiser) and independent businesspeople (the
franchisees) who buy the right to own and operate one or more units in the
franchise system. Franchising has been prominent in fast-food companies, motels,
gas stations, video stores, auto rentals, hair cutting salons, real estate, and dozen of
other goods and services. The compensation received by the franchiser may
include an initial fee, a royalty on sales, lease fees for equipment, and a share of the
profits.
Merchandising conglomerates are corporations that combine several different
retailing forms under central ownership and share some distribution and
management functions. Examples include Dayton-Hudson and JCPenney.
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Type of store cluster: Most stores today cluster together to increase their
customer pulling power and to give consumers the convenience of one-stop
shopping:
Central business districts were the main form of retail cluster until the 1950's.
Every large city and town had a central business district with banks, department
stores, specialty stores, and movie theatres. When people began to move to the
suburbs, however, these central business districts (with their traffic, parking, and
crime problems) began to lose business.
A shopping center is a group of retail businesses planned, developed, owned, and
managed as a unit. All shopping centers combined account for about 1/3 of all retail
sales.
Non-Store Retailing: although most goods and services are sold through stores,
non-store retailing has been growing much faster than store retailing.
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Traditional store retailers are facing increasing sales competition from catalogs,
direct mail, telephone, home TV shopping shows, on-line computer shopping
services, home and office parties, and other direct retailing approaches.
Non-store retailing includes direct marketing, direct selling, and automatic
vending:
Direct Marketing vehicles are used to obtain immediate orders directly from
targeted consumers. Although direct marketing initially consisted mostly of direct
mail and mail-order catalogs, it has taken on several additional forms, including
telemarketing, direct radio and TV, and on-line computer shopping. Its growing use
in consumer marketing is largely a response to the "demassification" of mass
markets, which has resulted in an increasing number of fragmented market
segments with highly individualized needs.
Trends that have increased the use of direct marketing include:-
(1) number of women in the workforce;
(2) higher costs of driving, including traffic congestion and parking problems;
(3) shortage of retail help;
(4) longer checkout lines;
(5) toll-free telephone numbers;
(6) availability of credit through proliferation of credit cards;
(7) growth of computer power & communication technology; and
(8) increasing time pressures on consumers
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Direct Selling, or door-to-door retailing, started centuries ago with roving peddlers.
Today, it has grown into a huge industry, with more than 600 companies selling their
products door-to-door, office-to-office, or at home-sales parties. Although some
direct selling companies are thriving, door-to-door selling has a somewhat uncertain
future.
Trends working against this form of selling include:-
(1) increase in single-person and working-couple households decreases the
chances of finding someone at home;
(2) home-party companies are having difficulty finding non-working women
who want to sell product part-time;
(3) increases in crimes against individuals has made consumers reluctant to
invite strangers into their homes; and
(4) recent advances in interactive direct-marketing technology mean that the
door-to-door salesperson may be replaced by the telephone, the television,
and the home computer.
Automatic Vending is not new. In 215 B.C., Egyptians could buy sacrificial water
from coin-operated dispensers. But this method of selling soared after World War II.
There are now about 4.5 million vending machines in the US -- one for every 55
people. Vending machines are found everywhere; compared to store retailing,
vending machines offer consumers greater convenience 24 hours a day, and have
replaced many services formally requiring a human interface. For example, when
was the last time you went to the bank and actually talked with a "live person?”
The expensive equipment and labour required to stock and service vending
machines makes this a costly channel of distribution, and prices of vended goods
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are often 15-20% higher than those in retail stores. So, the adage "there's no free
lunch" still holds -we have to pay for the convenience that vending machines
provide.
The Wheel of Retailing concept states that new types of retailers usually begin as
low-margin, low-price, low-status operations, but later evolve into higher-priced,
higher-service operations, eventually becoming like the conventional retailers they
replaced.
Demographics and Consumer Behavior
Courtesy: KSA Analysis
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India is estimated to have a population of 1.04 billion as of 2003. Population growth
is expected to stabilize at approximately one and a half percent in the next few
years. In recent years, there has been a trend in the movement of population from
rural areas to urban areas, largely as a result of increased employment opportunities
in the cities as well as a preference of the younger generation to move away from
agriculture.
The percentage of population moving to Class I towns, which are basically large
cities with a population of over 1 million, has seen significant growth in recent years.
As a result of this trend, the percentage of population living in urban areas, has seen
dramatic growth in the past two decades. One of the important demographic trends
in recent times is the change in the age profile of the population. The percentage of
the population in the 15 to 59 year age group, which is largely the country’s
workforce, is expected to increase in coming years.
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POPULATION POPULATION- BREAK
UP BY TOWN CLASS URBAN & RURAL
Total Population: 846 million Population: 217million
Census '91. Only one fourth of India's population is urban.
Source Census '91
Top 8 metros constitute more than one fourth of India’s population
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The Global Retail Industry-An Overview
Retail has played a major role world over in increasing productivity across a wide
range of consumer goods and services .The impact can be best seen in countries
like U.S.A., U.K., Mexico, Thailand and more recently China. Economies of countries
like Singapore, Malaysia, Hong Kong, Sri Lanka and Dubai are also heavily assisted
by the retail sector. Retail is the second-largest industry in the United States both in
number of establishments and number of employees. It is also one of the largest
worldwide. The retail industry employs more than 22 million Americans and
generates more than $3 trillion in retail sale annually. Retailing is a U.S. $7 trillion
sector.
Wal-Mart is the world’s largest retailer. Already the world’s largest employer with
over 1million associates, Wal-Mart displaced oil giant Exxon Mobil as the world’s
largest company when it posted $219 billion in sales for fiscal 2001. Wal-Mart has
become the most successful retail brand in the world due its ability to leverage size,
market clout, and efficiency to create market dominance. Wal-Mart heads Fortune
magazine list of top 500 companies in the world. Forbes Annual List of Billionaires
has the largest number (45/497) from the retail business.
GLOBAL RETAIL
34
1999 2002 2006
Total Retail (US$ Billion) 150 180 225
Organised Retail (US$Billion) 1.1 3.3 7
% Share of Organised retail 0.7 1.8 3.2
(Source: CSO, MGI Study)
Top Retailers Worldwide
Rank Retailer Home Country
1 Wal-Mart Stores, Inc. U.S.A.
2 Carrefour Group France
3 The Kroger Co. U.S.A.
4 The Home Depot, Inc. U.S.A.
5 Metro Germany
(Source: STORES / Deloitte Touche Tomahatsu)
Retail Scene in India - Touching Meteoric Height
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As the corporates – the Piramals, the Tatas, the Rahejas, ITC, S.Kumar’s, RPG
Enterprises, and mega retailers- Crosswords, Shopper’s Stop, and Pantaloons race
to develop the retailing sector, retail as an industry in India is coming alive. Retail
sales in India amounted to about Rs.7400 billion in 2002, expanded at an average
annual rate of 7% during 1999-2002. With the upturn in economic growth during
2003, retail sales are also expected to expand at a higher pace of nearly 10%.
Across the country, retail sales in real terms are predicted to rise more rapidly than
consumer expenditure during 2003-08. The forecast growth in real retail sales during
2003- 2008 is 8.3% per year, compared with 7.1% for consumer expenditure.
Modernization of the Indian retail sector will be reflected in rapid growth in sales of
supermarkets, departmental stores and hypermarts.
Sales from these large-format stores are to expand at growth rates ranging from
24% to 49% per year during 2003-2008, according to a latest report by Euro monitor
International, a leading provider of global consumer-market intelligence.
A.T.Kearney Inc. places India 6th on a global retail development index. The country
has the highest per capita outlets in the world - 5.5 outlets per 1000 population.
Around 7% of the population in India is engaged in retailing, as compared to 20% in
the USA.
In a developing country like India, a large chunk of consumer expenditure is on basic
necessities, especially food-related items. Hence, it is not surprising that food,
beverages and tobacco accounted for as much as 71% of retail sales in 2002. The
share of food related items had, however, declined over the review period, down
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from 73% in 1999. This is not unexpected, because with income growth, Indians, like
consumers elsewhere, have started spending more on non-food items compared
with food products. Sales through supermarkets and department stores are small
compared with overall retail sales. Nevertheless, their sales have grown much more
rapidly, at almost a triple rate (about 30% per year during the review period). This
high acceleration in sales through modern retail formats is expected to continue
during the next few years, with the rapid growth in numbers of such outlets due to
consumer demand and business potential.
The factors responsible for the development of the retail sector in India can be
broadly summarized as follows:-
Rising incomes and improvements in infrastructure are enlarging consumer
markets and accelerating the convergence of consumer tastes.
Looking at income classification, the National Council of Applied Economic
Research (NCAER) classified approximately 50% of the Indian population as low
income in 1994-95; this is expected to decline to 17.8% by 2006-07.
Liberalization of the Indian economy which has led to the opening up of the
market for consumer goods has helped the MNC brands like Kellogg’s, Unilever,
Nestle, etc. to make significant inroads into the vast consumer market by offering
a wide range of choices to the Indian consumers.
37
Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic,
etc.
The Internet revolution is making the Indian consumer more accessible to the
growing influences of domestic and foreign retail chains. Reach of satellite T.V.
channels is helping in creating awareness about global products for local markets.
About 47% of India’s population is under the age of 20; and this will increase to 55%
by 2015.
This young population, which is technology-savvy, watch more than 50 TV satellite
channels, and display the highest propensity to spend, will immensely contribute to
the growth of the retail sector in the country. As India continues to get strongly
integrated with the world economy riding the waves of globalization, the retail sector
is bound to take big leaps in the years to come.
The Indian retail sector is estimated to have a market size of about $ 180 billion; but
the organized sector represents only 2% share of this market. Most of the organized
retailing in the country has just started recently, and has been concentrated mainly
in the metro cities. India is the last large Asian economy to liberalize its retail sector.
In Thailand, more than 40% of all consumer goods are sold through the super
markets and departmental stores. A similar phenomenon has swept through all other
Asian countries. Organized retailing in India has a huge scope because of the vast
market and the growing consciousness of the Consumer about product quality and
services.
38
A study conducted by Fitch, expects the organized retail industry to continue to
grow rapidly, especially through increased levels of penetration in larger towns and
metros and also as it begins to spread to smaller cities and B class towns. Fuelling
this growth is the growth in development of the retail-specific properties and malls.
According to the estimates available with Fitch, close to 25mn sq. ft. of retail space
is being developed and will be available for occupation over the next 36-48 months.
Fitch expects organized retail to capture 15%-20% market share by 2010.
A McKinsey report on India says organized retailing would increase the efficiency
and productivity of entire gamut of economic activities, and would help in achieving
higher GDP growth. At 6%, the share of employment of retail in India is low, even
when compared to Brazil (14%), and Poland (12%).
Current Status of Retail Marketing in India
Winds of Change Sweeping Through Retail Industry.
What is it that has made the Piraml’s, the Tata’s, the Raheja’s, ITC and scores of
others take a plunge into mega retailing? Why is market research, space
management, ERP, promotions etc now a necessary tool in this industry?
Retail Economics in India.
39
Traditionally retailing has not been a structurally organized industry in India.
Organized retail network was seen only in fabrics, with large mills building their own
exclusive stores e.g. Raymond’s, Bombay Dyeing etc.
Currently there are about 5130000 retail outlets selling about Rs4790bn worth of
products. Retail universe in India comprises large, medium general stores, chemists
and pan-bidi (apart from accessories stores). Of these –thanks to unemployment,
the number of pan-bidi outlets are steadily rising. On account of the fragmented
nature of Indian retail industry the inhabitants to stores ratio in India is about 150:1,
i.e. there is a store catering to every 150 people. This ratio varies from country to
country. In china the ratio is similar to that of India where as incase of more
developed countries the ratio would be higher. For instance in Europe the inhabitant
to stores ratio is 2000:1.As markets mature, consumer expectations rise it would be
a necessity for small retailers to come together and form innovative and strong
supply chain that will cut through distribution and increase margins.
Turnaround Times
In last couple of years this industry has made responsive move from its hopeful
stages. Organized retailing started picking up in Southern India. Availability of land
at prime locations coupled with cheaper real estate prices (compared to Mumbai &
Delhi) made it possible to have multi stored shopping complexes here. It took two
years of recession to get this concept of shopping to major cities like Mumbai &
Delhi. Recession brought property prices down in these cities. It was during this
period of industry slump that big business houses took notice of the potential in
40
retailing. A classic example being- Lakme Ltd. The company after selling off its
cosmetic division to HLL, made an aggressive foray into retailing. Its retail chain
branded’Westside’ already comprises 4 stores- one each in Bangalore, Hyderabad,
Chennai and Mumbai. A cash hoard of Rs107bn will enable Lakme to roll out stores
aggressively.
Consumerism Cycle
Consumer cycle starts with Industry Dictating the market. Eventually with time the
distributor gains control over the market. At this stage distributor becomes an
important link between manufacturer and customer. When markets start developing
further expanding its horizons, suddenly retailers turn out to be vital point in this
supply chain.
In India we are entering into this third stage where retailers control the market. With
shopping attitudes of people changing, Indian markets today desires for value added
products and services with good ambience and brands, which only a retailer can
provide.
Whereas developed countries have reached the final stage where customer dictates.
US, UK and other developed markets have now reached a stage wherein
consumers are willing to save on price by going to discount stores where ambience
and services are low and goods are unbranded.
41
It’s a vicious cycle, but for the new aspect - Omnipresent net. Though it would be
sometime before e-commerce gears up in India. But all the same a merger of
Internet, catalogues, telephone and television is inevitable.
What Makes it Attractive
Today the number of smaller retailers ($500pa) has shot up from 40% in 1990 to
54% in 1996, whereas the number of large stores (turnover of $3000pa) increased
from 2.8% to 6.5%. Thus though large retailers are growing the smaller outlets are
growing even faster. However changing shopping attitudes of an average customer
will make future growth increasingly difficult for unorganized retail sector.
Currently in India, organized retailing accounts for 6% of the industry turnover,
comprising value-added foods (Rs770bn), music & entertainment (Rs40bn), colour
cosmetics (Rs12bn) etc. By 2005 organized retailing will account for 20% the total
retailing industry turnover (Rs8300bn).
Big business houses today are in a position to provide Indian masses with shopping
satisfaction, entertainment, quality product, polite salesperson, product information
and discounts. Though margins currently are low due to high property cost and poor
infrastructure. This is the only business where one buys in credit and sells for cash.
Further the number of households earning more than Rs150000 per annum amounts
to 30mn today and is expected to grow to 80mn by 2007.Additionally financial
institutions are encouraging such ventures. ICICI has recently sanctioned term loans
to Vivek & co, a mega-retailer, in Chennai to meet their expansion plans. Very
shortly the market will also witness IPO’s for some of these Retail Ventures.
42
Proven success
In early 90’s, K. Raheja Group started a mega Apparels stores in Mumbai-
‘Shoppers Stop’. Initially, the group was averse to start outlets at South Mumbai
for various reasons like low walk-ins, space constraints, narrowed target audience
etc. However the success of Crossroads, an ardent rival, has prompted them to start
one at South Mumbai in near future. The group has more of such stores, one each
at Bangalore, Hyderabad and Jaipur. Within seven years of operations it has a
yearly turnover of Rs1.30bn. The group has plans of opening about 20 mega apparel
stores in next 2 years. For this the company plans to sell 25.1% stake for Rs559mn
to Singapore based investor Warburg Pincus. The success story of Shoppers Stop
has convinced other business houses to take a leap.
Origin of Modern Retailing in India
Retailing, which is one of the largest sectors in the global economy, is going through
a transition phase in India. However the Indian retail sector is still in a nascent stage.
Organized retailing still contributes to only about 2% of the total retailing in the
country. Now a question that would arise is what constitutes Organized Retailing.
Mr. Raghu Pillai, the Managing Director of Food World, which is one of the leading
organized food retailing chain in India says that, “Organized Retailing presupposes a
retailers’ ability to manage or more importantly influence a set of supply chain
variables in a commercially viable and sustainable way”. Efficient management of
the supply chain to ensure the profitability of the entire chain, large outlets with
modern ambiance and facilities, a wide product profile, self service facilities etc are
43
generally the features of a modern retail store. Organized retailing aims at providing
an ideal shopping experience for the consumer based on the advantages of large-
scale purchases, consumer preference analysis, excellent ambience and choice of
merchandise. However, there are no single formats, designs, facilities or product
portfolios that can be identified as the success formula and as a general rule
differentiation between chains is necessary to increase viability. For a long time, the
corner grocery store was the only choice available to the consumer, especially in the
urban areas. This is slowly giving way to international formats of retailing. The
traditional food and grocery segment has seen the emergence of supermarkets/
grocery chains. The Indian food retail market is still in stage-1, which represents the
‘First Steps’ in the Stages of Maturity of Modern Retail Food Market.
The stages of this progression and the position of the other major countries are
given below:
Source: KSA Report
Stages of Maturity of Modern Food Retail Markets
44
Largely in the post independence period, Indian retailing has been unorganised, to
the most part untouched by corporate business principles. When the economy
started to be opened in the 1980s the situation began to change slowly. Emergence
of retail chains was at first witnessed in the textiles sector, with companies like
Bombay Dyeing, Raymond, S. Kumar‘s and Grasim, opening their own outlets. Titan
then successfully created a retailing concept, by establishing its series of elegant
showrooms. The later half of the nineties has been a witness to a fresh wave of
entrants in the retailing business. The new chains have not been restricted to textiles
and garment sellers but there have been entrants from various fields of commerce.
FoodWorld and Subhiksha in food and Fast-Moving Consumer Goods; Musicworld
and Musiccafe in music; Viveks and Vijay sales in the consumer durables etc were
the beginners.
Now the number of players and the variety of formats and product categories reflect
variety.
45
Different Forms of Retailing
Popular Formats
Hyper marts
Large supermarkets, typically (3,500 - 5,000 sq. ft)
Mini supermarkets, typically (1,000 - 2,000 sq. ft)
Convenience store, typically (7,50 - 1,000 sq. ft)
Discount/shopping list grocer
Traditional retailers trying to reinvent by introducing self-service formats as well
as
Value-added services such as credit free home delivery etc.
The Indian retail sector can be broadly classified into:-
a) FOOD RETAILERS
There are large number and variety of retailers in the food-retailing sector.
Traditional types of retailers, who operate small single-outlet businesses mainly
using family labour, dominate this sector .In comparison, super markets account for
a small proportion of food sales in India. However the growth rate of super market
sales has being significant in recent years because greater numbers of higher
income Indians prefer to shop at super markets due to higher standards of hygiene
and attractive ambience.
46
b) HEALTH & BEAUTY PRODUCTS
With growth in income levels, Indians have started spending more on health and
beauty products. Here also small, single-outlet retailers dominate the market.
However in recent years, a few retail chains specializing in these products have
come into the market. Although these retail chains account for only a small share of
the total market, their business is expected to grow significantly in the future due to
the growing quality consciousness of buyers for these products.
c) CLOTHING & FOOTWEAR
Numerous clothing and footwear shops in shopping centers and markets operate all
over India. Traditional outlets stock a limited range of cheap and popular items; in
contrast, modern clothing and footwear stores have modern products and attractive
displays to lure customers. However, with rapid urbanization, and changing patterns
of consumer tastes and preferences, it is unlikely that the traditional outlets will
survive the test of time.
.
d) HOME FURNITURE & HOUSEHOLD GOODS
Small retailers again dominate this sector. Despite the large size of this market, very
few large and modern retailers have established specialized stores for these
products. However there is considerable potential for the entry or expansion of
specialized retail chains in the country.
e) DURABLE GOODS
47
The Indian durable goods sector has seen the entry of a large number of foreign
companies during the post liberalization period. A greater variety of consumer
electronic items and household appliances became available to the Indian customer.
Intense competition among companies to sell their brands provided a strong impetus
to the growth for retailers doing business in this sector.
f) LEISURE & PERSONAL GOODS
Increasing household incomes due to better economic opportunities have
encouraged consumer expenditure on leisure and personal goods in the country.
There are specialized retailers for each category of products (books, music products,
etc.) in this sector. Another prominent feature of this sector is popularity of
franchising agreements between established manufacturers and retailers.
Each of the retail stars has identified and settled into a feasible and sustainable
business model of its own.:-
Shoppers' Stop - department store format
Westside - emulated the Marks & Spencer model of 100 per cent private label,
very
good value for money merchandise for the entire family
Giant and Big Bazaar - hypermarket/cash & carry store
Food World and Nilgiris – supermarket format
Pantaloons and The Home Store - speciality retailing
48
Tanishq has very successfully pioneered a very high quality organized retail
business in fine jewellery
Structure of the retailing industry according to ownership patterns:-
An unaffiliated or independent retailer
A chain retailer or corporate retail chain
A franchise system
A Leased Department (LD)
Vertical Marketing System (VMS)
Consumer Co-operatives
49
A new entrant in the retail environment is the 'discounter' format. It is also is known
as cashand- carry or hypermarket. These formats usually work on bulk buying and
bulk selling.
Shopping experience in terms of ambience or the service is not the mainstay here.
RPG group has set up the first 'discounter' in Hyderabad called the Giant. Now
Pantaloon is following suit.
Two categories of customers visit these retail outlets.
1. The small retailer. For example, a customer of Giant could be a dhabawala who
needs to buy edible oil in bulk.
2. The regular consumer who spends on big volumes (large pack sizes) because
of a price advantage per unit.
50
MALL REVOLUTIONIN INDIA
MALL REVOLUTION IN INDIA
Over the last 3-5 years, the Indian consumer market has seen a significant
growth in the number of modern-day shopping centers, popularly known as
‘malls’. A Mall is a mercantile establishment consisting of a carefully
landscaped complex of shops representing leading merchandisers; a modern
version of the traditional marketplace. There is an increased demand for quality
retail space from a varied segment of large-format retailers and brands, which
include food and apparel chains, consumer durables and multiplex operators.
51
Shopping-centre development has attracted real-estate developers and corporate
houses across cities in India. As a result, from just 3 malls in 2000, India has
over 220 malls by 2006. Today, the expected demand for quality retail space in
2008 is estimated to be around 40 million square feet.
While previously it was the large, organized retailers – with their modern, up-
market outlets, and direct consumer interface- who had been a key factor
driving the growth of organized retail in the country, now it is the malls which
are playing the role.
Factors such as availability of physical space, population densities, city
planning and socio-economic parameters have driven the Indian market to
evolve, to a certain extent, its own definition of a ‘mall’.
For example, while a mall in USA is 400,000 to 1 million sq.ft. in size, an
Indian version can be anywhere between 80,000 sq.ft. and 500,000 sq.ft.
52
By 2008, total mall space in the 6 cities of Mumbai, Bangalore, Hyderabad,
Chennai, Kolkata, and National Capital Region (Delhi, Noida, Gurgaon) is
expected to increase to over 21.1 million sq. ft. Compared to other big cities,
Kolkata and Hyderabad are relatively new entrants in the mall segment, but are
witnessing quick growth. Smaller cities like Pune, Ahmedabad, Lucknow,
Ludhiana, Jaipur, Chandigarh and Indore are also expected to see a formidable
growth in the growth of malls in the near future.
But malls in India need to have a clear positioning through the development of
differential product assortment and differential pricing, in order to compete
effectively in a growing mall market. Segmentation in malls, like up-market
malls, mid-market malls, etc., proper planning, correct identification of needs,
quality products at lower prices, the right store mix, and the right timing, would
ensure the success of the ‘mall revolution’ in India.
53
PRAGMATIC SCENARIO IN
MALL MECHANISM
Mall developers have traditionally been real estate businessmen looking to
diversify. Most have not really bothered with the daily operations of the mall
once the tenants are in.
But now, they are realizing the need to actively do so even as they understand
how low footfalls could lead to an exodus of tenants. For that, they need to put
a premium on quick, efficient and satisfactory service, both to consumers and to
the retailers.
Quite a lot of Mall Developers are already moving in that direction. They have
installed footfall counters to map the entire mall and study exactly where
customers head to and how much time they spend in different areas of the mall.
With this kind of competition, sustenance for malls will only happen if they
continue to draw in the crowds.
54
The parameters for developing a Mall are:
1. Studying the customers demographics and lifestyles and cities where retail
formats can be opened and succeed.
2. Infrastructure and facilities that can support the property for the next
10 years plus.
3. Potential which can lead to a payback in less than five years.
For the developers, the critical lesson is to invest some quality effort in
understanding the shopping-needs of customers in their targeted "catchment"
areas and then build a carefully planned portfolio of retail options that can meet
the needs of these targeted customers.
And this task is not easy. But if one attracts the numbers, he will thrive in the
compounded growth that the industry expects to see over the next 10 years.
55
ESSENTIALITY OF MALL
DESIGN ELEMENT
The mall phenomenon has transformed the way people shop and be entertained.
As single-point destinations for food, shopping and entertainment, malls have
revolutionized retailing, and have significantly increased consumer spending.
56
Expertise in the conceptualization, design, development, and management of
malls is necessary to optimize long-term sustainability and profitability.
Although some developers have become rapidly skilled in developing
successful malls, for the greater part there is still a lack of expertise and
experience which is required to develop sustainability.
Most mall owners and developers are not familiar with the multitude of factors
that govern the success or failure of shopping complexes. They are not aware of
the crucial fact that it is the heightened quality of art that mall designers, as
competent artists, can offer, and which no one in related fields - not space
planners, nor realtors, nor developers, nor construction cost analysts, nor
facility managers - can lay claim to.
57
These people perform useful functions, of course, but innovative mall designers
can bring something exciting and original to the projects.
CONSUMER’S PERCEPTION OF
A MALL
Exactly what is it that inspires a consumer to shop at a particular shopping
mall?
The answer lies in the amalgamation of various factors like the distance of the
mall from your home, the ambience, the interior designing, the anchor tenants,
brands, comfort level, kind of set up, location of the mall, display, sales, the
experience of visiting a mall, food and entertainment, the treatment you get and
the overall package which affects the shopping behavior of the consumer.
A mall must be a refuge from the humdrum of everyday life, an alternative
world where everything new and desirable is available. On the outside, a mall's
architecture must be enticingly futuristic to broadcast excitement and ultimate
58
shopping ease. On the inside, it must live up to the expectations that the exterior
has bred.
Ease of transit across various levels, informed shop location based on
established buying habits and patterns and easy access to all shops on each level
are the primary considerations. Customer loyalty comes from the overall
excitement that the shopping experience offers.
The needs of two kinds of customers are required to be addressed i.e., the tenant
and the end consumer. For the tenants factors like, floor, built up area, energy
efficiency, security, movement of goods, effective and timely garbage removal
system and safety should be taken care of.
The endusers/consumers, the factors like safety, easy customer circulation, wide
passageways to shop around with trolleys, ample parking space, easy access
from shopping areas with trolleys to the vehicle parking area, adequate rest
rooms, place for the tired to sit and relax and phone facilities should be
provided.
59
FOOTFALL
MATHEMATICS
&
STATISTICS
60
FOOTFALL: MATHEMATICS AND STATISTICS
We keep hearing about the retail boom. But, then, who creates
this boom?
Is it real estate prices, elegant showroom displays, branded
products, state-of-the-art technology…?
Who is behind the great retail turnaround that we witness
today?
The answer is customers and more customers. Retail business, like any other
business, starts with the customer and grows only because of them. Loyal
customers and new customers make a retail outlet, be it a shop, store,
supermarket or mall, a great success.
61
With increase in competition, the need of retail businesses is sales and not just
footfalls, in other words, footfalls conversions. Retailers are analyzing whether
it is possible to survive within the figures that constitute conversions. It is
evident that the footfalls in a mall have a direct bearing on the success of the
outlets or the mall.
Today, the visitor wants much more from a mall. In addition to a great shopping
experience, the new-age visitor seeks an equally great visiting experience that
involves food courts and multiplexes. At the same time, there are customers
who come just for recreation and entertainment without the intention of
shopping.
This can be a great opportunity for the mall to convert probable customers into
actual customers. The challenge is to make mall visitors visit shopping joints,
the small stores and the anchor shops, to translate the big crowd outside a shop,
to the few customers inside the shop.
For this, a new equation in footfalls mathematics has evolved:
There are visitors who enter the mall and head for purchase, thereby becoming
customers, called 'C';
There are visitors who visit simply for recreation and entertainment and don't
make any purchase. Known as shoppers, called 'S',
62
These two types make up the C/S ratio. It can be solved using a marketing
strategy. We very well know that footfalls economics plays a vital role in
calculating C/S Ratio.
Now the question arises how to improve the C/S ratio? What is it that obstructs
the C/S ratio from attaining the value of 1?
The C/S ratio will equal 1 only when all the visitors to a mall convert into
buyers. Which strategies must be implemented that would increase the 'C'
factor?
FOOTFALL STATISTICS
To evolve strategies for more conversions, find the average number of
customers per day, further divided into per working day, during weekends,
average spending per customer, average purchase made, comparative study of
purchase of food items and non-food items, durables and non-durables, top of
the line brands and general purpose products i.e., collect customer data using
different direct and indirect systems, such as developing customer profile,
analyzing the buying pattern, developing forecasting models (derived out of
information leading to knowledge which helps to forecast the sales in a similar
situation in real time, in real life) and the marketing strategy for CRM and other
applications.
63
Retail business marketing strategy, based on market trends and forces leading to
footfalls, are aimed at achieving the best from footfalls logic, mathematics and
data. If we have the relevant data and statistics on our customer, we get to know
him better. Once we get to know customer dynamics, we can position our
product accordingly and achieve maximum return. But it's not so simple to
know our customer in detail in a short period of time. It is an ongoing effort to
get more data both at the micro and macro levels, for every transaction. This
insight-gathering exercise helps generate the best results, including profits.
64
PROFILING OF
INDIAN CITIES
PROFILING OF INDIAN CITIES
65
Now, I am hereby presenting a brief overview of Mall Mechanism in the major
cities all across India. This will discuss the demographic profiling of the city
and provide the present strata of the city vis-à-vis its Real Estate scenario and
its Retail scenario. This overview comprises of all those cities where mall
Revolution is on the progress or on the finishing process.
66
CITY DEMOGRAPHIC
PROFILE
LOCAL ECONOMY RETAIL BRANDS FUTURE
OUTLOOK
Name Population Literacy
Rate
Major Industries Anchor
Stores
Apparel
Stores
Multiplex Food &
Beverage
Gurgaon 10,00,000 63% Maruti Udyog Ltd., Hero
Honda, IBM, Honda
Motors, Sona Koyo,
Steering Systems Limited
Westside,
Pantaloon,
Pyramid
Megastore,
Shoppers
Stop
Raymonds,
United
Colors of
Benetton,
Marks &
Spencer,
Tommy
Hilfiger,
Rockport
PVR, DT
Cinemas
McDonalds,
Pizza Hut,
Ruby
Tuesday,
Barista,
CCD.
New Retail
Venture:
(Specialty
Malls)
coming up
in the city
Delhi 13,782,9
76
81.82
%
Shoppers
Stop,
Pantaloon,
Nike,
Reebok,
Adidas,
INOX,
IMAXE,
Adlabs,
McDonald's,
Café Coffee
Day,
Retail Mall
developme
nt around
67
Wills
Lifestyle,
Big Bazaar,
Giant, Food
Bazaar,
Westside,
Spencer,
Vishal
Mega Mart
Lacoste,
Allen Solly,
Zodiac,
Arrow,
Planet
Fashion,
Louis
Phillipe,
Raymonds
PVR, Fun
Cinema,
Subway,
Barista,
Pizza Hut,
US Pizza,
Yo-China,
Café
Mocha,
Dominos,
Pizza Hut
the Capital
City. Major
projects at
the city's
southern
part.
Chennai 4,352,93
2
80.14% Ford, Hyundai,
Hindustan Motors, TVS,
Ashok, Leyland, MRF .
Shoppers
Stop,
Lifestyle,
Westside,
Pantaloon,
Landmark,
Globus
Wills
Lifestyle,
Cotton
World,
Levis,
Crocodile,
Fab India,
PVR, IMAX
Cinemas
Food
World,
Pizza Hut,
Barista,
Qwikys,
Café Coffee
Day,
IT and
ITES sector
has
attracted
most of the
commercial
real estate
68
Nalli Silks Copper
Chimney.
activities in
the city
Coimbatore 1,695,08
5
79% Cognizant Technology
Services, Spheri Textile
and Motor Pumps
industries
Colorplus,
Crocodile,
Jockey, Van
Heusen,
Nalli Silk,
Louis
Phillipe,
Allen Solly,
Arrow.
PVR,
INOXE, DT
Cinema
Café Coffee
Day, Pizza
Hut,
Dominos
Pizza,
Annapoorna
Mall
Culture is
in the
upward
shift in this
city.
Madurai 905,649. 79% Madura Coats
(manufacturing industrial
textile, cotton and
blended yarn).
Satya Paul,
Crocodile,
Arrow, Lee,
Wrangler,
The new
growth
corridors of
the city is
on Melur
69
Reid &
Taylor,
Color Plus,
Lee.
Highway.
Kozhikode 953,195 82.23
%
Saw Mills, Textile Mills,
Boat Building, Timber
Industry / institutions in
the city.
Arrow, Van
Heusen,
Allen Solly,
Raymond,
Peter
England,
Pan
America
S.M. Street
Heritage
Project ,
Holistic
Health
Village on
270 acres
of land.
Cochin 606,223 90.9% Apollo Tyres, Kochi
Refineries Ltd, Cochin,
Shipyards, Kirloskar
Copeland Ltd, HPCL,
Wills,
Lifestyle,
Indigo
Nation,
Trigger,
John
Café Coffee
Day, Pizza
Hut
Kochi's
suburbs like
NH 47 by-
pass,
70
IOCL, Indian Navy Players,
Lee,
Century
Cottons,
Weekenders
Airport
Road
witnessing
developme
nt.
Trivandrum 793,841 82.66
%
Infosys, TCS, Ernst and
Young, McKinsey and
Co., Keltron, Travancore
Titanium, Kinfra Apparel
Park
Raymond,
Allen Solly,
Peter
England,
Arrow,
Digjam,
Louis
Philippe
Food world Techno
Park Phase
1, 2, and 3
expansion
and Special
Economic
Zone.
Banglore 6,158,67
7
77% IIM-B, IISC,
Hindustan
Aeronautics, Infosys,
Westside,
Lifestyle,
Shoppers
Zodiac,
Scullers,
Provogue,
INOX, PVR Pizza Hut,
Subway,
Foodworld,
commercial
market
(IT),
71
Wipro, Biocon Stop United
Colors of
Benetton,
Allen Solly,
Mango,
Tommy
Hilfiger.
Barista,
Café Coffee
Day, KFC.
Software
Parks and
high end
residential
developme
nts.
Hubli 853,730 78% BVB Engineering
College, Hubli-
Dharavad Urban
Development
Authority
Food
World
Raymonds,
Indigo
Nation, Lee,
Van
Heusen,
Trigger.
Pizza Hut,
Pizza
Corner,
Baskin
Robins
Airport
Road is fast
emerging as
an active
real estate
location.
Mangalore 9,00,000 85% Mangalore Refinery
and Petrochemicals
Ltd., Mangalore
Wills
Lifestyle
Reebok,
Van
Heusen,
Café Coffee
Day,
The city is
growing in
all
72
Fertilizers Ltd,
Headquarters of
Canara Bank,
Syndicate Bank and
Corporation Bank.
Louis
Phillipe,
Allen Solly,
Peter
England,
Blackberrys,
Jockey,
Raymonds
Dominos directions,
especially
along the
major
transport
corridors
(NH17)
Mysore 902,986 79% Infosys, Wipro,
Mysore Polymers &
Rubber Products Ltd.,
Ideal Jawa (India)
Ltd, Kirloskar
Electric Co. Ltd
Raymond,
Planet
Fashion,
Multibrand
outlets
Food world,
Nilgiris
Upcoming
Mall
projects in
Lalitha
Mahal
Road, KRS
Road and in
vicinity of
73
the Ring
Road.
Mumbai 12,883,6
45
76.87
%
Godrej, ONGC,
Bombay Dyeing,
Castrol, Cipla, Glaxo,
HLL, Tata, TELCO,
Reliance.
Big Bazaar,
Pantaloon,
Lifestyle,
Pyramid,
Globus,
Westside,
Shopper's
Stop
Century
Cottons,
Marks &
Spencer,
Mango,
Provogue,
Pepe,
Dockers,
Reid &
Taylor,
INOX,
CineMax,
Adlabs,
Movie Time,
Fame
Café Coffee
Day, Pizza
Hut,
McDonald's,
Domino's
Pizza,
Barista,
Subway,
Tendulkar's,
Kobe
Sizzler
A supply of
around 7.2
million
sq.ft. of
retail space
(37 malls)
is estimated
by the end
of 2007.
Pune 3,043,12
8
76% TELCO, Kinetic,
Bajaj Auto, Finolex,
Thermax, Hindustan
Shopper's
Stop,
Westside,
Wills
Lifestyle,
Adidas,
INOX, E-
Square, City
Pizza Hut,
Café Coffee
Day,
The total
mall space
in Pune
74
Antibiotics, Kirloskar
Pneumatics,
Cummins
Food
World,
Pantaloons
Levis , Lee,
Dockers
Pride Barista,
Burger
King,
McDonald's
and Subway
would be
more than 5
million
sq.ft. in the
next 12 to
18 months.
Ahmedabad 5,080,56
6
79.50
%
Arvind Mills,
Ashima, Torrent
Pharma, Zydus
Cadilla, Nirma&
IIM-A.
Pantaloons,
Westside,
Wills
Lifestyle,
V-Mart,
Radhika,
Planet
Fashion,
Jade Blue,
Pyramid,
: Indigo
Nation,
Trigger,
John
Players,
Color Plus,
Lee, Arrow,
K Lounge,
Allen Solly,
City Pulse,
City Gold –
Ashram
Road, City
Gold -
Bapunagar,
Fun
Republic, R
World, Wide
McDonald's,
Café Coffee
Day,
Subway,
Barista,
Pizza Hut,
US Pizza,
Bombay
Blue, New
Yorkers,
Retail Mall
developme
nt around
the old city.
Major
residential
projects at
the city's
western
75
Crossword,
Big Bazaar,
Star India
Bazaar
Seasons Angle Copper
Chimney,
Café
Mocha, Tea
Centre,
Dominos
part.
76
Vadodara 1,435,71
6
86.08
%
L&T, Alstrom Power
India Ltd, FAG India,
Bombardier
Transportation India
Ltd.
Pantaloons,
Wills
Lifestyle,
V-Mart
Indigo
Nation,
Trigger,
John
Players,
Color Plus,
Lee, Arrow,
K Lounge,
Allen Solly,
Seasons
INOX McDonald's,
Café Coffee
Day,
Subway,
Barista,
Pizza –Hut
Retail
developme
nt taking
place on R
C Dutt
Road, Old
Padra Road
and Race
Course
Road
Indore 1,901,27
1
64.21
%
Kinetic Honda, Bajaj
Tempo, Hindustan
Motors, L & T,
Bridgestone,
Crompton Greaves
Pantaloons,
Wills
Lifestyle,
V-Mart
John
Players,
Color Plus,
Lee, Arrow,
K Lounge,
Allen Solly
Velocity McDonald's,
Café Coffee
Day, Pizza
Hut
Retail
developme
nt at
Rajwada
Chowk and
now
77
moving
towards
Bombay
Hospital
area.
Raipur 699,683 81.09
%
L&T, Tata Iron &
Steel, Century
Cement, Cement
Corporation of India,
Gwalior Rayon
Killer,
Color plus,
Reebok,
Peter
England,
Raymond
(Parx)
Café Coffee
Day
G.E. Road
is the most
important
corridor for
retail real
estate
developme
nt.
Bhubaneshw
ar
794,039 67% Infosys, TCS and
Satyam
My Dollar
Store, Wills
Lifestyle,
: Raymond,
Indigo
Nation and
Chandrashe
kharpur in
the vicinity
78
Big Bazaar Century
Cottons
of the
IT/ITES
Park - one
of the main
retail
developme
nt areas.
Jaipur 2,817,52
2
68% GE, IT Park (Sitapura
Industrial area)
Shoppers'
Stop, Wills
Lifestyle
Provogue,
Raymond,
Koutons,
Pepe Jeans
Vaibhav
Multiplex,
Time Square
McDonald's,
Barista,
Café Coffee
Day and
Pizza Hut
Jaipur is
slated to
witness
large-scale
organized
retail
activity.
Hyderabad 3,632,09
4
87% Infosys, Microsoft,
Oracle, Wipro,
Pantaloons,
Shopper's
Bombay
Dyeing,
Imax, Adlabs Café Coffee
Day,
Hyderabad
will have
79
Kanbay, GE, Value
Labs, Dell, Deloitte,
HSBC, Intergraph,
IBM, Keane, Baan,
InMage, Tata
Consultancy
Services, Amazon
Stop Reid &
Taylor,
Raymond,
Tommy
Hilfiger,
Wills
Lifestyle
Barista,
Pizza Hut
about 15
malls in the
next 18 to
24 months.
Lucknow 2,541,10
1
68.63
%
IIM - L, Central
Drug Research
Institute, King
George's Medical,
University.
Big Bazaar,
Vishal
Mega Mart
Khadder,
Allen Solly,
Raymonds,
ITC Wills
Sports,
Live-In
A B Motion
Movies,
WAVES
Moives.
McDonald's,
Barista,
Café Coffee
Day
4 malls are
proposed.
3 of which
would be in
Gomti
Nagar.
Kharagpur 222,479 74% Tata Davy Ltd, Tata
Bearings Ltd. and
Tata Metaliks Ltd.
Big Bazaar,
V-mart.
Raymonds,
Mafatlal,
Arrow,
Fun Cinemas Café Coffee
Day,
Barista,
New Puja
Mall at
Shalua
80
Pepe, Lee-
Cooper.
Pizza Hut which is
proposed to
have a
retail space
of 500,000
sq.ft
Kolkata 14,681,5
89
74% ITC Ltd, Mahindra,
Jessop RPG Group
McLeod Russels
India Ltd., Tata
Consultancy
Services, IBM, IBP
Co. Ltd
Shoppers
Stop,
Pantaloon,
Wills
Lifestyle,
Big Bazaar,
Giant, Food
Bazaar,
Westside,
Spencer
Nike,
Reebok,
Adidas,
Lacoste,
Allen Solly,
Zodiac,
Arrow,
Planet
Fashion,
Louis
INOX,
Shringar,
IMAX, Fame
McDonald's,
Café Coffee
Day,
Barista,
Pizza Hut.
Kolkata
will have
around 24
malls by
the end of
2008, with
5.5 million
sq. ft. of
retail space
81
Phillipe,
Raymonds.
to the city.
Siliguri 527,223 69.22
%
: Administration,
Services, Industry
Vishal
Mega Mart
Lee, Arrow,
Excalibur,
Newport,
Raymond
Movie
World
Siliguri
Space
Retail
developme
nt in 2-3
yrs.
Ranchi 970,602 42% Heavy Engineering
Corporation, Mecon,
SAIL's, Usha Martin
[Usha Beltron] and
Shipping Corporation of
India
Peter
England,
Hoffman
PVR, Fun
Cinemas
Café Coffee
Day,
Subway
Upward
trend in the
Realty
Business in
the next 3-5
years
Noida 9,67,780 62% HCL, Silicon R.F.
Technology, Perot
Systems, HONDA,
Samsung, L.G.,
Hot Bread,
Shoppers
Stop,
Pantaloon,
Allen Solly,
Zodiac,
Arrow,
Louis
IMAXE, Fun
Cinema,
Adlabs,
PVR,
Barista,
Pizza Hut,
Peter Pizza,
Café
Retail
expansion
due to the
urban
82
Moser bear. Wills
Lifestyle,
Big Bazaar,
Westside,
RPG
Retail,
Vishal
Mega Mart
Phillipe,
Raymonds,
Excalibur,
Newport,
Live-in,
Pepe.
INOX.,
Spice World.
Mocha,
Dominos,
Pizza Hut,
McDonald's,
Café Coffee
Day,
Subway.
developme
nt and the
Real Estate
developers
high
investment
in NCR.
83
RESEARCH METHODOLOGY
for studying the mall
revolution
in india
84
RESEARCH
METHODOLOGY
for studying the
mall revolution
in india
85
RESEARCH METHODOLOGY
American marketing association has defined market research as:
The systematic gathering, recording and analyzing of data about
problems relating to the marketing of goods and services. The key
word that distinguishes research from a haphazard gathering of
observations is systematic.
All research can be categorized in basic and applied research.
Basic: Is that intended to expand the body of knowledge in a field
or to provide knowledge for the use of others?
Applied: This is carried out for the solving of a particular problem
or for guiding a specific decision, and usually its results are private.
Research also includes identifying opportunities. Opportunities are
situations with positive potentials that, if recognized and capitalized on
are profitable to the organization. They are subtle to identify and
challenging to solve.
86
The nature of research design: The noun design has various
meanings, but the one suitable for our subject is a pattern or an
outline of a research project’s workings. It is a statement of only
the essential elements of a study, those that provide the basic
guidelines for the details of the project. It comprises a series of
prior decisions that, taken together, provide a master plan for
executing a research project. A master plan is comprehensive and
gives a general statement of the method to be used, in contrast to
the details that should be written to be sure of the specific work to
be done.
During the course of the project the first step was formulating a
series of hypotheses :
Does the presence of facilities like multiplexes and food courts
effect the foot fall and conversion?
The type and location of the occupiers effect the foot fall on the
conversion.
Should the malls have convenience stores / department stores?
The presence of anchor stores affects the footfall and the
conversion.
Can malls with a total covered space of more than 1, 00,000 sq feet
be feasible?
87
Location of mall effects the foot fall and the conversion.
There should be restriction on entry in malls based on some
criterion.
Sample Design:
The study is conducted upon the Sample survey is conducted in Delhi and
National Capital Region with the help of Simple random sampling
method.
Sample Size: 100 people
Data Collection Sources:
Primary Source-
Sample Questionnaires
Personal Interviews of Mall Managers
Interaction with Mall Designers, Space planners
Communication with Facility Managers at Shopping Arcades.
88
SECONDRY SOURCE-
Newspapers
Magazines
Trade Journals
White Papers
Web Portals
Tools of Analysis:
Pie charts
Graphical representation
Tabulated Data
89
Future of Indian Retailing
The unorganized retail market at present is Rs. 583,000 crores. The
Organized market: Rs.5,000 crores. Growth in organized retail will
likely to touch Rs. 35,000 crores (US$ 7 Billion) or more by 2010. From
2006 to 2010; the Mall Culture is expected to grow at the 49.53% per
annum. Hypermarket is emerging as the most favorable format for the
time being in India and over 5,000,000 sq. ft. of mall space under
development. The top 3 modern retailers control over 750,000 sq. ft. of
retail space. Over 400,000 shoppers walk through their doors every
week
90
Analysis and data
interpretation
91
Analysis and data interpretation
After the attainment of these data, a profound analysis with regards
to the Mall Mechanism is the result of this report which leads to the
completion of the project.
92
Analysis of Data Collected through Sample
Questionnaires
Purchase Preference Status
ELUCIDATION:
Data elucidation study shows that maximum people prefer both Local
markets as well as Malls for purchasing their apparels and accessories
scenario.
Anchor Store Status
ELUCIDATION:
93
Data elucidation study shows that majority anchor store customers of a
mall prefer Multi Utility Stores like Big Bazaar, Spencer and then comes
apparel marts like Vishal Mega mart and Shopper’s Stop.
Mall Preference Status:
ELUCIDATION:
Data elucidation study interprets the prime reason behind people visiting
Malls for purchasing is because inside a mall everything is available
under one roof, and efficient customer service is also a very important
aspect. Some people also prefer shopping at because of the huge variety.
94
Local market preference:
ELUCIDATION:
It was observed and analyzed by the elucidation study that public is
inclined towards local markets due to Cost effective merchandise,
bargaining power of the customer and easy accessibility.
95
Mall visit status:
ELUCIDATION:
Maximum footfalls in the Malls are in the weekend i.e. Saturday and
Sundays mostly to watch a movie and enjoy good food. Apart from it
there is also a section from the society that visit mall for purchasing their
monthly grocery and daily need items from stores like Spencers,
FoodMart etc.
Study shows a very nominal amount of people visit occasionally to the
malls for entertainment, shopping spree etc. and there also exist a small
sub section of the young crowd those who visit malls almost daily.
96
Mall Section Status:
ELUCIDATION:
The elucidation study analyses that maximum footfalls of people is in the
Multiplexes and anchor stores like Big Bazaar, Spencer’s, Shopper’s Stop
etc. Second most priority is of the delicious delicacies i.e. the food courts,
restaurants, coffee shops etc. The minimum footfalls are counted on
Brand Retail Stores.
97
Mall Visiting Reason Status:
ELUCIDATION:
The elucidation study observed that one shop destination, huge variety
and sprawling retail stores entice more and more consumers to visit the
Malls and today plastic money accessibility also provides them strong
purchasing power and which results in buying merchandise, and enjoy the
shopping spree.
98
RECOMMENDATION
S
&
SUGGESTIONS
99
THE ULTIMATE PRESCRIPTION
For the Mall Developers and Organized Retailers
Customer is King:- It is clear that consumers have changed and they are
looking for something different. Understanding their evolving needs,
aspirations and lifestyles is the underlying key to success for every Mall
Management. The primary emphasis should be on access, experience and
service and the secondary emphasis on product and price. There should
be an effort to improve service by having better trained sales staff, better
availability of products.
Brand the store: -branding the store will increase volume and enhance
customer loyalty. Branding is critical to maintaining competitive
differentiation in an increasingly challenging retail environment.
However, the brand needs to be clearly communicated to the customer.
Develop private label brand:- Private labels act as margin generators,
increasing sales Volume by positioning the label as providing higher
100
perceived value to consumers. In the long run, they also increase the
retailers’ bargaining power with national brand suppliers.
Private labels generate customer loyalty by providing exclusive products,
which works towards differentiation strategy, much sought after by the
retailers.
Mall Format:- Malls have a sustainable competitive advantage over
other formats. Consumer preferences are shifting towards malls from
traditional markets. As a result of consumer shifts, retailers also prefer to
be located in malls in anticipation of higher footfall and increasingly
consumers prefer "All Under One Roof” destination for shopping as
well as eating out and entertainment.
These findings together indicate an excellent potential for a mall with the
following features:-
A superior well-managed leisure experience
Targeted at all members of the household
Comprising of shopping, dining and entertainment, all under one
roof
A wide range of products and services
101
Proximity to homes
As Indians keep discovering malls, the retailers should also discover
what they want and how to evolve the malls. In the near future, there
will be a clear-cut categorization of malls. There will be premium,
luxury and value malls and existing formats will change radically
according to size and category.
102
EPILOGUE
Retail business strategy aimed at marketing of retail stores, positioning of
retail outlets ('small' to mall), branding of store to targeted customers,
development of appropriate customer-centric marketing, in-store facility
and counter sales staff grooming, data collection drive to understand
customers better, application of store's customers data to increase sales,
ongoing customer communication, auditing the retail outlet from 'outside
in' as well as 'inside out', keeping a tab on the changing customer
behaviour leading to footfalls mathematics, economics and statistics is
the need of the hour. Those who can solve the footfall equation correctly,
in time and efficiently, will win the great retail war.
103
LIMITATIONS
104
Limitations
Survey is restricted to Delhi and NCR only.
The study is limited by time constraint.
The sample size chosen may be considered as small to represent
the entire Mall visiting population.
The sample size chosen on a random basis thus the results of the
study may vary with actual scenario.
105
BIBLIOGRAPHY
INTERNET PORTALS:
WWW.COBRAGROUP.COM
WWW.INDIANRETAILER.COM
WWW.RETAILINDIA.COM
WWW.WIKIPEDIA. ORG
OFFICIAL WEBSITE OF RPG RETAIL
BOOKS:
Real Estate & the Retail Scenario: The Impact of Mall Revolution
Retail Branding: From Stopping power to Shopping power by
Michael Tang Oren
Retail Geography and Intelligent Network Planning: Graham
Clarke
Ronald W. Hasty (1997), “Retail Management”, McGraw Hill.
106
PUBLISHED JOURNALS:
Times Journal of Construction and Design.
Morgan Stanley Research, India Retail, June 6th, 2006
David, Marshal “ India’s Malls-Overcapacities and Oversights”,
Images Retail, September 2006, p. 106
Ronald W. Hasty (1997), “Retail Management”, McGraw Hill.
107
ANNEXURE
108
QUESTIONNAIRE
Name: ________________________________________
Profession: ________________________________________
Age: ________________________________________
Location: ________________________________________
1. Have you ever visited any Shopping Mall?
Yes No
2. Which Anchor store do you visit very frequently in a mall?
Big bazaar Food bazaar
Pantaloons Vishal Megamart
Spencer Shopper’s Stop
109
3. Where do you prefer purchasing apparels and accessories?
Malls Local market Both
a) If Malls, why?
Every merchandise under one roof
Wide Variety
Better Customer Service.
b) Local Markets, why?
Cost effective
Easy Accessibility
Bargain Power
110
4. How often do you visit shopping malls /retail stores?
Daily Weekly Monthly Occasionally
5. Which section of Malls you visit mostly?
Multiplexes
Apparel Stores
Food Courts
Anchor Stores
6. What drives you to visit retail stores in big malls?
Huge Variety Quality Merchandise
Sprawling Stores Plastic Money Accessibility
One shop stop
111
7. Will this Organized Retailing concept of malls will last long?
Yes No
8. What is your perception about this emerging Mall Culture?
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(Signature)
112