Rise of e-commerce platforms challenges traditional brick-and-mortar malls: Abhishek Bansal, Executive Director, Pacific Group
In a conversation with SME Futures, Pacific Group’s Abhishek Bansal talks about the burgeoning mall sector of India
Anushruti Singh November 16, 2023
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According to Deloitte India and the SCAI, malls and physical shopping centres have played a pivotal role in the growth of the retail sector. Currently, it is valued at around $1.3 trillion. Also, growing consumption is making leading mall developers increase their mall’s sizes, which implies that malls are increasingly being seen as more than just shopping centres.
In a one-on-one conversation, Abhishek Bansal, Executive Director of Pacific Group throws more light on the burgeoning mall sector of India.
You’ve witnessed mall culture evolve over time. What do you think is the modern meaning of mall culture, given current consumer behaviour?
There has been a drastic change in the retail landscape. Consequently, the definition of mall culture has evolved significantly due to shifts in consumer behaviour. Previously, malls were primarily places meant for buying goods. However, new consumer behaviour has turned them into ‘experience centres.’ Now they not only serve shopping needs but have also become multifaceted spaces combining retail, dining, entertainment, technology, and even workspaces.
This shift to experiential retailing aims to offer distinctive and immersive experiences and is driven by various factors, including a focus on convenience, technological integration, personalisation, sustainability, and more.
By convenience, I mean that modern-day consumers prioritise time as much as they do quality. As a result, shopping malls now offer a mix of services under one roof, enhancing the convenience factor for consumers.
Malls are also incorporating technological experiences to entice shoppers. Physical stores have embraced technology to provide better customer service, multichannel shopping experiences, and personalised marketing.
Also, there is a need to understand the immediate demography of the mall and focus on learning about an individual’s shopping preferences to provide a more personalised shopping experience. Furthermore, malls are now seen as socialising spaces where people can spend quality time with friends and family. Many shopping malls are aligning themselves with consumer values, such as sustainability, by promoting eco-friendly brands and practices.
How is customer behaviour in malls altered as new categories and units are added? How has Pacific Mall evolved in response?
With the evolving mall culture and the introduction of new categories and units, the way consumers spend their time in malls has changed significantly. The infusion of entertainment, dining, and experiential retail has led to an increase in the time consumers spend inside malls. The mall is no longer just a shopping venue but a destination for leisure and entertainment.
We at Pacific Malls pride ourselves in offering the best movie experiences, F&B options, gaming zones, big food courts, and an excellent mix of retail brands, which has led to longer visit durations. Also, the inclusion of pop-up stores and special events, such as concerts or festivals, attracts longer and more frequent visits.
These changes signify a shift from a transactional relationship to an experiential one, making Pacific Malls a significant hub for social interaction and entertainment. The success of a modern shopping centre, therefore, depends not merely on sales per square foot but also on experiences per square foot.
Offline vs. online, how is mall culture and specifically Pacific dealing with that?
While online shopping offers convenience for anytime shopping, a diversity of products, and efficient price comparison for great deals, offline shopping is all about experience, human interaction, and immediacy.
The competition between these two retail channels has led to omnichannel retail, where brands aim to provide a seamless buyer journey, mixing both digital and physical experiences.
At Pacific Mall, the focus is on the right kind of tenant with a special focus on F&B and gaming zones. Engaging events keeping local culture and traditions in mind are our ways to relate and connect with our customers.
Gurdas Mann’s recent live concert at Tagore Garden Mall, Quick style’s performance at Pacific Premium Outlets Mall, Jasola, Movie Under the Stars Event at Dehradun, Music Masala, and Dandiya Dance Fest at D21 Dwarka are some of the recent experiential events that resonated with our customers.
Which trends have exploded in recent years? Also, what will be the major trends in the mall sector in 2024?
Based on recent trends, several key trends have emerged in mall culture internationally, and the same is being incorporated in the Indian mall business as well:
Balancing online with offline: The integration of digital and physical retail channels, sometimes known as ‘omnichannel retailing,’ has become critical. Malls are mixing the ease of online purchasing with the tactile experience of physical businesses.
Focus on wellness: Malls are increasingly emphasising health and wellness brands. Malls are reacting to this trend as consumers become more health conscious.
Experiential shopping: Malls are evolving into experiential centres, where shopping is just one aspect of the overall mall experience. Other attractions may include movie theatres, food courts, gaming zones, and event spaces.
Pop-up stores and events: These can attract a lot of customer attention, creating a sense of urgency and excitement. Pop-up stores also give online brands the opportunity to have a physical presence and interact directly with their customers.
Sustainable and local retail: There is also a trend for incorporating more sustainable and local retail options. Shoppers are becoming increasingly conscious of their impact on the environment and the importance of supporting local businesses.
Though all the above factors are going to play an important role in the mall business, experiential shopping and pop-up stores & events are the top current trends.
Tell us about the real estate aspect of mall culture?
The mall industry is going through several changes and challenges.
Location and accessibility: New developers are paying close attention to mall locations and accessibility. Proximity to transportation hubs, residential areas, and business districts is essential for a mall’s success.
Shift towards mixed-use developments: Real estate developers in India are increasingly focusing on mixed-use developments, which combine retail spaces with residential, office, and entertainment components. This aims to make malls more sustainable by ensuring foot traffic throughout the day and reducing dependence solely on retail sales.
Renovation and rebranding: Many existing malls in India are undergoing renovations and rebranding themselves to stay competitive. These efforts include modernising infrastructure, improving the tenant mix, and enhancing the overall shopping and entertainment experience.
Sustainability: The focus on sustainability is increasing in mall development. Developers are incorporating eco-friendly features, energy-efficient systems, and green spaces within malls to attract environmentally conscious consumers.
What are the challenges that the mall sector is facing?
High operating costs: Maintaining and operating large mall spaces can be expensive. This includes costs for utilities, security, maintenance, and personnel. High costs can affect the profitability of malls.
Changing consumer behaviour: Consumers are increasingly seeking experiences over traditional shopping. Malls are finding it difficult to adapt by providing more entertainment, dining, and event-based experiences to attract visitors.
E-commerce competition: The rise of e-commerce platforms has led to increased competition for traditional brick-and-mortar malls. Many consumers now prefer the convenience of online shopping, which has affected foot traffic in physical stores.
Online-to-offline (O2O) retail: The integration of online and offline retail experiences (O2O) means that consumers may browse products in malls and then purchase them online or vice versa. Mall operators need to adapt to this shift in behaviour.
Demographic changes: Changes in demographics and urbanization patterns can affect the accessibility and relevance of malls. Developers need to consider the demographics of the surrounding area when planning and managing malls.
Sustainability and environmental concerns: Increasing environmental awareness has led to demands for sustainable practices in construction and operation. Malls are under pressure to reduce their carbon footprint and incorporate green practices.
What are your expansion plans and upcoming projects?
Tier 2 and Tier 3 cities are our new destinations as urbanisation is fast in these cities. In this financial year, Pacific Malls will be adding around 15 lakh sqft of premium retail shopping area. Recently, we inaugurated a 3 lakh sqft Pacific Premium Outlets Mall in Jasola, South Delhi, and a 4 lakh sqft Mall in Faridabad, NCR. In a few months, we will complete our largest projects, the Mall of Dehradun, the Pacific Mall in Faridabad, and in two years, another flagship-sized big project in Jaipur.