Mall vs. High Street


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August 2013

Are Indian retailers and shoppers smitten by malls or will high streets once again claim their pride of place?

Shopping malls are a relatively recent phenomenon in India. The delightfully chaotic, colourful and bustling Indian bazaars have dominated the retail landscape for the longest time. Every city and town - regardless of size - has its own well-established shopping high streets in prime locations, where specialty stores and corner stores thrive side by side, where street vendors sell their gaudy baubles and family-owned businesses carry on for generations. Although the large metropolitan areas are now being overrun by malls, these high streets haven't disappeared or lost their charm, but they certainly are changing to reflect the mood of the times.

As brands evolve and consumer behaviour slowly shifts from need-based shopping to that of retail therapy, Indian retail too is witnessing a quiet tug of war between the high streets and malls. While at some places, brands are shifting from the cluttered high street environment to malls, certain prominent retailers are purposefully avoiding malls to stand out from the crowd.

So, is there a clear winner? Will the old give way to the new or will the two live happily together?

Malls - The Good and the Bad

• Malls are better organized and offer better infrastructure - air-conditioning, ample parking, food courts, etc., all of which is a welcome break from the chaos of high street Indian shopping.
• Malls are a haven when it comes to offering choice. A wide range of brands, including multi-brand outlets can be found under one roof, which allows the bargain conscious Indian shopper to compare prices.
• With their multiplexes, amusement areas, food courts, and promotional events, malls are big on entertainment and have increasingly become a go-to destination for all age groups.
• Of late, Indian cities are seeing a case of "too many malls, nowhere to shop" due to malls being built without in-depth understanding and research.
• Mall space is getting more and more expensive, with some even demanding a percentage share of the sales revenue.

High Streets - The Upside and the Downside

• With more space available and greater opportunities for customization, high streets are a perfect choice for flagship stores.
• Established brands prefer the visibility and cachet of high streets, but a presence in upscale malls is also a business necessity.
• Standalone stores give shoppers a more personalized experience that is missing from the homogenous nature of malls.
• Premium high streets tend to be more expensive than malls and do not guarantee sales per square feet. Khan Market in Delhi and Linking Road in Mumbai are amongst some of the most expensive retail locations in the world.
• There's a rising trend of luxury brands moving from 5-star hotels to high streets. Old heritage properties that can do with some retrofitting are becoming precious real estate assets, for example, Hermes and Christian Louboutin have set up standalone stores at the historic Horniman Circle in Mumbai.

While high streets in India have not lost their power of attraction, they're reinventing themselves to remain relevant. Having said that, business at malls is brisk too. Ultimately, it all boils down to leveraging the brand, understanding the demographics and striking the right mix. Indian retail isn't slipping into a market-induced fatigue anytime soon. All in all, it's good news for retailers and consumers alike!