INTRODUCTION Shopping Malls
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INTRODUCTION Shopping malls The latest trend in the corporate universe is of the emergence of the shopping malls. Shopping malls are an emerging trend in the global arena. The first thing that comes in our mind about the shopping malls is that it is a big enclosed building housing a variety of shops or products. According to historical evidences shopping malls came into existence in the middle ages, though it was not called so. The concept of departmental stores came up in the 19th century with the Industrial Revolution. Consumers wanted a better shopping experience and this demand gave rise to the emergence of shopping malls in India . Originally the first of the shopping malls was opened in Paris. Then the trend followed in the other metros over the world, and there was a spree of shopping malls coming up at various places. In this age of mass production and mass consumption, the concepts of shopping malls is most modern method of attracting consumers. The concept of shopping was altered completely with the emergence of these shopping malls. Shopping was no longer limited to a mere buying activity - it has become synonymous with splurging time and money. People simply go about roaming through the shopping mall in order to peep through the window of the shop and often ending up buying something they like. The consumers desire a combination of comfort and suitability which the shopping malls cater to, and so this format of shopping has become so popular all over the world, and especially so in India. The inclusion of amenities like restaurants, multiplexes, and car parks attract more and more crowds to shopping malls, that are considered family hangout zones. 1 Advantages of shopping malls: o Increase in the growth of the organized retail sector o Monumental increment in economic growth o Employment generation by the organized retail sector o Good competition means better products & services Disadvantages of shopping malls: o The companies with superior resources would muscle out the ones inferior to them. o Monopolization of the organized retail sector In India, the emergence of shopping malls has mostly altered the lifestyle of the consumers. With the growth in income, changing attitudes, and also the demographic patterns favor the emergence of shopping malls. The trends to follow in the future: The shopping malls favor a growth in the Indian organized retail sector by 10% within 2010 There would be different formats of shopping malls depending on the region. 2 BRIEF HISTORY In the United States, people began moving to the suburbs during the 20th century. Shopping malls were built to serve consumers living in areas outside of the cities. By 1916, a shopping mall called The Market Square opened for business in Chicago, IL. The facility was comprised of 28 stores, apartments, and offices. The Market Square was located in the expensive Lake Forest suburb and is thought to be one of the first planned shopping centers in the U.S. In 1950, the Northgate Shopping Center was built in Seattle, Washington. This shopping mall boasted two rows of stores on each side of an open-air section where shoppers could walk. Two department stores anchored each end of the shopping center. The first enclosed shopping mall was Southdale Center in Edina, Minnesota which opened its doors in 1956. Up until the mid 1990s, most modern-day developers built enclosed shopping malls in order to create a climate-controlled shopping environment. Today, developers are returning to the creation of open-air shopping malls. Outlet malls, shopping centers featuring name brand retailers selling their products at discounted prices, are often built in an open-air format. 3 Types of Shopping Malls In general, you will find only regional centers, superregional centers, and fashion/specialty centers on this Web site. Relatively few community centers were chosen, but appear here because the center may have, at one time, been considered a regional center. Only a few theme/festival centers were listed in heavily urbanized areas, such as San Francisco, because of their particular attractiveness or size. Finally, the new designation, lifestyle center, displays because of their classic-mall type appearance even though they are without a classic-mall anchor store. Fashion/Specialty Centers Characterized as higher end, fashion oriented centers between 80,000 and 250,000 sq. ft. Community Centers Characterized as having between 100,000 and 350,000 sq. ft. Usually two types of anchors, such as a discount department store or large specialty/discount apparel store. Lifestyle Centers A new designation that has a loose definition. Generally, it's a center that does not have an anchor tenant in the classic sense (that is, a department store). However, lifestyle centers increasingly have a cinema as a major tenant. Others have just a small collection of exclusive shops. 4 Outlet Centers Characterized as manufacturers' outlet centers between 50,000 and 400,000 sq. ft. Regional Centers Characterized as having between 400,000 and 800,000 sq. ft. Usually two or more anchors, such as a conventional department store, junior department store, mass merchant, discount department store, or fashion apparel store. Superregional Centers Characterized as having over 800,000 sq. ft. Usually three or more anchors, such as a conventional department store, junior department store, mass merchant, or fashion apparel store. Theme/Festival Centers Characterized as tourist-oriented, retail and service centers between 80,000 and 250,000 sq. ft. 5 COMPONENTS OF SHOPPING MALL Food court A shopping mall food court consists of food vendors offering a selection of food. At a typical food court, food is ordered at one of the vendors and then consumed at a seating area, which is normally a plaza surrounded by the counters of the multiple food vendors. Department stores A department store is a retail establishment which specializes in selling a wide range of products without a single predominant merchandise line. Department stores usually sell products including apparel, furniture, appliances, electronics, and additionally select other lines of products such as paint, hardware, toiletries, cosmetics, photographic equipment, jewelry, toys, and sporting goods. Certain department stores are further classified as discount department stores. Discount department stores commonly have central customer checkout areas, generally in the front area of the store. Department stores are usually part of a retail chain of many stores situated around a country or several countries. 6 OBJECTIVE THE PURPOSE OF DOING THE PROJECT IS TO FIND OUT 1. WHAT ARE THE FACTORS THAT IS MAKING SHOPPING MALL HUGELY SUCCESSFUL ? “The success of modern shopping centers relies on a number of critical success factors. These factors include attainability, effortless business, service variety, ambience, price, active marketing and cleanliness,” says Arto Lindblom, Professor of Retail and Channel Management at the Helsinki School of Economics. The atmosphere of shopping center created by sound registration, color scores and illumination, alongside with the professional concept create additional comfort for visitors which influences loyalty of buyers and their desire to pass more time in the shopping center. Honestly speaking, the competition is amplifying, and factors on which we did not reflect earlier (color, light, a sound and even smells) now act as an advantage in fighting for the buyer. 7 2. FFECT OF SHOPPING MALLS ON THE SMALL RETAILERS ? Retail trade contributes around 10-11% of India’s GDP and currently employs over 4 crore people. Within this, unorganized retailing accounts for 97% of the total retail trade. Traditional forms of low-cost retail trade, from the owner operated local shops and general stores to the handcart and pavement vendors together form the bulk of this sector. In the absence of any significant growth in organized sector employment in India in the manufacturing or services sector, millions are forced to seek their livelihood in the informal sector. Retail trade, which has been a relatively easy business to enter with low capital and infrastructure needs, has acted as a refuge source of income for the unemployed. 8 Organized retailing has witnessed considerable growth in India in the last few years and is currently growing at a very fast pace. A recent KPMG survey report prepared for the FICCI states that organized retail, estimated as a $ 6.4 billion industry in 2006, is projected to reach $ 23 billion by 2010. The share of organized retail in overall retail sales is projected to jump from around 3% currently to around 9-10% in the next three years. A number of large domestic business groups have entered the retail trade sector and are expanding their operations aggressively. Several formats of organized retailing like hypermarkets, supermarkets and discount stores are being set up by big business groups besides the ongoing proliferation of shopping malls in the metros and other large cities. This has serious implications for the livelihood of millions of small and unorganized retailers across the country. Need to Regulate Organized Retail Large format retailing is controlled and regulated across the world. The experiences of Western European as well as South East Asian countries are particularly relevant in this regard. However, an appropriate regulatory framework for the organized retail sector in India has to be framed keeping in mind the Indian specificities. India has the highest shop density in the world with 11 shops per 1000 persons, much higher than the European or Asian countries. The potential social costs of the growth and consolidation of organized retail, in terms of displacement of unorganized retailers and loss of livelihoods is enormous. Regulation in India therefore needs to be more stringent and restrictive. There are broadly three ways in which the adverse impact of the rapid and unbridled expansion of organized retail can be felt: 9 1.