Ecommerce has taken the world by storm and the convenience of shopping online is invaluable. You can buy everything from bespoke designer items to clothing for your kids and even your monthly groceries online. But this doesn’t take away from the fact that there is still a place for brick and mortar stores.
Especially in South Africa where shopping is as much of an outing as it is a necessity. If you look around the the big malls, almost any time of the month you’ll see families out and about, either browsing and window shopping or actually purchasing. Some of us like to try things out in real life before making a purchase. But shopping malls are also full because of the entertainment factor. These, often monstrous, buildings are decorated with beautiful interior design, sparkly lights, food places and even entertainment spots or arcades. It’s a surefire way to spend a Saturday morning, afternoon and even evening, when you have nothing else to do.
Interestingly, South Africa ranks fairly high on the list of countries who invest in shopping malls. Urban Studies conducts feasibility studies for shopping centres and they released research that states that South Africa ranks at number five on the list of countries with the most shopping malls. We are a, technically speaking, third world country, and yet we are number five after the United States, Japan, China and Canada. And so, as a retailer, you should definitely look into the idea of moving your shop (whether it currently is a small standalone shop or an ecommerce site) to a big mall. Of course, this will improve your foot traffic but most importantly this opportunity gives your brand exposure.
Malls are strictly governed
Moving into a mall is something you need to navigate carefully as there are steadfast rules and guidelines. Big shopping centres are well-managed entities that have been planned and structured in a very certain way. Their lease agreements are particular and they’re very confident in their ability to fill the space should you simply no longer want to take the opportunity.
Does your target market align with their shopper profile?
It’s all good and well to move into a big mall because there will be lots of people to entice into buying. But you need to have your ducks in a row with regards to your target market segmentation and your competitor analysis. If you have a clear idea of who you’re marketing to and who you want to tackle as your target buying audience, you must make sure the mall you’re looking into can offer you those people. There’s no point in renting retail space in a mall that caters for a lower income bracket if you are a high-end designer boutique store. Also, consider if your competition is in the very same mall. How does this serve you, if at all? If you’re happy to have your competitor share the mall with you, then consider your position closely.
It costs more than you think
You will need, as with all rental agreements, a deposit to put down to secure the property. You will also need budget for shop fitting and signage costs as well as point of sale solutions, electricity costs, cleaning levies (if not included in the rent) and the recruiting of staff. And then on top of all of that, you need to still include all your current operational costs.
Consider the security
Big shopping malls are often very secure but they’re also the biggest targets for larger crime syndicates. During the festive season you often hear about criminals taking chances on robbing shops in malls and no matter how secure the mall is, they still take the chance. You want to understand the security measures in place before you sign the lease. Do they have visual criminal deterrents such as turnstiles, revolving doors, metal detectors and the like? Do they have hidden security cameras? Have they employed security guards who stand watch at the turnstiles or boom gates? How secure is the actual space you’ll be renting? Do they have emergency buttons for your staff to call for help if necessary? These are important things to consider as if anyone is hurt in our store you could be held liable.
What if you can’t make rent?
The horror stories exist about businesses who struggle to make rent and then eventually don’t pay it and are then, naturally, evicted. Of course, no one wants to be in that position. So you need a backup plan. You cannot expect sales to come flooding in. It’d be a good idea to have some money in the bank to carry you when the sales run dry. Also, It’s good to have an active and working relationship with the mall management from the day you move in. Keep them posted on your business activities and your performance reports. They understand their mall better than anyone else, which means they have an in depth knowledge of their shoppers’ habits. You can use this to your advantage or ask them to assist you with maximising the market and boosting your sales.
Before signing yourself into an agreement with a shopping mall, make sure you understand what you’re getting yourself into. Fledgling stores go through a startup phase and it’s not always an easy time. Buying habits must be tracked and you must have plans in place should things go awry. However, if your house is in order and you are able to mitigate against risk, you’ll find your retail store can turn into a goldmine.