MUTUAL TRANSFORMATION; THE SECOND FUTURE - Shopping Centres Association of india
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MUTUAL TRANSFORMATION; THE SECOND FUTURE
RAMIFICATION FOR RETAIL INDUSTRY - INDIA Covid Timeline Retail Impact – India Emerged Trends During Lockdown
COVID TIMELINE - INDIA
Timeline
Jan 30 Mar 15 Mar 24 May 1
First confirmed case Number of confirmed First 21-day lockdown
cases in India crossed announced by Lockdown extended
of coronavirus till May 17
reported from Kerala 100 mark. PM Modi
Shopping malls, theatres, Country divided into Red, Lockdown continues
WHO declares gyms shut as per union Orange and Green zone in with certain
coronavirus a pandemic govt. orders lockdown phase 2 relaxations.
Mar 11 Mar 16 Apr 14 May 16
Scenario under Covid
Government retains the key bars on air travel, metro rail, E-commerce companies can deliver essential and non-essential
malls, gyms and big gatherings. items to all places outside containment zones
01 04
Digital services and cloud kitchens continue to operate. Only 7-8% modern retail trade operational while manufacturing
Restaurants and hypermarkets across malls remain open industries operate at 20 – 30% capacity causing severe supply
02 for delivery. 05 chain bottlenecks
Retailers are building their processes for a surge in e-commerce Surge in demand for staples across the country. India’s top food
by creating e-commerce portals, training existing staff, allowing and grocery retail chains such as Future Group, More, Reliance Fresh,
03 phone orders, hiring more staff for delivery etc. 06 Spencer’s Retail etc. have reported their highest-ever sales in March.
Sourced from publicly available data Mutual Transformation; The Second Future 3
Hypermarket
1%
Electronic 2%
F&B - 3%
RETAIL IMPACT -
INDIA Entertainment - 9%
Home products - 14%
LFL Consumption trends across various categories for July
2020 – March 2021 as compared to July 2019 - March 2020
Departmental
store - 17%
Overall consumption across all categories is expected to go
down by 15% during July 2020 - Mar 2021 as compared to Fashion - 27%
July 2019 – Mar 2021
We believe the first category to come back will be Grocery,
electronics & F & B and the worst categories to be hit are
Cinema - 41%
Cinema and fashion.
Source – PPZ data Mutual Transformation; The Second Future 4
EMERGED TRENDS DURING LOCKDOWN
L o t O f T h e s e T h i n g s A r e H e r e To S t a y
Sanitization - New Level Virtual Celebrations Digital Trials Offline users went Online Work From Home being
embraced
Digital Wallets Preferred Cloud Kitchens get Virtual Entertainment Digital Engagement Social Distancing New
more prominence Norm
Mutual Transformation; The Second Future 5 5
CHALLENGES Market Speak Phases Of Lockdown Mall Reopening Strategy - India
One of the key indicators
While some mall owners to proceed towards normalcy would be the
“ Property taxes and minimum reopening of shopping. Keeping in view considerations
Insisted That they don’t see renegotiation of
electricity charges should be waived for hygiene, cleanliness and social distancing, malls would be better
for the duration of the lockdown, &
rentals at this stage, there are others who are of
the view that one size fits all strategy such as placed for providing an environment which is safe and secure for the
extended interest moratorium & loan general public. Malls have the advantage of controlled areas, where
relief should be offered to mall owners so waiving off rent for all tenants may not work for
all. “we are all in talks with all our tenants. It common practices of hygiene can easily be promoted, advertised and
they can support retailers”
should be remembered that malls have an LRD enforced. Mall Owners have already put in place common SOPs that have
Retail Association
commitment to meet and a large part of the rent set higher standards for cleanliness which are designed to minimize risk and
goes into honouring these commitments.” enhance safety for customers, staff and associates. Social vibrancy will be
Dalip Sehgal, CEO, Nexus malls. restored only when consumption is kick started and this would have a
According to a recent survey multiplier effect to the economy as retail is one of the largest
done by NFX for SCAI, approximately 70 per cent Employers of the formal workforce.
Of Consumers are willing to return to malls within a Irfan Razack, Chairman and Managing
MARKET
fortnight of their opening up. Shopping priorities might change Director, Prestige Group
and preference may be given to essentials, but the activity will
definitely take place. “We also see interest in segments like “Organised retail sector
electronics and beauty, which could attract a large part of the is a major employment generator with
" No owner has said that we
SPEAK
consumers visiting malls after these open up. The fact remains a workforce over 12 million employees
will not discuss a way forward on opening nationally. We have collaborated with SCAI to form
that there is pent up demand, consumers are looking at ways to
the malls and on reliefs. All the mall SOPs and guidelines , that will ensure safe & hygienic
release their energy and what better place than malls?
owners are saying we do not appreciate environments for employees, retailers & visitors.
Pushpa Bector , Executive director
cartelisation and we will not discuss on Organised retail sector is a vital cog in the economic
of DLF shopping malls
cartel basis but one to one.” machinery & resumption will help catalyse
Abhishek Bansal, Executive Director, economic recovery & uplift
Pacific Group sentiments. ”
Atul Ruia, Chairman, The
“The multiplex association of Phoenix - mills Ltd.
India Has also demanded a relief package “ Modern retail is built though
for the industry in the wake of COVID – 19 Financing Through LRD and that the RBI has
outbreak . In a letter to the prime minister, the to resolve this Problem with loans to create a
have asked for interest free loans for three years with a one model wherein the moratorium could be extended even to
year moratorium to multiplexes immediately to help them tide retail by nine months or a year. If the rent does not come in,
over the crisis and prevent any kind of default on salaries, “Most tenants are looking for these will be called NPAs. Mall owners have to estimate real
electricity dues, loans, interest payments.” a full rental waiver during the lockdown damage. Also, waiver with each tenant would have to be
They have also called for exemptions on all taxes- including period and a possible pure revenue worked out with every retailer independently depending on
GST, Show tax, Local body entertainment taxes, property share deal until December or for that the size, category and the brand’s requirements.”
taxes for a year from the date of resumption of matter the entire financial year. This is Amitabh Taneja, Chairman, Shopping centre
normal cinema operations as also a waiver the only possibility for survival” association of India ( SCAI )
of minimum demand Nitin Bansal, Head, Business
development MINISO Life style
Sourced from publicly available data Mutual Transformation; The Second Future 7
PHASES OF LOCKDOWN
CASE STUDIES
Nation Shops/ Shopping centres
First Covid divided into e-commerce may open in
case reported Hypermarkets red, orange dealing with QSR across Bangalore & few
in India India remain open in and green essential malls open for other cities in
Lockdown malls zone goods open delivery June
42 days Phase I INDIA
Restaurants
White house Gyms , Salons & open at 25 % Retail & malls
First Covid 9 states have issues few other capacity, opening at 50% Malls open
case reported stay at home guidelines to businesses open Businesses at capacity in in few other
in the US orders reopen in few states 50% occupancy certain states states
25 days Phase I USA
China mall Retail at
First Covid opening rate Emphasis average 40% of Gyms, leisure
case Wuhan China 60% on take Majority of budgeted sales. centres open Multiplexes
reported in under gradually ( excluding away for restrictions F & B approx. Multiplexes Wuhan open with
China Lockdown reopening Hubei ) F&B lifted 50% remain closed Opens restrictions
38 days Phase I CHINA
DEC JAN FEB MAR APR MAY
TIMELINE
Sourced from publicly available data Mutual Transformation; The Second Future 8
Phase I
(June 2020 – Oct 2020) Phase II
Limited Operating hours shall
New Normal
(Oct 2020 – Mar 2021)
India Gradually Reopening
be adhered as per govt. (Mar 2021 onwards)
directives Food courts, F & B outlets,
1 person per 75 sft GLA & 50% multiplexes & family Health & hygiene
of staff allowed entertainment centres will
Knowledge and awareness
Short Term Coming Back
Only essential services like become operational as per Covid
hypermarkets, personal care, norms. Ensuring consumer safety
home furnishing, infant care, 90% occupancy achieved in & security
Apparel , sports wear &
footwear will be opened
malls New financial models
Festive season would bring
F & B allowed for takeaway only
customer back
Evolved tenant mix
Staff training
Overall consumption across all Digital interaction to avoid
categories is expected to go direct contact
down by 1% during phase 2 of Omni channel experience
reopening
Immersive experiences
Virtual gaming will take off
Fulfillment centres
JUNE 2020
MALL
OCT 2020
REOPENING
STRATEGY - INDIA MAR 2021
Mutual Transformation; The Second Future 9
POST COVID READINESS Customer safety Customer touchpoints Customer engagement Customer behaviour
CUSTOMER SAFETY
Exit Plan / SOP
SECURITY
General safety instructions Special response
team Personal protective equipments
Emergency preparedness
RETAILER
MALL REOPENING
Staff entry & exit compliances
Loading – unloading Revised mall timings
Material movement & vendor Functional team
guidelines Financial compliances & guidelines
Food court, kitchen, staff & counters Parking
Medical checkups Communication strategy
Customer movement
CUSTOMER BOH
Entry, exit & parking Engineering – HVAC
Social distancing guidelines Housekeeping equipments
Washrooms & tools
Movement in common areas
Standard Operating Procedure (SOP) or Exit plans are required to provide a sound strategy in shopping mall by describing the procedures to follow for resuming businesses
and work post lockdown due to COVID 19 pandemic outbreak to ensure customer safety.
Mutual Transformation; The Second Future 11CUSTOMER TOUCHPOINTS
I AM NOT A
SHOPAHOLIC Sanitizing
I AM HELPING THE
ECONOMY Touchpoints
Social Distancing
Signages
Brand name
Brand
Floor Games For Promotion
Queues To Make
It More Playful.
Sanitizing “Let’s make it more fun !”
Vehicles
Mutual Transformation; The Second Future 12CUSTOMER ENGAGEMENT
We have converted our mall experiences to go fully digital to
engage with the customer 5 times a day !
MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY SUNDAY
1 2 3 4
Doctors on Covid Thanks to Covid Quarantine
19 & precautions fighters & safety cooking sessions
measures
5 6 7 8 9 10 11
Virtual Life hacks, Styling sessions Hustling moms The Yoga way Magic
entertainment – Quarantine & work from masterclass
meet flubber lively series home
12 13 14 15 16 17 18
Hyper local Get ripped Digital live Mental health Feel the music The big day
experience masterclass sessions sessions sale
19 20 21 22 23 24 25
Performances Hyper local Make up Learn
by artists experience tutorials Something new
26 27 28 29 30
The celebrity Education based Community City wide big
cat live sessions evangelist & consolidated online
category influencers / offline sales
Mutual Transformation; The Second Future 13CUSTOMER BEHAVIOUR
Adoption Of Invest in comfortable
E-commerce clothing
Avoid Crowding Decrease in repurchase
propensity
Fear Of Being Avoid touching &
Infected feeling products
Digital Adoption May buy without trial
Lower Disposable Reduce time spent at
Income the store
Prefer Local Prefer self service for ordering ,
Brands purchasing & bagging
Mutual Transformation; The Second Future 14NEW DAWN OF RETAIL Emerging Trends Post Lockdown Strategy – New Financial Model New Normal
EMERGING TRENDS POST LOCKDOWN
Trend Impact Trend Impact
High conversion Real shoppers Sanitizing Ensuring safety of
shopping rate touchpoints the customers
Omni channel for Technology based Reduced Lower
topline generation platforms for store sizes occupancy cost
Impact purchase for retailers
Restricted Creating New customer Digital marketing
operational operational engagement & virtual
hours efficiency strategies entertainment
Mobile Digital ordering & Reduced seating Being sustainable at
food courts multiple pickup capacities at multiplexes , 30% occupancy
points FEC and restaurants
Mutual Transformation; The Second Future 16NEW FINANCIAL
STRATEGY
Financial
institutions
Restructuring debt as
per ballooning effect
Moratorium Regularizing debt from
for 6 months for FY 2020-2021
April 2021 onwards
Retailers
%
1st Phase (Jul - Sep):
During lockdown partial combination of
2nd Phase(Oct-Mar): Regularizing
rent amortized over 12 Revenue share & partial
financial structure impacting retailers
months rent
& Mall owners 25-30% 17NEW NORMAL
The most important thing is inculcating confidence in consumers that malls are a safe place to go out for shopping. Consumer
confidence can be brought back by creating a safe and secure environment , keeping convenience & comfort on priority while
creating engaging experience.
Engaging Conversations
Digital Marketing
Virtual Entertainment
Convenience & Digital shopping
Comfort Digital community services
Creating digital homefluencers
Directional Signages
F & B ordered & delivered
within & outside the mall
Shopping delivered home
Contactless shopping &
payments Creating Safe
Tech based appointments to
visit malls / stores Environment
Virtual mall platform to Backend & frontend sanitization
engage with customers Sanitization & hygiene protocols for customers
Social distancing protocols
Crowd management protocols
Mechanical sanitization
Customer and staff circulation protocol
Contactless circulation experience
Mutual Transformation; The Second Future 18“The future depends on what you do today”
- Mahatma Gandhi
Najeeb Kunil
CEO & BOARD MEMBER
najeeb.kunil@ppz.co.in
Credits
Sonal Shrivastav Noel Vessaoker
Director, AUD & DD Director, AUM
sonal.shrivastav@ppz.co.in noel.vessaoker@ppz.co.in
Report prepared by
Kunj Thaker Pallavi Kukdolkar
AGM BD & Strategy Market Research and Business Analyst
kunj.thaker@ppz.co.in pallavi.kukdolkar@ppz.co.in
Mutual Transformation; The Second Future 19THANK YOU +022 4066 4600 info@ppz.co.in www.ppz.co.in
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