1.

Lack of Market Research/Feasibility:

It has been well acknowledged by the industry experts that earlier malls were constructed without
carrying out a thorough research on their feasibility. This is also one of the reasons of their failure in
spite of good response from public especially in metros. The market scenario is changing fast
wherein more and more developers are hiring mall designers and property consultancy firms to
conduct feasibility and positioning studies for their projects.

2. Zoning:

This is the common practice where mall developers/landlords tend to lease out retail space on a
first-come-first -serve basis to attract others and ensure their they get the return on their invested
money as soon as possible. Though as such nothing is wrong in the practice, considering everyone is
the business for earning money. But this practice creates a sub-optimal tenant mix like a food and
beverage shop next to a kids wear instead of a book or toys store.

3. Design issues:

Designing is also one of the major lacuna in the existing mall management practices. This situation
becomes worsened during weekends and festive seasons. Having provision for one entry and one
exit points lead to overcrowding and sometimes reason for road rages. Further, improper fencing
and malfunctioning of escalators is also one of the reasons for recent casualties in some malls in the
recent past. Further, the visibility of retail units from all vantage points is poor in most of the malls.

4. Fee Promotional Activities:

In the majority of the malls, very few promotional activities are organized in the malls. The reason is
that developers perceive that these events only help increase foot traffic and not revenues.

5. Facility Management:

Lack of facilities with regard to appropriate infrastructure is also the reason for the failure of the
malls. Facility management basically means the integration of people, place, process and technology
in a retailing place. It also means optimal utilization of available resources to meet organisational
needs. It broadly includes infrastructure, ambience and traffic management.

6. Parking Management:

In today’s scenario where everyone has an access to car, retail car parking management is the first
port of call for customers and the very first impression about a store. Whether you run a small
grocery store or multi-million large shopping complexes, the parking experience you offer to
customers, will decide their mood for their whole shopping experience. Providing large open spaces
for car parking will not even work, retailers should ensure convenient and safe parking facilities, with
trouble-free direction-finding and clear pathways are necessary for smooth parking. First-class
parking facility not only put your customers in a better mood but increases their stay duration in the
shopping complex.

7. Malls a novelty in Tier-II and Tier III cities:

In India, Tier II and Tier III cities face unique issues which are not seen in metro cities. These issues
are not only hampering the growth of malls but create pathetic situations for retailers who invest
their hard-earned money in owing of retail outlets.
The primary among them are:

(i) Customer characteristics

(ii) Less traveled therefore, no exposure to modem facilities

(iii) Suffering from ‘Glass Syndrome’: Typical Indian consumer is exposed to bad shopping conditions,
bad hygiene, congested shopping areas and methods to an extent that when he enters to a mall
which has state of the art infrastructure, clean, properly lit, polished, escalators and elevators, air
conditioned, span toilets, shining with glasses, he that retailers will recover the cost of these
amenities from the goods sold here which is not always true. Therefore, he visits malls for the
purpose of knowing latest trends, time pass, and a means of outing.

8. At the end of Mall Developers:

(i) Developing local supply chain

(ii) Government/political interference

(iii) Improper selection of brands to the environs and economic capacity of the people

(iv) Lack of professionalism in management

(v) Lack of skilled employees

(vi) Lack of understanding of the catchment area

(vii) Negative attitude of locality

(viii) No uniqueness or differentiation with its competitors

(ix) Wrong positioning of the mall and store

(x) Wrong selection of tenant mix

9. At the end of Brands:

(i) Delay in rent and CAM payments, which hamper the cash flow and thus the operational
smoothness.

(ii) Government’s Role – The local bodies such as Municipal Corporation are simply silent spectators.
Town planning department should come forward and take steps to avoid concentration of malls in a
particular area as it puts pressure on the entire system consisting water supply, traffic, parking,
congestion, electricity, drainage, etc. Further, with the breakup of joint family system, families will
go smaller, giving rise to traffic and parking problems. Therefore, traffic and parking issues, shortage
of time shall force people to shop/entertain and eat at a single location. At the end of the day, only
those malls which follow Darwin’s theory (survival of the fittest) will survive.

(iii) Lack of coordination with mall management – any suggestion from mall developers is treated as
“mall owners trying to teach a brand – ‘how to do business’.

(iv) Lack of interest and supervision from head office and poor ability to understand problems of
store managers which vary from store to store.

(v) Poor delegation of powers and authority to the store managers.

(vi) Poor participation in mall events and promotions.

(vii) Presence of many stores of same brands in a particular area spoils the charm and cannibalizes
the business.

(viii) The mall industry is facing problems such as excessive rentals, selling retail space to individual
investors and a lack of the right retail mix to attract best possible consumers.

(ix) Though the retail sector is growing 30 percent per year, but the industry does not have the
required infrastructure to supplement this growth.

10. Theft:

A mall is made up of several different stores, sections, it is almost impossible to continuously watch
and supervise each one. Therefore, theft is an important security matter for many malls, mainly if
the individual stores have no system in place with which to catch thieves and monitor theft among
customers and employees.

The best way to overcome this challenge is to deploy well trained security guards at all possible
locations, working in various positions around the facility, working closely with the individual stores
to identify doubtful behaviour. Posting warning signs listing consequences of theft is prevention for
theft in malls.

Mall Designs

As the security breaches at the malls have become common, the developers feel it is tough to make
the destination terror proof and thus a lot of emphasis is put on the training and constant vigilance
to ensure minimum damage. However, we at DLF Mall of India,feel the processes start at home, and
in this case we refer to preparing the malls itself for such unwanted situations.

While in India, the retail industry is booming and this is helping the retail real estate segment to
grow, it is the best time to revisit and equip the mall with the security measures. The first aspect to
be taken care of is the Mall Design.

Planning and creating the mall designs is a confident move towards safety from the developers
perspective. Efficient planning in terms of the installing door frame and handheld metal detectors,
CCTV cameras (Pan Zoom Tilt surveillance), and preparing the emergency and evacuation exists,
visitor friendly signboards, creating spaces for surveillance and monitoring rooms and adjustments
of safety equipment is equally important as per the international industry norms and the malls must
take proper consideration of the same.

There must be evacuation plans in place to prevent and ensure minimum damage. The malls in the
metro cities are working towards the same; one such move is by DLF to be collaborated with the
international consultants to ensure all active zones are secured. With respect to the evacuation
plans, there are due emphasis on barricades and partial evacuation emergency exits rooting plan
which not only secures the retail space but also the parking spaces within the mall.

Training and Protocols

The key fact is that public places such as malls are vulnerable and the developers must work towards
making it protected zones so that the consumers feel at ease and are not scandalised due to the
frequent security breaches. There is a need to ensure that a part of the investment goes into the
infrastructure and the trainings of the security personnel at the mall. Understanding the situation
and handling it accordingly is the key to operate safe at the mall. The security teams must be given
proper trainings at the mall to understand the new technology and functions of the validation
devices.

Keeping pace with the international norms, we have engaged with Israel combative experts to
ensure efficient massive training at the base as well as higher levels. This would include learning to
identify suspicious elements and reacting to the situations; in fact the mock drills with the help of
the authorities must be conducted regularly for a better damage management.

Following protocols is equally important to prevent and reduce the impact of the damage. This adds
to the security enhancement and ensures that the plans and processes are in place to safeguard the
visitors. Understanding and following the protocols would help in minimum damage as it training
and reacting to the security crisis, constant surveillance through CCTV cameras, perimeter patrolling,
and evacuation and partial evacuations and sanitizing the malicious activities.

Through the attacks that have been in the news for quite some time, it is sure that the malls have
been exposed to an unsecured arena and thus, it is when we must work on the preventive model
rather on a damage control model and invest in training, technology and tactics that can secure and
make malls a visiting destination! At DLF Mall of India we are committed to the safety and security of
our customers and are leaving no stone unturned to ensure a safe shopping experience.

Retailers today face many challenges, including increasing competitive pressures, thin margins, high
occupancy costs and unpredictable supply base that come in the way of their attaining operational
efficiency and profitability. In the mall they not only deal with additional super area loading but also
the additional CAM expenses.

As organized retail grows, the market will only become more competitive and developers will have
to work hard to differentiate. Faulty mall management along with inappropriate tenant mix would
lead to poor mall traffic and closure of individual stores in malls. Professional third party mall
management service providers are hence likely to come to the fore. They not only understand these
business challenges, but also have the ability to help retailers effectively deal with them.

Generally there are two types of consumers who visit malls – focused buyers and impulse buyers.
The time spent by focused buyers inside the mall is relatively lower as compared with impulse
buyers who spend a lot of time window shopping. Malls which have entertainment zones and/ or
promotional activities have larger foot falls and more percentage of impulse buyers. Mall
management becomes critical to attract impulse buyers. For example, Ansal Plaza in Delhi has
ensured its success through good promotional events and mall management practices since its
inception in 1999. Its amphitheater which is dedicated to promotional activities has ensured footfalls
despite newer malls coming up in the NCR region.

Contrary to popular misconception that mall management is synonymous with facility management,
mall management actually takes care of the issues like:

- positioning

- zoning (tenant mix and placement within mall)

- promotions and marketing

- facility management (infrastructure, footfalls, ambiance)

- finance management

Various business models are adopted by retailers/ developers while utilizing the services of a

There are very few mall management companies in India at present. Large real estate developers
and retail chains either have their own mall management divisions or have contracts with
international consultants. In developed markets mall management is an established independent
service line. Till recently contract model was the norm in India. But the revenue sharing model is
increasingly becoming popular with retailers in India due to the present economic situation.

India is yet to embrace the concept of third party mall management in retailing. Some of the issues
could be:

- Planning the mall around anchor tenants

- Lack of market research by developers

- Tendency to lease out on a FCFS basis

- Perceive outsourcing as additional cost

- Lack of accountability for in-house promotional activities

- Improper planning for space (lack of parking space, single entry/ exit points)

With the slowdown of the realty sector, developers might give the mall management practice a
thought in order to ensure that the slowdown does not affect its footfalls. Mall market in India has
become extremely competitive especially due to the sudden boom in the real estate sector. Malls
have come up in the Tier II cities and rural areas as well albeit in a smaller and different format. With
increasing competition from high street retailers, developers are finding it difficult to achieve 100%
occupancy rates.

A specialist’s retail property management skills enable property owners to receive the benefit of
master planning and development expertise which is critical to ensure that malls are strategically
positioned for long-term growth and success.