How entrepreneurs and mall owners can benefit from POP- UP retail concepts?

Physical shops aren’t dead as yet and they shall never perish, with time they shall evolve. The pop-up shop is a current trend which mall owners or Landlords cannot afford to ignore in the Middle Eastern markets. 

There is a saying that “Future belongs to those who embrace change with both open arms”.

My inspiration to write this article comes from my 5 years old son’s purchasing habits i.e. he immediately starts browsing for toy shops as soon as we enter any mall or shopping centre. 

I once told him that Toys R Us worldwide is closing to which he immediately replied that he shall now start shopping from smaller toy shops or discount centres & closure of giant Toy retailer would not hamper his love for toys.

This reinstates my understanding that “It does not matter how big or good you are, you can always be replaced”. With the closure retail toy store giant, there is a huge opportunity for smaller toy brands or suppliers/manufacturers to enter and do things in more digital savvy manner.

Pop-up retailing is such a trend that provides a platform for such small entrepreneurs to try and test the market with their products or services prior to entering an unknown territory. It’s a $50 Billion segment in the USA alone.

As per Retailscope research in 2016, 52% of the people surveyed believe that pop-up stores are an effective way of discovering new brands. It is also a way for young brands to physically meet their customers and to activate word-of-mouth promotion.

Even luxury brand Louis Vuitton, for example, has just opened its first pop-up store in Italy, the aim being to rejuvenate its image and test new retail places, in order to explore new possibilities. This confirms the effectiveness of Pop-up stores in modern retailing.

Advantages of Pop-up shops are:-

•         They create market buzz.
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•         Low risk as the overheads are limited.
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•         Helps in testing new retail environments.
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•         Help brands reach where their customers are.
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•         It provides extended reach to established brands for generating awareness and for introducing the idea of concept selling.

Advantages for Mall owners to encourage pop-up stores:

•        Drives newness to the mall by short-term leasing of pop-up stores.
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•         Mall participation in encouraging entrepreneurs and first-time retailers to try out the physical retailing.
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•         Driving a cultural change by bringing & creating an ecosystem for nurturing startup pools. You never know, this first-time retailer might end up as one of your permanent tenants and result in the creation of multi-million dollar segment.
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•        Optimum utilization of vacant stores or spaces to generate some revenue as well as combine it with mall’s CSR initiatives.

Case study: “Tell a story”- trailer bookstore on the move.

Brand want to tell its customers more about journey of a book. “Tell a story” has a very simple concept: a bookstore in a van, driving around Portugal to promote national literature all over the country.

Purpose: Brand wanted to defeat language barriers and allow the world to catch a glimpse of the wonderful tales of the Portuguese literature which were missed out because nobody translated them in English.

In this van, roaming the streets of Portugal, tourists will discover Portuguese classics translated into English, French, German, Italian and Spanish. “Tell a story” envisions books as a living soul, not meant to be tucked away in a lonely corner, but rather enrich the mind of human beings. 

Van “guests” can also buy pens and postcards to write their own stories.

Embracing technology: Van also features e-books and access to e-commerce sites wherein the customers can browse and download or place an order for the titles which are not available in the van.

I would be more than glad to discuss my learnings which I have acquired by closely following pop-up retailing with any of my retail fraternity member or entrepreneurs willing to enter into physical retailing in the Middle East market, thus helping my Retail sector to grow beyond boundaries.

I can be reached at riteshmohan@yahoo.com

Remember “For those who dare to dream, there is the whole new world to win”.

About the author:

Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in Middle East region. He specializes in Retail management, Product development and Brand management, Retail Operations, Sales Management and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.

The Retail apocalypse – Transforming role of Leasing professionals and Mall Managers.

The Retail apocalypse! - is the buzzword that I hear very often within my retail fraternity & in Retail forums while talking to brand owners as well as landlords (mall developers).

The panic words often said are: “Shopping is changing forever! ; Brick-and-mortar stores are dying! ”

This negativity in the retail sector prompted me to write & take a deep dive into the phenomenon that’s taking place in Middle Eastern Retail sector.

In my quest to embark on this challenging topic, I conducted face to face interviews with Retail industry Leaders, various telephonic interviews with my friends in Leasing fraternity and one to one discussion with my retail fraternity members as to how they feel about the challenges that new economy is going to pose and how their job profile would need to adapt to new economy.

I started asking each one of them about the challenges they would be facing in retail leasing in 2018. I got a mixed bag of responses:

Few Main Challenges:

a)     E-commerce is posing a severe threat to mall’s footfalls resulting in overall traffic drop which reflects in category decline in spends.

b)    Competition from other malls as they try to lure tenants/brands with attractive rent free period options in order to retain tenants in their malls

c)     Small retailers are shutting down, bigger ones are not expanding and new brands are being very cautious to enter the market in the current scenario. They prefer playing wait & watch game.

d)    Striking a good merchandise mix balance in maintaining a good brand/tenant mix within the mall despite various brand’s shop closures.

Let’s start with the definition of Apocalypse, as per dictionary it means “the final destruction before the end of the world”.

My sincere request to all my fellow Retailers and Retail fraternity members would be instead of thinking of it as the end of the world, we should really be looking at this as the natural evolution of life and business. 

If stores can’t adapt to changing trends and technology, they will die of natural causes.If malls fail to impart an exceptional customer experience which millennials desire then they would too fail. 

Oftentimes, you walk out of the stores empty-handed, frustrated, and feeling like you just wasted your time. These mass experiences with mediocre customer service are exactly what we are trying to get away from!

Instead, World is moving towards personalized experiences that are tailored to our every need.

Challenging times requires each one of us to do the following:

a)     First & foremost stay Positive.

b)    Adapt to the current situation & innovate in order to re-engineer your business model.

c)     Most of the industry leaders mentioned that 2017 was one of the worst periods and they all are looking forward to 2018 as there are signs of improvement for the economy

d)    Positive Economy indicators: Oil prices are becoming stable hovering around USD 62/- per barrel. New VAT implementation is a move to become less dependent on oil resource. Growth in tourist traffic.

All these positive indicators are good indicators for a Retail industry which thrives on customer’s spending and tourist’s inflow.

The retail apocalypse is simply an evolution of our society. People can buy almost anything online now and have it delivered within a few days—if not the same day. 

Today, the role of leasing manager/Head has become more dynamic, it has transitioned from traditional property manager to Business Development/ Marcom Manager kind of role.

The new role demands Retail professionals to adapt to new thinking i.e. Instead of being used for the old way of shopping, perhaps malls should transition into venues for live events where people can come together. Closed stores can be put to good use such as exercise spaces, concert venues.

Basically, let’s get creative about how to use the physical space.

Categories that would drive growth in 2018:

a)     F&B – with an ever-growing list of innovative food /cuisine concepts this category would be most promising category from revenue generation point of view for malls. The trend of eating out amongst millennials is increasing day by day.

b)    Wellness – with more and more people becoming health conscious, the trend for wellness retail is increasing and can be targeted by malls. Hitech Gyms, swimming facilities inside malls, Ayurveda retail concepts and spas would be a growing segment in near future.

c)     Rise in speciality concepts like Daiso, Mumuso & other Korean, Japanese concepts would also contribute in helping malls to resist the retail apocalypse.

d)    A home segment including Home furnishing: This segment has always been underplayed by the majority of malls due to earlier space limitations, now with changing economy, I foresee this category to do well.

e)     Luxury Retail: Luxury is never impacted by any kind of downturn, this category remains evergreen.

f)      Family & Entertainment sector: Cinema would drive this sector’s growth especially when KSA has granted permissions to malls to build cinemas in the kingdom.

For Retailers, this is a chance to get creative in their approaches to customers. Clearly, the old method isn’t working, so now the retailers that are still around have a chance to innovate. They need to find new ways to be relevant and think about how they can make customers’ lives easier in our modern, connected world. 

For malls & landlords, I have shared my wisdom i.e. on which segments they need to focus; I hope mall owners, mall CEOs would find my insights useful in developing their strategy and budgets for 2018.

I would like to close my article with special mention to Mr Marcello Larizza, GM, Line Investments (lulu group), who quoted “In order to succeed, the new upcoming malls have to be developed according to the customer needs and expectations. Online e-commerce business was never an issue”.

I would be more than happy to share more insights with my retail fraternity members who need cutting-edge solutions to their existing issues. You may feel free to contact me anytime as I strongly believe that by sharing knowledge and wisdom, we all can create a wonderful society and wonderful future. You can reach me on riteshmohan@yahoo.com.

About the author:

Ritesh Mohan is a passionate retail professional with over 19 years in the retail sector, handled some of the biggest brands in beauty, fashion and fragrances sector. He has been instrumental in the growth of some of the regional brands as well in Middle East region. He specializes in Retail management, Product development, Brand management, retail operations, sales management, Franchising  & empowering business owners with his wisdom & experience of around two decades in the industry.