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Look ma, no walls!

Jai Arjun Singh | July 03, 2004

No walls or partitions. Brands displaying their wares not in separate shops but sharing space with competitors. That's the USP of Bangalore Central, which was opened last month and is being touted as India's first seamless mall.

Spread over six floors and a total area of 120,000 sq ft, the mall is host to over 300 brands in categories ranging from apparel to electronics.

What sets it apart? Unlike the malls that are mushrooming in every part of the country now, Bangalore Central is not a consortium of clearly demarcated shops, each housing a different company. Think of it as one enormous shop, with hundreds of popular brands sharing space with each other.

It's a model that's popular in the West -- after all, the end result is like a large department store -- but not quite the norm in India yet.

Soon, however, it might be. Pantaloon Retail has invested Rs 30 crore (Rs 300 million) in the mall and says it isn't done with the concept yet -- the company plans to open more such seamless malls in other parts of the country.

First up will be Hyderabad and Pune, where Pantaloon's seamless malls -- called, unsurprisingly, Hyderabad Central and Pune Central -- should open by 2004-end.

The mall in Hyderabad will be around 240,000 sq ft in area, almost twice the size of the Bangalore one. A fourth is in the planning stage and should open in mall magnet Gurgaon next year.

The idea was to offer consumers the widest choice of national and international brands, as well as a high standard of customer service, says V Muralidharan, head, Pantaloon Malls. While that objective can be achieved in a regular mall as well, Muralidharan says that Bangalore Central makes it easier for participating brands by including common facilities like cashiering, marketing, loyalty programmes, and quality feedback. The participating brands can, of course, design their own stands and displays, organise promotions and have a company representative on hand. But responsibility for management of the mall rests wholly with the owner.

The mall includes five levels, with separate sections for men, women, youngsters and children. There is also a section dedicated to services such as travel, investment and insurance, and another that is exclusively reserved for product launches and art exhibitions.

And just because it's different, don't think it will lack any of the hipness associated with regular malls: there is even a live, in-house radio station to keep customers entertained.

The list of brands range from biggies like Lee Cooper, Reebok and John Miller in the apparel and footwear category, to electronics and home appliances companies like Samsung, LG, Sony and Philips.

Naturally, since brands share space with each other, there are no rental charges. What kind of arrangement does Pantaloon have with the brands then? We have different financial models for our concessionaires, says Muralidharan.

In some cases we charge a fixed infrastructure fee plus a variable performance-based commission. In others, the companies pay us a pre-decided percentage of a minimum guaranteed sale.

"There are several advantages in being able to display our brand in a seamless mall like this one," says Anupam Bansal, director, Liberty Group, which is one of the participating companies. Bansal admits that the economics work out well, compared to an owned outlet where the maintenance would be the company's own responsibility.

"Since so many companies are pooling together their resources, we get to benefit from economies of scale," he says.

Moreover, the maintenance of the mall is in Pantaloon's hands so that's one area less for us to worry about. Bansal adds that the space utilisation in Bangalore Central is much better than in a regular shopping mall, due to the lack of partitions.

The walls and partitions in other malls take up around 30 per cent of space, which can be called wasted areas, he says. Here, much more can be done with less space.

Shashidhar C K, zonal manager-Karnataka, LG, another participant, adds that such an arrangement is beneficial to a confident brand. "We believe in aggressive marketing and our philosophy has always been that the customer should be allowed to see what the competition has to offer," he says.

"It suits us to share space with our competitors and explain to customers on the spot how our products are better." And according to him, it's worked. "We are very pleased with the response in the first month -- we have been outselling other brands in the category."

Muneesh Dhawan, regional manager-south, Sony India, agrees that the added element competitiveness enables each brand to leverage its strengths.

With the challenge posed by having to share space with competitors, the standard of display automatically goes up, he says. There is no room for slipping up.

Dhawan says a seamless mall removes the barriers in a customer's mind. When each brand has its own showroom, a consumer may hesitate to enter a shop that looks crowded. With this set-up, however, it's easy to drift from one display to another.

Also, he says, customers who come to a conventional mall with the express purpose of shopping for, say, apparel would probably not enter the Sony showroom at all. But here, it's much more of a free-flowing experience.

"We have a chain of exclusive stores around the country that retail only Titan brands," says C K Venkataraman, business head, Titan.

Naturally, the space in such outlets is larger than the space we can get in a seamless mall or a large format store. It's easier to display the entire range of our products when we have our own store.

However, Venkataraman concedes that the walk-ins to a seamless mall are much higher. "It benefits us because it helps increase visibility for the brand. Our operating costs are also generally lower in such a format."

One downside of a seamless mall is that the participating companies inevitably don't have the same level of control over their operations as they would if they had their own exclusive stores.

"Here, we are governed by secondary EDP systems," says Liberty's Bansal. "Before any decision can be taken, we have to discuss everything with the mall management."

But Shashidhar doesn't think this is a major cause for concern. "Ultimately, the aim is to display one's products and sell them," he says. Other factors are secondary.



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