Kenya malls must specialise or they will keep dying
Garden City Mall. FILE PHOTO | NMG
What you need to know:
Apart from Nairobi CBD and other prime areas like Westlands, rents in the malls are about 25 per cent higher than rents in other buildings, in the same locality.
That means, for businesses in the malls to break-even, they need extra sales. When the malls are not attracting enough traffic, the shops can’t make money.
Specialisation and scaling are also used to theme a mall.
Mall culture is a big thing in Western countries. People go to malls to shop as well as for leisure. A walk in the malls in Nairobi tells you a different story. Malls are literally empty. And when full, people are just walking about without buying. Only eatery places are getting decent footfall. A third of most shopping spaces is empty. Shops open, are just hanging in there. And new malls are still coming up.
Apart from Nairobi CBD and other prime areas like Westlands, rents in the malls are about 25 per cent higher than rents in other buildings, in the same locality.
That means, for businesses in the malls to break-even, they need extra sales. When the malls are not attracting enough traffic, the shops can’t make money. They soon close down.
Why are customers not frequenting these malls? Besides other reasons, there are too many malls in Nairobi. In the last 10 years, we have seen more than 20 malls mushroom. Currently, there are slightly over 30 in Nairobi and its environs. The downfall of Nakumatt, the major anchor tenant for most malls, did not help matters.
Again, the shops in malls are mostly the same. Why drive from one mall to another just to shop for the same things, from the same shops? That is limiting mall exploration. Where a mall has different shops, the whole mall is not uniquely themed for positioning.
When positioning is not done properly, there is always a mismatch of the intended target customer and the customer who finally visits. When that happens, businesses in the mall don’t sell because they are stocked for different customers. So, they soon hit a financial crunch and go belly up.
When malls don’t have differentiating themes, they lack that unique identity to attract varied customers. In Dubai and Bangkok, for example, malls are themed. Different malls target different customers with different products. Some malls could also have various floors positioned for different clientele.
Specialisation and scaling are also used to theme a mall. A themed mall like Emirates Mall in Dubai has a whole floor selling the same items but varied brands, but scaled in a way that you will not find such offers, experience, and products anywhere else.
Mall differentiation is also about reaching out and attracting other new investors.
Graduated rents could also be a solution. A new mall will sure take time before it gets a reasonable number of customers. That is the time businesses in the malls suffer the most. To alleviate that, mall management should consider applying quarterly graduated rents calculated based on the number of customers the mall is able to attract and convert.
Besides unique themes, malls’ management should work closely with their tenants to conduct joint promotions.
Mall culture is slowly dying in Western countries, especially in America, due to online shopping. Malls that succeed invest in structures, strategies, and themes that create a sustainable, unique, and memorable mall shopping experience. In Kenya, we should implement this thinking or we nip this great mall culture in the bud.
