Case Analysis: The Retail Conundrum

This is a classic case that ails most retailers in India — the puzzle of how to crack the code — being at the right location and getting the right footfalls! Indian retail is replete with malls that have failed to sustain / survive and what has led to this is an inherent lack of understanding of what make a mall successful — its raison d’etre. Most malls have a very narrow, short-term perspective and very few are here for the long haul or, at least, understand what would help them sustain over a longer period and flourish.

What works in favour of great malls: It is all about catchment, location and right size and ambience when it comes to the physical aspects. Let me articulate a bit more:

The most important factor while selecting a location for a retailer is being present in the right catchment and within the catchment, finding the right location (Read: the best mall and the best location within the mall) and finally getting the sizing correct (depending on the potential of given catchment). However, good malls, if badly managed or maintained, head for a disaster sooner than later.

The case does not mention the quality of the catchment. So, let us presume we are in the right catchment. The next point of contention is the right location — Quartz seems to be overall a good mall (though there is very limited data here on the commercial success).

What works well for successful malls is always an appropriate mix of right tenants and having complementing tenant adjacencies apart from the clarity on what does the mall stand for, who is its audience. And the experience inside.

Somewhere we see that Quartz has lost the script there — it started as a premium mall but later we see a slew of mass brands in the basement — you cannot be everything to everyone!

The last bit on location. The learning is within a good mall, a retailer who is on the right floor, the right location and with the right neighbour, gets better traction than the one in a wrong location.

Volyoom may have been in the right mall, but was in the wrong location. Ideally there has to be a great proposition that would have pulled the customer to the basement. Alas, Quartz has failed this test!

But since salon visits by customer is a lot more pre-planned and less of an impulse, too much worry on location is waste of critical resources.

The second is, was Volyoom delivering an experience (which it is known for) even in this salon? The biggest challenge today most salons face is inconsistency in service across locations. Customers sense this faster and disown the brand in the location.

Also, the question is, did Volyoom buckle under pressure from mall or business performance? If Volyoom was honouring all its obligations on a regular basis without any breach as per agreement, there is no reason why they should be asked to leave or wind up. Did they not have a water-tight agreement? Or did it buckle down under the pressure of profits?

Somebody has rightly said: “A relationship between mall and store should be like ‘fish and water’ and not like ‘fish and fisherman’.” Volyoom seems to have missed the above here. No signages, no floor directory, no visibility. Very clearly indicating a breakdown of true ‘partnership-based communication’ between mall and brand. Also, even for a mall, getting a new tenant is a big trauma. There is not only leakage in revenues but also leads to dropout of customers who frequent that store. Why didn’t Volyoom discuss their issues with the Quartz team and come out with a solution?

Opportunities don’t happen. You create them. And that is exactly what is on platter for Gigil. If they do the following: 1) Catchment assessment; 2) Property /location study; 3) Commercial feasibility; 4) Competition benchmarking; And if they score a 3.5 or above on a 5-scale rating on each parameter, they should go ahead, make a water-tight agreement and sign up for the salon they dream of bringing in The Quartz Mall.