Retail tenant survival – getting feet through the door
Consensus a year ago was that South Africa would be slowly on the road to recovery after the recent recession.
Whilst this may be technically correct, it certainly does not seem to be occurring on the ground and a general pessimism seems to be creeping into retailers thinking, with all the focus being on the financial crisis in Europe and America and the possible impact that it may have in South Africa.
“Consumers have become increasingly price conscious and are holding onto their hard earned money tighter than before,” explains Marc Edwards, Managing Director of Spire Property Management. “Because of this many retail stores are struggling and we are seeing a number of our independent retailers asking for rent reductions and/or closing down.”
Gone are the days where increased mall foot traffic equalled increased sales. In this recessionary environment tenants need to do everything possible to get more feet into their shop and to convert those feet to sales.
Survival advice for retail tenants
Edwards, who deals with many retail tenants throughout Spire’s national retail property portfolio, offers some advice for improved earnings and survival in tough conditions.
“Customers are cognisant of the economic uncertainty in the world and are accordingly cautious with their purchases so it takes hard work to have shoppers spend their money in your store. Mall foot traffic may still be up but people are spending less per visit. Passion and service sell and therefore owners of independent stores should ensure they are consistently training and monitoring their staff to ensure that their merchandise is being passionately presented and sold to customers.”
“If a mall shopper walks past your shop front and doesn’t look at it, you have failed,” warns Edwards. “Shop fronts must be visually appealing with specific attention paid to lighting. Displays must be constantly changed – at least once a week.”
“Another good tip is that people, being increasingly price conscious, will often not come into a retail store if they do not believe they can afford the items in that shop and so therefore the lower priced items in shops need to be clearly displayed in order to attract shoppers.”
“Additional ideas are for shops to add flattering and mood enhancing lighting as well as attractive smells – things that make the shop appealing and different to the norm.”
Good news for independent retailers
However – it is not all doom and gloom for independent “boutique” retailers, advises Edwards, who states that South African consumers have become increasingly bored with the uniform, large chain stores that are present in most of the countries retail centres. “By and large the same blue print has been rolled out over and over in many malls.”
“The smaller independent stores are often the first to feel the pinch in recessionary conditions– however, consumers are increasingly looking for something different, a more personalised experience - and this offers the smaller boutique stores an opportunity to grow by tailoring their products and services accordingly.
However, it is not just up to the store owner. These days, more than ever, owners, tenants and property managers need to work together to find ways to make the centre more attractive and ensure that shoppers needs are properly met.
“With conscious effort, passion and enthusiasm, independent retail stores can become, and remain, successful businesses that not only attract feet through the door but also convert these feet to sales – ensuring a thriving, profitable business which rewards the shop owners and contributes to the shopping centre as a whole,” concludes Edwards.
