By: Dr Gad Akwensivie
This article looks at the emergent obsession for Shopping Malls by Ghanaians over the last decade and discusses the trend of the obsession in the light of global developments. DR GAD AKWENSIVIE reviews the Pros & Cons of Shopping Malls and offers valuable advice to retailers and estate developers planning the construction of new Shopping Malls.
For Christmas this year, a large number of Ghanaians will shop from Shopping Malls and not from the traditional market placessuch as Makola market, Kaneshie central market, Takoradi Market Circle, Asafo and Kejetia markets in Kumasi. This is because a growing number of Ghanaians nowadays prefer to buy livelihood items from shopping malls. As a result, our cities are witnessing a re-shaping of their public spaces through the construction of shopping malls.
So, shopping Malls are fast gaining popularity and transforming the lifestyle of our cities. They are springing up everywhere and replacing small shops and the traditional market places and taking the bread out of many small shops.
In Ghana, as we found, Mall shopping is not just an activity to buy livelihood items but a status symbol.
A shopping mall is a group of retail stores in one place, sometimes under one roof. It also could be a large enclosed area in which one or more buildings form a complex of shops containing a variety of stores and restaurants and other business establishments, with inter-connecting walkways that enable customers to walk from one unit to the other.
One of the world’s largest and well patronised malls is the West Edmonton Mall in Edmonton, Alberta – Canada. It has over 800 stores and services, with the largest indoor amusement park, the largest indoor water park, an ice skating palace, an 18-hole miniature golf course, 24 movie theatres and bowling alleys.
Some malls are so large that they are communities. Chicago’s Water Tower place has hotels, restaurants, offices, stores, restaurants, and residential units. Shopping Malls require huge financial outlay and are mostly developed by or in partnership with International Investors.
There are, at least, 7 different types of Malls but only three of them can be found in Ghana. The 7 types are (1) Neighbourhood Shopping Mall/Center, (2) Community Shopping Mall/Center, (3) Regional Shopping Mall/Center,(4) Super-regional Shopping Mall/Center, (5) Fashion/specialty Shopping Mall/Center, (6) Power Shopping Mall/Center, (7) Theme/festival Shopping Mall/Center, and (8) Outlet Shopping Mall/Center.
History of Malls
Shopping malls had their birth in the 1920’s in California, USA where supermarkets anchored and served as a magnet for a strip of smaller stores. The first enclosed mall developed in Minneapolis in 1956 was designed to get shoppers out of the harsh weather, free from bad weather, life, crime, dirt and troubles. They were initially regarded as community centers where people would converge for shopping, cultural activity, and social interaction. Today, however, they have achieved and surpassed those objectives. They are now the retail, social and community centers of their communities; center pieces for rejuvenation of urban centers.
The principal reason for the mania and preference for Shopping Malls in Ghana is the variety shopping malls offer. Shopping malls are avenues to purchase formal, informal and target fashion products all under one roof.
Interestingly, this trend is in contrast with recent developments in some advanced economies such as the United States where some shopping malls have gradually started dying. In these developed economies, the slowing traffic in shopping malls are due to declining in-store purchases and rising on-line shopping for specific livelihood items.
In fact, some recent studies have found that, as much as 30 percent of customers in these advanced economies now make their livelihood purchases on-line. The Wall Street Journal has predicted that about 190 Million United States customers (more than half the population) will shop on-line this year, a wake-up call for mall developers and retailers such as Sears, Macy’s, J.C. Penny, Wal-Mart, Target, etc. The biggest game changer in the retail business in these economies is AMAZON which is slaying its brick and mortar competitors. Amazons e-commerce revenue rose by 15.5 percent in the last 12 months about the same margin as Wal-Mart. But Amazon reported US$82.7 billion in sales compared with US$12.5 billion for Wal-Mart.
A careful analysis of data reveals that the market values of these Malls are diminishing gradually. Colleague real estate Experts in the United States have predicted that, 10-15 percent of Malls will miscarry or will be converted into non-retail space within the next decade or two.
Indeed, online shopping has many advantages. The prices are good and easily compared. It’s convenient. You can do it at home or at work, without burning fuel and fighting to park your car. More than half of online purchases are now delivered free within some states in the U.S. and interestingly many returns are free as well.
The number of online shoppers also increased from 240 million to nearly 500 million and online retail trade increased from US$197.6 billion to US$790.3 billion, representing an average yearly increase of 40 percent.
With these statistics, it is, therefore, not surprising that the average Customer Satisfaction Index scores for online retailers are higher than the average for physical discount and department stores.
Here in Ghana, Shopping Malls/Centers are the new craze despite the fact that, corner shops and the traditional shopping centers still play the key role in the provision of daily livelihood items. Corner shops still dominate in residential areas by far in numbers and accessibility.
However, Accra and Kumasi are beginning to witness a surge in Malls witPhhin the last 5years. In these Shopping Malls/Centers, customers do not have the option of bargaining as the prices of the items are fixed with less chance of price fraudulence. In these large Malls, customers are spoilt with payment options from credit cards, debit cards, Vodafone Cash, Tigo Cash, Airtel Money, MTN mobile money and internet payment systems. This provides added security for customers.
Another added advantage of these Malls is the provision of Safety. These shops have secure parking facilities and fire protection in event that they occur which are not cost effective for a small corner shop. Most of these Modern Shopping Malls have incorporated entertainment, food corners, cinema and children’s playground avenues into their service mix. These encourage parents to visit these facilities to spend recreative time swinging and riding.
The Malls have their down sides though. They tend to occupy large tracts of land some spanning several acres of land. They tend to be congested during evenings, weekends and public holidays with associated traffic jams in their neighborhoods. These do not only create noise but come with pollution of the environments as well.
In addition, most of these Malls tend to be located in urban areas, out of reach of the rural dweller. In vast contrast, most corner shops don’t have variety of items in showcase, though they present customers with better deals. Residents normally establish relationships with local store owners and may have a bargain on price or buy and pay later.
Advice to Property Developers
Location remains key because a strategic location allows easy access, attracts a larger number of customers, and increases potential sales of a retail outlet. At consumer’s shopping decisions are influenced greatly by accessibility of retail locations. The availability of public transportation, nearness to transportation terminals, provision of car parking, convenience for disabled and senior citizens, security standards and information booths. Others are the ambience both peripheral and internal, air-conditioning, lighting, public audio system, recreational places, wide hall ways and shopping space, relaxation benches and amusements areas are key for success.
Retailers may be able to develop a sustainable competitive advantage if they offer and provide creative sales events, product demonstration, in-store advertisement and hands-on experimentation for customers. Retailers must be mindful of customer interaction, customer service and responsiveness to customer needs, quality, variety and availability of new products. Product availability is also key in retaining customers.
A wrong choice in placing a Shopping Mall could mean failure, whereas a good choice, success. Therefore, location ranks amongst the top factors in determining success or failure of Malls. Location offers strategic advantages which competition may find difficult to overcome.
Due to time, the trend is heading toward merging different destinations and purposes in their shopping trips, which is known as cross-shopping. To be successful, developers must make effort to understand customer’s needs, which are in the form of image. Once customers can be predicted it becomes easy to meet their expectations. By maximizing the number of customers mall managers will be achieving their primary objective of a successful mall.
Conclusion: In Ghana, however, the competitive environment that Shopping Malls face is considerably different from that faced in developed countries. Rather than online shopping, a mall in Ghana’s primary competition is likely to be another mall springing up nearby.
The challenges that face estate developers within the context of Shopping Malls is to become more consumer-oriented, in the sense that more attention will need to be paid to the why, when, what, who, where, and how’s of the consumer when considering where to site a Shopping Mall.
For now, we can only expect to see a surge in both the construction and patronage of Shopping Malls in Ghana’s cities. This trend will continue until such a time that, online shopping catches up with the competition which can only take place when we have in place an efficient street naming, and property address system.
The writer is a Landed Property Consultant and an expert in the Valuation of Land and Buildings for Sales or Purchase, Lease, Rental or Letting, Mortgage, Probate, Insurance, Compulsory Acquisition, Rating and Taxation. Telephone: 0244 843 997, Email: email@example.com