THE FUTURE OF INDIAN RETAIL IS BEING CRAFTED AT PRESTIGE

The Forum is one of the biggest success stories scripted in the Indian retail scene. Ever since the first Forum opened at Koramangala in Bengaluru, it has blazed an unprecedented trail that revolutionized the entire concept of retail in the country. A few months ago, Prestige, in a strategic decision, divested a substantial part of their holding in their nine operational malls. It was a counter intuitive move that took the entire industry by surprise.

Prestige’s Retail Story 

Prestige came into being in the 1950s as Bengaluru’s premier store for men’s fashion. And it was in this store that the Group’s founders, Mr. Irfan and Mr. Rezwan Razack, cut their business teeth, learning the timeless importance of quality and the eternal art of customer delight from none other than their own father, Mr. Razack Sattar. The business of retail thus is second nature to Prestige and an inexorable living legacy. 

Prestige’s modern retail journey began with the establishment of the Forum in 2004. For most companies that are in the retail or mall space, Forum was just one more asset class that Prestige went into after success in real estate. It wasn’t an extension of business or another way of putting some square footage to use. It was a passion, stemming from the founders to create a purpose designed and built retail space. And that is how Forum came into being.

 The early years were, of course, challenging. Naysayers were everywhere. The market atmosphere was inhospitable if not hostile. Brands were reluctant to come on board. But the team persisted, like the pioneers who built the American West, and through sheer grit, tenacity, innovation and intrepidity, created the biggest success story in modern Indian retail.

However, to Prestige, retail has never been just another asset class. It being in their DNA, they understood the business thoroughly, both the art of satisfying customers and the science of making their experience mutually beneficial. The Forum was thus conceived to be an experience, not merely a place to buy goods (its name itself is telling). After many options were discussed, the Forum was chosen because it signified exactly what the consumers wanted to be, a place where people could

interact and enjoy themselves. Where they could do much more than just shop – watch a movie, catch a meal, have a drink, play a game, network, enjoy live performances, or just hang about… The Forum Koramangala set the template for the modern Indian mall, in what it offered, like the multiplex, the gaming zones, the event arena, as well as its zoning plan, which encouraged the customer to walk the entire mall, giving all stores the chance to be seen and patronized. It also paved the way for the industry by convincing the government to reform regulations, for instance, to permit cinemas on upper floors if they followed all safety regulations. This made multiplexes a reality.

The Forum Koramangala was an instant hit. And Prestige began to replicate its success in other locations chosen strategically.

The divestment plan

Brand Forum had become the toast of the industry and a household word. Then came the Blackstone deal. In one fell swoop, Prestige divested their functional malls.  Muhammad Ali, CEO Retail at Prestige, explains this counterintuitive move, “Every business reaches an inflection point which requires them to rethink their future strategy and transform themselves. This divestment is merely the first step towards such a metamorphosis. We aim to replace the assets we gave up by creating bigger and better ones that are fully aligned with the needs of the retailer and consumer of tomorrow. And the best way to do that is to start afresh – tabula rasa – a clean slate.” So what picture can we expect to see painted on this blank canvas? Says Ali, “We are developing 8 new malls spanning 5 million sqft in Bengaluru, Chennai, Hyderabad and Kochi. A conscious decision has been made to move into Tier 1 cities for better return on investments.” Under a working title of Forum Next, Ali, and team are now working on creating this next generation of malls whose transformative and personalized experience they say will redefine the whole concept of malls in India. 

In scale, design and tenant mix, the new Forum will operate at a different level. While a million square feet is the minimum size they are looking at, the design will be oriented towards offering seamless personalized experiential integration and sustainable practices, and the tenant mix will focus on differentiated offerings. Importantly, Forum will be fully mapped with the paradigm shift in consumer attitudes, expectations and behaviour that has occurred after the pandemic. Technology will play a seminal role and pervasive role in customer interactions. Products will see a larger

proportion of offerings that address sustainability and customization. Elaborating on the rationale behind these strategies, Ali says, “If you look at most malls today, they are dominated by fashion, but this is completely at odds with the needs of today’s customer. The average Indian consumer spends 20% of their disposable income on fashion. However, most malls in India have 80% of their offerings as fashion. There is a complete disconnect between consumers’ requirements and malls’ offerings. Our new malls will not have more than 40% of space dedicated to fashion. We will bring in new products and categories that are more relevant/ interesting for customers.

The Future of Retail 

Trends shaping the future of retail

• Experiential Spaces: The transition of retail spaces had taken off even before the pandemic hit when retailers realized the need to enhance and upgrade their game to keep up with the changing consumer needs and aspirations. Customers today are seeking value that’s beyond monetary worth and one that’s measured through experiences. It is hence, cardinal to reorganize the business principles to design and develop experiential spaces for the progressive consumer lot where the unsaid ask is ‘Experience first, Entertainment next’. 

1. Multi-Dimensional Retail Channels:  The other upside of the pandemic is that customers today are more open than ever before to explore and manipulate omni channel shopping which is forcing a bridge between the traditional brick and mortar and the ecommerce space. This has fuelled a surge in online shopping and in-store and curb side pickups, accelerating a trend towards a hybrid retail model. Stores are adopting high-tech fitting rooms, AR/VR, hospitality lounges, on-site returns, and shipping online orders from brick-and-mortar locations as they bring in-store shopping and e-commerce fulfilment into the same space.
2. Choice Paradox: When customers are spoilt for inexhaustible opportunities to choose from, retailers are burdened with the incessant need to innovate and provide solutions to simply stay ahead of the curve. The success of such business will be in driving brand stickiness by delivering its customers with the products, services and solutions intuitively and not just playing catch up. 
3. Data is the new currency: Data has enabled companies and brands to forge a hyper-personal relationship with consumers, offering curated, tailor-made experiences and recommendations. With the aid of breakthrough technology, using this data, companies have developed accurate products and services to meet the needs of consumers precisely and thus improving their cash flows and revenues. 
4. Purposeful Consumption: Product, diversity, and quality no longer suffice the customers in retail spaces. There is also an increased focus on sustainability and a trend towards localized products and services. Consumers are not longing for a simpler past, but want to be part of a larger, meaningful story – one of social responsibility and a greater balance between people, planet and profit. 

(Source: Capgemini,Research paper –  Future of Retail 2021)

The Great Retail Reboot : Re-imagining the mall of the future 

Technology: Technology driven customer interactions are the other key facet of the new Forum experience. Brand Connections through social media have increasingly gained popularity. Reinventing interactions on virtual platforms and integrating online and offline channels is imperative. 

In an omni-device and omni-channel social/virtual world, it is challenging yet rewarding when brands can connect and engage with consumers, aiding a seamless transition between devices and channels. Automation tools and cutting-edge technology can help connect data across multiple sources and devices to gain a unified view of our customers, enabling us to develop interesting customer insights and convert it into meaningful, empathy-led engagement. Summing up, our campaigns and strategies will be devised scientifically using a data backed approach where the key metrics will revolve around customer centricity and customer lifetime value.

Sustainable Practices: Consumers have now become increasingly aware of human impact on the society and the world at large. Organic and natural produce have taken precedence. Health care and fitness fit into everybody’s busy schedule. Herbal, natural, cruelty free cosmetics and sustainable fashion have become in vogue. From a brand’s perspective, the social purpose one represents outrun all the advertising costs. 

New Age Communication: The new Forum will be integrating the new age retailer and consumers through design and personalized experiences. The new design elements will be more fluid, representing the ever-changing consumer mindset. 

Brand Connections through social media have increasingly gained popularity, post pandemic. Reinventing interactions on virtual platforms integrating online and offline channels is imperative. 

The mall coming up on the site of the erstwhile Rex cinema in Bengaluru is an example where two roads straddle to create the feel of a thoroughfare rather than a closed-ended building. The pavement is designed with a wide entry to give it a seamless feel of being an extension of the pavement. It is called Forum Rex Walk, which signals this fluidity. 

A glimpse of upcoming properties