The increase in online shopping and the consequent reduction in comparative trading densities prompted the South African Council of Shopping Centres (SACSC) to commission a new research report by MSCI titled Experiential vs Convenience Malls – Tenant mix driving mall strategy?
The report gives insight into the growth of experiential retail in the local mall marketplace and questions whether large format malls are becoming more experiential, and smaller malls more functional and convenience-focused.
According to the report, which examined the changes in tenant categories over the last 3 to 5 years, South Africa’s weak economic fundamentals and consumer confidence, coupled with high levels of competition, has seen landlords re-examine their tenant mix in order for their malls to remain relevant to its catchment areas.
In its research, MSCI’s analysis classified the 65 unique merchandise categories as either Convenience or Experiential.
- Convenience retailers include service-focused tenants and include retailers of hardware who are focusing their efforts on positioning their centres as convenience destinations in a crowded, competitive market.
- Experiential categories include apparel, food service, health & beauty among others malls larger than 25,000sqm – the latter with an increasing weighting of experiential retail categories.
The report shows that larger retail centres have been placing more emphasis on creating an experiential shopping experience to attract shoppers, lengthen dwell time and differentiate themselves from competing malls located within its catchment area.
“While it is crucial for centres to remain relevant, it is also important for tenant mix shifts to translate into improved trading and investment performance to ensure long-term sustainability,” the report adds.
For more in-depth info on the research report visit Sacsc
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