Is your mall meeting community needs?

Second tier economies in rural and township areas offer plum opportunities for shopping centres because of saturation in traditional upmarket areas.

Today, surrounding communities are very involved in the building of new shopping centres and this trend continues throughout the life span of the centre.

Centre owners need to be aware that the way shopping centres are managed in second tier economy areas is different, says Mark Souris, managing director of Periscopic, a retail and commercial property management company.

Souris says in the '90s, shopping centres built in second tier economy areas were constructed without input from the surrounding communities, thus resulting in vandalism or general boycotts of the centre.

Today, surrounding communities are very involved in the building of new shopping centres and this trend continues throughout the life span of the centre.

“A strong community involvement will help in your centre’s success but it is management intensive.”

He explains that the most crucial factor is a good community liaison officer who is the centre’s face in the community.

A good community liaison officer is able to glean information from the community be it rural or a township through continuous interaction.

Centre management also needs to market their stores to the surrounding community to further facilitate and create trust within that particular community.

It is critical that shopping centres improve the surrounding infrastructure and positively facilitate informal traders.

All business environments are dynamic and subject to change but what makes a successful entrepreneur is the ability to predict and adapt positively to such change, he says.

As an example, he says Jabulani Shopping Centre, one of the larger centres in Soweto has a retail potential estimated at R615 million.

The centre’s popularity has changed driving and walking habits of the surrounding communities and now there are new roads where hundreds of informal traders have sprung up to take advantage of the passing foot traffic.

Other shopping centres that have had similar effects on their communities are Diepsloot Mall, Pan African in Alexandra and Phumulani Mall in Tembisa.

Not only do these new centres change traffic flow and shopping trends they can also be a catalyst for further new residential developments in these areas, says Souris.

There has often been speculation that these centres have a negative effect on local businesses, but Souris disagrees.

“Local businesses that offer perishable goods generally maintain their businesses and value add for consumers and continue to prosper because they offer convenience and are in prime locations suitable for walking.”

Investors and retailers need to be aware that while the average spend per head might be lower in these areas, there are higher numbers of potential shoppers that exceed traditional market spend.

He adds that consumers in second tier economies are just as brand savvy and want to shop where they receive not only value for money, but also seek service and a fulfilling shopping experience, but not at the expense of their community.

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