Noida market loses footfall to new mall

Will large malls finish small retailers? While the debate goes on in academic circles, a visit to Noida in the suburbs of Delhi settles the issue.

Once quite the bustling shopping square drawing hordes of people, the Sector 18 market in Noida now watches shoppers making a beeline across the street. It has for its immediate neighbour the largest mall in town "" The Great India Place (GIP) "" casting a halo the market would love to wish away.

Since the GIP opened shop, footfall in the market has plummeted by as much as 60 per cent (as estimated by the store owners).

Industry experts feel that while the concerns of decreasing footfall and its effect on sales are here to stay, it is possible to salvage some of the damage because consumption power is on the rise.

However, the absence of an active market association, and hence a concerted effort, promises to make the going tough.

Efforts are being made by the individual stores to win back customers by resorting to rebates or increasing the product range. Most of the shops are seen flaunting 'on sale' boards more often.

With a store full of shoppers made curious by the ongoing sale, Anand Goel, store manager of Cottons by Century, says that there has been a marked difference since the GIP's advent, with a 40 per cent decrease in footfall.

To shore up sales, the company plans to step up its advertising and offer swipe cards by tying up with banks to let customers avail of discounts at restaurants, much like the loyalty bonus offered by the anchor stores in malls. Increasing the product range by introducing a women's line is also on its radar.

Beon, the company outlet for Action shoes (and a part of Action Retail Venture), bang opposite the GIP, has seen sales dip by almost half. Umesh Sharma, the store manager, informs that the company has lined up discount schemes, promotional SMSes (it sends thousands of them), gift coupons and frequent ads in a bid to lift dipping sales. But "the future lies in the malls", Sharma says.

The management of Home (C&R Textiles Pvt Ltd), a home decor store in the market, is set to introduce promotional schemes, such as bundle offers and free gifts, with purchases.

Paul Shoes, a local chain of footwear, with shops at South Extension in New Delhi and the Sector 18 market, found the first couple of months hard with a decline in both footfall and sales. However, according to Sachin Mahajan, the store owner, it didn't take long for the regular customers to return.

"The smaller shops make you feel at home, while for the stores in a mall or a hypermarket you are just one of the numerous customers," says an expert. Stores like Vijay Sales in Mumbai, Kurta and Saree Stores in Kolkata or a traditional jewellery store typify the personalised treatment and astute product knowledge that staff of the organised retail stores lack.

But good customer relations and discounts are not proving sufficient for these shopkeepers. The notion that malls are only for window-shopping owing to a steep price range is fast evaporating.

Sharma of Beon says, "There had to be a decrease in our sales if people can buy a pair of shoes for Rs 500 elsewhere", referring to prices that companies are struggling to match without the supply chain efficiencies of a hypermarket.

Being a million square feet destination, the GIP has the hypermarket, Big Bazaar, to net even the budget shoppers besides luxury and mid-range brands. The allure of an all-under-one-roof experience of both shopping and window-shopping can be very strong.

If not spend, the spanking displays and air-conditioned interiors of the mall ensure that weekenders flock to it if only to amble around, slashing the walk-in numbers in the market.

Store managers, such as Ritesh Gupta (at the Levis outlet in the market), are only too aware of the losses as "walk-ins are necessary to convert new customers and expand the customer base". Gupta has suffered a 30 per cent slump in sales, with a Levis' store, like most of the brands in the market, present in the GIP as well.

The market's ambience too doesn't help, fraught with an open sewerage and roads choking with haphazard traffic that double as pedestrian walkways.

Azam Khan, manager of the United Colours of Benetton store, adds: "The shoddy drainage systems and the nagging power shortages are the biggest problems in this area. We have to pay separately to clean the drains".

Other store owners put the blame of the market's depleting visitors squarely on the lack of solidarity among the members.

A manager of a branded apparel store, who doesn't want to be named, rues: "There is an utter lack of a collective effort to improve the surroundings. There is an association which couldn't care less. What chance does the place have with a feeble light here and there compared to the dazzling interiors of a mall?"

"The Noida Development Authority doesn't do much either," adds another store manager. The market has witnessed quite a few attempts at ordering the traffic by the local police but in vain.

It is perhaps the lack of concerted effort that is proving the undoing of the shops in this popular market. An active trader's association would not only have heard the shop-owners' grouses about a drab surrounding, but could have drawn strength from numbers.

Pinakiranjan Mishra, partner (retail and consumer products practice), Ernst & Young, says, "A market association can help shops to collectively communicate promotional offers and schemes to consumers as it might be difficult for the shops to bear individual advertising costs." A cooperative stand could also help bring in supply chain efficiencies for the shops by combining transport loads and reverse logistics.

Caught in the catchment areas of some very large malls (DLF's Town Square is coming up next door), the Sector 18 market has to think on its toes. Its personalised customer servicing can create a distinct positioning while a concerted effort at consolidating the shops' supply chains and marketing efforts can provide the proverbial boost.