schools, clinics and large events get space

Shopping centers are always reinventing themselves. But with brick-and-mortar stores closed for months due to the pandemic, this renovation trend has picked up steam – and now, with the store fully reopening, what you can see is the emergence of a mall with a new face.

This renewed face of the company comes from change of mixture shops, including more service provision, such as restaurants, schools from elementary schools and clinics to recreational areas for children and pets. A new wave of large events and exhibitions related to artists such as Van Gogh, RenoirMiró or about the world Disneyfor example, gained strength.

The upheaval in malls also includes major investments in technology, such as apps and virtual assistants. The intention is to make life easier for consumers, collect customer data and bridge the gap between those who want to buy and those who want to sell. Even with the advancement of online commerce, which enables distance shopping, the focus is on physically bringing consumers into businesses.

“The proposal of a shopping center as a shopping center is being replaced by a community center,” says the consultant Luiz Alberto Marinho, managing partner of Gouvê Malls. He notes that this change, which is global, was happening even before the pandemic, but it accelerated it.

What is happening today inside shopping centers, according to Marinho, is a greater representation of the consumption model of the population, along with progress in the participation of services – which make up the largest share of Gross Domestic Product (GDP). There is also a greater balance in the shopping center mix between the shopping and entertainment sectors.

A recent study conducted by multiplaneof one of the giants in the shopping center sector in the country, shows the realignment that has taken place in the last ten years between the segments in the space occupied by the company’s projects.

Despite still representing the largest share of the gross leasable area (GLA), with 32.7% of the total, in the second quarter of this year, clothing stores had a 3.5% drop in space occupancy compared to the same period in 2012. The segment of home products also decreased, with a drop of 2.5 percent in that period.

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On the other hand, jobs related to food grew by 3.6% in the occupied territory. Small things follow, including grocery stores with a growth of 2.2%, and services, which today occupy almost a quarter of the area with a growth of 0.2%.

Other Armando d’Almeida Neto, Vice President for Finance and Investor Relations at Multiplanshopping centers have always followed major consumer trends. But he admits that the changes may be “flashy” due to work interruptions in the midst of the pandemic.

Pixar World Exhibition, held at Shopping Eldorado, in São Paulo Take photos: Taba Benedicto / Estadão Table of Contents

The purchase comes from the name

The CEO says that the company’s malls want to be a complete place, serving not only those who will shop, but also those who are looking for convenience, food and entertainment, for example.

A clear sign of these changes came last November, when the company opened a new shopping center in Jacarepaguá, west of Rio. Originally the name of the company would be ParkShoppingJacarepaguá. “We removed shopping from the name, which remained Jacarepaguá Parkbecause we believe that this word did not define the company”, says the vice president.

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With 39 thousand square meters (m²) of GLA, the new development has a 6 thousand m² park integrated with a shopping center, an ice rink, an outdoor amphitheater with a 150 m² screen, an amusement park, a pet area, a convention center and restaurants. “Jacarepaguá shows that the mall is not just the shopping paradise it was seen a few decades ago.”

At the peak of the pandemic and with the progress of retail digitalization, Marcos Carvalho, co-president of Ancar Ivanhoe, another important company in the shopping center sector, recalls that it has been heard that consumers will move away from physical stores and opt for online only. However, this has not been proven by the cooling of covid-19, he says.

“Consumers have returned to physical spaces with great force, and shopping centers have added several environments for leisure, entertainment, services and convenience, so that these pleasure experiences can be added to the shopping experience,” explains the CEO.

According to him, the mix of shopping centers of the group has been adapted to the new requirements, with spaces for aesthetic clinics, medical clinics and more restaurants, for example. This year, the group’s shopping centers should break the sales point record. “It shows that the physical store is very important for creating experiences,” he says.

investments in technology

On the other hand, the legacy of accelerated digitization left by the pandemic has also gained importance within the company, which is investing tens of millions of reais in technology in shopping centers to make life easier for consumers. Investment package Purchase 5.0as the company calls it, it includes an app, a virtual assistant and a hub with repeat customer profile information for targeted promotions that lead to increased sales.

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Through the application, the public visiting the group’s shopping centers is informed about events – another pillar of the new era – such as exhibitions Renoiron Shopping Patio Paulistawho had a record of visits, or a Spanish painter Miró, in Shopping Rio Design Barrain the river.

on Shopping Eldorado, managed by Aliansce Sonae, leisure and entertainment are among the main pillars of the business. World Pixarfor example, an exhibition held in a shopping center about space Disneyit brought in a large flow of customers in months that typically have fewer visitors, he says head of marketing in the shopping center, Lilian Piva, without disclosing the numbers. For store owners, the introduction of new business segments in shopping centers is extremely productive. “The flow of people is increasing, and increasing the flow certainly improves sales,” says the director of institutional relations at Shopping Tenants Association (Alshop), Luis Augusto Ildefonso. He argues that retailers are benefiting from this new consumer going to the mall in search of services, which have filled the spaces left vacant by the pandemic.

According to executives, the flow of people in shopping centers is growing month by month and faster than expected. However, still below the monthly average before the pandemic, which was 430 million people per month. In July of this year, for example, the flow of visitors in Brazilian shopping centers reached the mark of 397 million.

The flow of people gains space in revenues

One of the challenges of the new shopping center model is how to monetize this new business, the consultant points out Luiz Alberto Marinho, managing partner of Gouvê Malls. Traditionally, shopping centers have lived off income from space rental and a percentage of physical sales. Now, however, the constant flow of people seeking services also has value for the mall. “The shopping center will become a media channel where advertisers and retailers will have to pay administrators to talk to customers,” predicts the consultant.

Another key point of these changes is that part of the online sales, which today takes place in the physical store, escapes the billing of the shopping center. It is about changing the financial model of the shopping center.

wanted Brazilian Association of Shopping Centers (Abrasce)which gathers entrepreneurs in shopping centers, did not comment.

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FR12 SAO PAULO - SP - 20.09.2022.  - ECONOMY - COLÉGIO SUNRISE SCHOOL - Photo of Sunrise School located inside Continental Shopping.  PHOTO: FELIPE RAU/ESTADAO
FR12 SAO PAULO – SP – 20.09.2022. – ECONOMY – COLÉGIO SUNRISE SCHOOL – Photo of Sunrise School located inside Continental Shopping. PHOTO: FELIPE RAU/ESTADAO Take photos: Felipe Rau/Estadão

The school goes to the mall

In 2020, a business woman Melissa Fukuda was at the expiration of the lease contract for the real estate where the college of which she is a partner and director operated, sunrise school. The bilingual elementary school was located on a busy avenue in Osasco, in the metropolitan region of São Paulo. Always facing the problems of boarding and disembarking children, but also with safety, she decided not to extend the lease.

“Because we were in the middle of a pandemic, the moment arose: wouldn’t the malls, with many stores closing, have more space to rent for the school?” Based on this perception, the entrepreneur started looking for spaces in several projects, but not all of them had free spaces of the required dimensions. The wedding was held with Continental shoppinglocated in São Paulo, on the border with Osaka.

There was a space of 1,500 square meters, spread over two floors. “It was dead space,” says Melissa. In the past, part of the site was occupied by an ice rink, and the other by a bank branch. Last May, the school signed a ten-year lease with the shopping center. “It’s 30% more expensive to be in a mall compared to the high street, but it makes up for it with convenience, security and partnership.”

Investments were added to make the inactive space look like a school, with 14 classrooms and a covered courtyard, for example. 3 million BRL. In January of this year, the school started regular work. Receive daily 120 studentsages 5 to 12, led by parents or guardians.

If every parent who takes a child to school enters a shopping center, at the end of the month, 2,400 more people will circulate in the company because of the school. It’s a constant flow of people who can consume and expand sales from other operations.

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“We already feel a greater flow of people, compared to other shopping centers,” he says Agnério Carvalho, Continental Shopping supervisor. He reckons the mall has also added 30 new operations in the past 16 months, as House of Bauducco and Sodiê Candy. The combination of all these factors led to a 10% increase in the flow of people in the company in August compared to the same month in 2019, before the pandemic.

According to the manager, the Continental, a family-controlled mall that is not affiliated with large groups and is the second oldest in the city of São Paulo, after Iguatemi, is undergoing a transformation. In addition to the school, the third sports hall in the company was officially opened in October last year. In December of this year, the first self-sustaining cinema opens its doors.

“Right now there is great potential when we bring a college, a third academy and a cinema,” he says. This does not mean, according to the Executive Committee, that the center no longer has shops. “We want both: shops and services.” But he points out that each service adds a secondary purchase to the mall’s bill — but, at this point, he says he has no way to measure this increase.

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