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Growing Influence of Shopping Malls over Open Market

15 Mar 2013

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 Shopping Mall


Following the opening of more departmental stores across the country, the market is experiencing a new purchasing trend as large numbers of consumers seem to prefer malls to open market, Raheem Akingbolu writes

When Ikeja City Mall was established in Lagos a year ago, there were negative reactions in a few quarters that the environment might not be sophisticated enough to appreciate such an initiative.
But barely a month after it began operation, the impression changed as the mall suddenly became a Mecca of sort for shoppers. Reports from Ilorin, Kwara State, where a mall was recently inaugurated, indicated that Shoprite, a major tenant in the mall, now realises about N100 million on a daily basis.

This is not different from what the operators of similar shopping malls in Enugu, Port Harcourt and Calabar are experiencing on daily basis. In fact, a report, early this week on the investment opportunities in the retail segment of the Nigerian real estate market, revealed that a survey carried out in just one million households within eight kilometres radius of the Ikeja City Mall spent N18 billion on shopping. 

If not any reason, the strategic location of Lagos and its population has boosted the fortune of the malls located in the commercial city. Aside the Ikeja Mall, which is currently making waves, there are malls in Surulere and Lekki. There are also big departmental stores like Just-rite at Abule Egba area, Pack ‘N’ Shop and others that are competing with the existing malls.

Advantages
Beyond the shopping opportunities these malls offer, it is believed that they have positive impact on job creations and taxes, especially in Lagos where the state is doing everything possible to make sure residents imbibe the culture of paying tax. 
Mr. Akin Oluwadare Jnr. a branch manager in one of the commercial banks in Lagos, told THISDAY on Monday at the Ikeja City Mall that he chose to be visiting the mall because it gave him a one-stop shop experience.

“Much as I don’t have anything against the open market or small shops around, I still have preference for the mall because of the various opportunities it offers. It makes shopping convenient, provides a one-stop shop opportunity and you can be sure that you are not buying fake products – at least compared to the experience in the open market, where operators can easily buy cheap counterfeit  goods and sell to unsuspecting consumers,”

Speaking on the rationale behind the establishment of Ikeja Shopping Mall, the Centre Manager, Norman Sander, said it was inaugurated over a year ago to offer Ikeja and its environs unique shopping experience. According to him, the Mall, valued at over N16 billion, combines shopping with fun and offers a time out for the whole family.
Sander, who claimed that consumer traffic has grown by more than 25 per cent, stated that the idea was to replicate the type of malls shoppers see in other major economies.
Explaining why he thinks more Nigerians are keying into shopping in malls, he gave convenience as a major factor.

“Nigerians are busy just as other people in the world with limited time to shop in the traditional market, which have very short time to open. But malls close very late and families can shop in the evening and bring their families for a meal or movie. It is about comfort, convenience and security. In malls, shopping can be done under one roof,” he stated.

Promotions
As part of the moves to make the mall consumer friendly, the centre recently embarked on promotions among shoppers. Reacting to this, he said: “We want to boost loyalty to the Ikeja City Mall brand. We want consumers to recognise the brand and to come here for their shopping experience. This year, we are building loyalty.”

For the promos, shoppers were encouraged to make purchases from any store in the mall, and then wrote their names and numbers behind the receipt before dropping them into drop off boxes, strategically positioned in the mall. Through a draw, the winners were selected. The 10 winners were treated to a candlelight dinner for two (winner and spouse).
Another leg of such initiative was the recently-concluded Scavenger Hunt, another promo that was keenly contested through which consumers were also encouraged to drop as many entries as they wanted to stand a better chance of winning. The contest involved locating and identifying letters from shops in the mall which spell ‘Ikeja City Mall.’ First winner was rewarded with N100,000 shopping, while other nine contestants got consolation prizes.

Competitive Edge and Price
On the belief that prices of goods in shopping malls are higher, the centre manager disagreed, arguing that if retailers in the shopping malls increase their prices, they would suffer the consequences.
He said; “Pricing is the sole job of the retailer. They need to know the market and the right competitive price; otherwise, they would not be selling. Certainly, I think some of the merchandise might be a bit high in terms of price. The retailers are ready to make a margin, and to encourage people visit the mall again and again. If shoppers know they can get something cheaper at the mall, they decide to make a trip.

“But in fairness, they better get the prices right, otherwise they will fail. It is not all the time that the prices are competitive compared with traditional market. Some goods are competitive while some are not. It is left to individual retailers to decide how they want to manage the pricing.”

According to Sander, the Ikeja City Mall, which comprises 27,000 square metres of gross built area and 23,000 square metres of let-able area and accommodates about 100 shops, including Shoprite’s latest generation store of over 4,400 square metres, offers unique experience. It offers a large variety of goods and merchandising, though I have not done a study of the market but that is the feeling I get from the market.

“The Mall is a community centre with 22,000 square metres. People are not prepared to drive hundreds of kilometres to do their shopping. You can do that in UK because the roads are good but in some other places, consumers are not prepared to do that.”
Looking at the future, the centre manager sees a number of people who are going to London to shop changing their minds to shop at the nation’s shopping malls; “I see the growing middle class showing more loyalty to malls in Nigeria.
 
Cashless and Online Shopping
In line with the cashless policy instituted by the Central Bank of Nigeria (CBN), Sander said management of the mall had been asked to support the policy. In response to this, he indicated that store owners have been encouraged to make use of the point of sale. He however stated that online shopping has not been fully implemented because of its peculiarities. 
According to him: “In line with the cashless policy, and in our bid to encourage people who will not like to carry large sums around, we have also provided many ATM machines to make shopping stress-free. As regards online shopping, it has not actually been bad for shopping malls at all but there are certain things we go to the mall to buy. For instance, I won’t buy a cloth online because I want to touch, feel and see what I am buying.”

Resentment
But despite its advantages, there is resentment among people who have their shops around the malls, who have started complaining that the mall’s existence is killing their businesses.
A store owner in Abule Egba, Mallam Isa Ayuba, lamented when THISDAY visited his small kiosk that patronage has suddenly dropped in his shop after the establishment of Justrite in the area.
Forty-three year old Ngozi Okpara, a mother of four, who sold provisions along Awolowo Way, Ikeja also, faulted the establishment of Ikeja City Mall.

“The same way government frustrated the commercial motorcyclists, it has dealt us a terrible blow with the establishment of the shopping mall in Ikeja, forgetting that small shops engage more hands and feed more mouths than the departmental stores. Because of the attitude of our people to prove class, many now prefer to go to Shoprite to buy just a Gala,” she stated.  

Tags: Business, Featured, Market, Nigeria, Shopping Malls

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