Three key concepts of the book "The Biggest Mall in the World"
Author: Sergio Rojas Leyva
Date: 19-05-2022
Shopping centers are spaces that have been transformed over time in accordance with people's new lifestyles, shopping centers today and for many years have been part of everyone's life, are places visited by families, couples, by groups of friends or even by people who just wants to take some time for themselves. Shopping centers are part of the community and allow to generate ties and strengthen the community itself.
They are a place where we can connect, where we can have a cup of coffee or a great dinner in a safe and comfortable place.
Ideal for buying expensive products or to supply the entire pantry, we can watch a movie or a show, we can enjoy our time having a dessert and of course, we can buy the things that we need (and also the things we don't need!).
Many times we can see and even try the product or service before buying it, thing that we can't do with online purchases. Personally, I like to go to shopping malls where are bookstores and cafes, I also find it much more satisfying to try on clothes and shoes and make sure they fit well in me in every way.
The concept of each type of shopping center has its specific function, the book dedicates the chapter "Typologies of retail groupings" to explain in detail the specialization/business and target market for each type of shopping center configuration.
Now, I’ll share three key concepts that I identified in the book The World's Largest Mall, it is worth to point out that the book contemplates and covers more concepts and topics and touches them in depth, I only selected three of them and this is just a brief summary.
Key Concept 1: The 50-yard line.
In the stadiums, the middle line or 50-yard line is the best place to watch the games, besides halftime shows are also held here. The same goes for the mall, the largest amount of people traffic occurs in the central part and depending on how far we move from the central part, the traffic is reduced. Therefore, the premises located in the central part where there is the greatest movement are the most appreciated and the most expensive, this does not mean that other premises such as those located in the entrance halls are not useful, here they can locate turns of services.
Key Concept 2: The artillery of the small merchant.
1. Specialization of the product or service. A business, store, restaurant, office, by itself can differentiate itself and be successful, even if it does not have the support provided by the big shopping center, however, it has other benefits such as exclusivity, comfort and privacy. Ricardo mentions the case of Casa Merlos, a restaurant that offers food from Puebla from the 18th century, or in other words, here we are going to find the finest dishes from Puebla, that is, a unique product with first-class service. Isn't mole one of the most delicious Mexican dishes that exist? “Delicacy of the gods” is how they call it in the extraordinary film “Como Agua para Chocolate”.
2. Convenience, being close to your client and making their life easier. We find Oxxo everywhere in Mexico with the products we need most. I remember the Christmas meme where it is indicated that we just neglected to put the nativity scene “El Nacimiento” and someone already installed an Oxxo on it.
3. Customized attention, offering a superior service experience. Self-service is not characterized by this, however, there are cafeterias or stores where they treat you amazingly, many times they greet you by name, they know your tastes, they genuinely care that you are well attended.
4. Exceed expectations. McDonald's is characterized by being extremely efficient and they deliver your hamburger very quickly and consistently (your Big Mac will be the same at any McDonald's you go to in the same country), however, it is not a gourmet product that has many fine ingredients, meaning that the price-value ratio is adequate. On the other hand, there are other hamburger establishments that effectively distinguish themselves by competing by offering premium or gourmet products, using the best meat and the best ingredients in the preparation of the hamburger, the perception that is obtained is that the money is better spent in a good quality product than on cheaper items.
Key Concept 3: Exposure.
The exposure of the retail premises is not related to accessibility. Exposure means that the window display and canopy must be visible from a reasonable distance that varies depending on the speed of traffic. It is recommended that the premises have a minimum frontage in relation to the area of their fingerprint, for example, for a 50 square meter premises, a suitable frontage will be 4 linear meters, another example will be a 300 square meter premises, a suitable is 11 linear meters.
Extra-Bonus: What is happening today?
E-commerce and online stores such as Mercado Libre or Amazon give us access to endless products at a click distance, in the same way we can consult the necessary information to acquire any service. Covid-19 accelerated the adoption of e-commerce and brands must make an effort to achieve omnichannel and integrate store inventory with digital inventory, all in the same efficient and integrated ecosystem in favor of the consumer.
For the shopping center, a substantial change has been based on improving the experience, in contrast to the Covid-19, self-services and “click and collect” have become a form of delivery preferred by buyers since it reduces the possibility of contagion, which also reduce the time of permanence in the commercial premises.
Landlords must move from being a mere owner of the spaces for being a true business partner. For long time ago there has been a model where the landlord shares the risk (high or low sales) with his tenant in terms of his payment or rent for the use of the space is determined by a percentage of sales and not by a fixed rent, that is, the landlord's payment is determined by the success of the space due to the flow of people that the mall or the location generates, the landlord normally covers his risk by setting a minimum base rent.
In the same way, landlords must strategize together with brands to jointly offer the maximum possible value to customers, in principle understanding and maximizing the value they can offer in person as opposed to what the customer can obtain by buying online. In the same way, landlords must analyze their data to generate the best possible mix of tenants, this mix must complement each other so that the visitor feels attracted to the shopping center.
The face-to-face and digital experience must be combined to differentiate from online shopping, for example, by offering frictionless experiences at checkout.
The question remains whether some commercial premises can become "dark kitchen" or "dark store" in the immediate future, paradoxically, e-commerce, which has a growing share of sales and is leading to the closure of commercial premises, it could be the occupant of those spaces by being operated in a different way and serving mainly online demand or perhaps by fulfilling a complementary and integrated function.
Just to finish.
Ringing the bell after the closing in 2020 of the transaction of more than 11,000 m2 in Molliere 480 for the occupation of a Startup for the sale of second-use cars, which would result in the closing of the most important retail transaction of Colliers Mexico in 2020. From left to right: Sergio Rojas Leyva, Ricardo Sánchez Pie and Roque Obregón. Landlord Rep: Ricardo Sánchez Pie. | Tenant Rep: Sergio Rojas Leyva y Roque Obregón.
It has been shown during the pandemic that large-format malls and community-focused neighborhood and convenience malls are more likely to endure. It was confirmed that the supermarket and services are essential for day-to-day life. The trend towards remote work (home office) encourages greater consumption in neighborhood stores.
The shopping center continues to offer the feeling of security against crime (in Mexico) and in the same way they have the comfort of air-conditioned environment where we can also entertain ourselves.
A book (not only The Biggest Mall in the World, technical or not) in my opinion should not be read only once, it should be reread and studied.
If a book is read only once, it is very likely that what we read and understand is done in a very superficial way.
The World's Largest Mall is a quick read book that contains knowledge acquired during a lifetime of playing the games as an starter.
Ricardo Sanchez Pie probably missed some penalties during his professional career, however, this only makes his experience more relevant because in each setback you learn, besides being in the business for so long, he has won many championships, and this is what he puts in the table with his book. Given the scarcity of literature that exists in Spanish on retail real estate. Ricardo presents us a guide with tools to understand shopping centers, as well as to be successful in locating and installing a space for retail.
Bibliography.
El Mall Más Grande del Mundo. Ricardo Sánchez Pie – Mercado Libre.
El Mall Más Grande del Mundo. Ricardo Sánchez Pie – Amazon y Kindle.
Excelent!!