The new face of shopping malls: schools, clinics and major events win

You shopping malls are always reinventing themselves. But, with physical stores closed for months because of the pandemic, this renewal trend has accentuated – and now, with the total reopening of commerce, what you can see is the emergence of a new-looking mall.

This revamped face of the projects ranges from changing the mix of stores, including more services, such as restaurants, elementary schools and medical clinics, to leisure spaces for children and pets. A new wave of major events and exhibitions related to artists such as Van Gogh, Renoir, Miró or about the world of disneyfor example, gained strength.

The turnaround of malls also includes heavy investments in technology, such as apps and virtual assistants. The intention is to make life easier for consumers, collect data about customers and bridge the gap between those who want to buy and those who want to sell. And, even with the advancement of online commerce, which allows shopping at a distance, the focus is to bring consumers physically inside the ventures.

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

What is happening today inside the malls, according to Marinho, is the greater representation of the population’s spending pattern, with an increase in the share of services – which account for the largest share of the Gross Domestic Product (GDP). There is also a greater balance in the mix of malls between sectors linked to the purchase of products and entertainment.

A recent study carried out by Multiplan, one of the giants in the shopping mall sector in the country, shows exactly the rearrangement that took place in the last ten years between the segments in the area occupied within 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% decrease in space occupancy compared to the same period. period of 2012. Another segment that shrank was that of articles for the home, with a drop of 2.5% in the period.

On the other hand, operations related to food increased 3.6% in the occupied area. Following are sundries, which include convenience stores, with growth of 2.2%, and services, which today account for almost a quarter of the area, with an increase of 0.2%.

According to Armando d’Almeida Neto, vice president of finance and investor relations at multiplan, malls have always followed the major consumer trends. But he admits that perhaps the changes were “glittering” due to the interruption of work at the height of the pandemic.

Shopping comes out of the name

The executive says that the company’s malls want to be a complete place, which caters not only to those who are going to buy, but who seek convenience, food and entertainment, for example.

A clear sign of these changes came in November last year, when the company opened a new mall in Jacarepaguá, in the west of Rio. Originally, the name of the enterprise would be ParkShoppingJacarepaguá. “We removed the name from the mall, which became ParkJacarepaguá, because we believe that the word did not define the enterprise”, says the vice president.

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

At the height of the pandemic and with the advancement of retail digitalization, Marcos Carvalho, co-president of Ancar Ivanhoe, another important company in the shopping mall sector, recalls that what was heard was that consumers would move away from physical stores and opt for online only. . However, with the cooling of covid-19, this has not been proven, he says.

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

According to him, the mix of the group’s malls has been adjusted a lot to meet the new demands, with spaces for aesthetic clinics, medical clinics and more restaurants, for example. This year, the group’s malls should break the record for selling points of sale. “This shows that the physical store is very important to generate experiences”, he says.

investments in technology

On the other hand, the legacy of accelerated digitalization left by the pandemic has also gained relevance within the company, which is investing tens of millions of reais in technology in malls to make life easier for consumers. The Shopping 5.0 investment package, as the company named it, includes an app, a virtual assistant and a hub with information on the profile of patrons for targeted promotions that lead to increased sales.

Through the app, the public who frequents the group’s malls is informed about events – another pillar of the new times -, such as the exhibition by Renoir, at Shopping Pátio Paulista, which had a record of visitation, or by the Spanish painter Miró, at Shopping Rio Design. Bar, in Rio.

At Shopping Eldorado, managed by Aliansce Sonae, leisure and entertainment are among the main pillars of the business. Mundo Pixar, for example, an exhibition that takes place in the mall about the universe of Disney productions, brought a large flow of customers in months that are usually with fewer visitors, says the mall’s marketing manager, Lilian Piva, without revealing numbers. For store owners, the introduction of new business segments in malls is extremely productive. “The flow of people increases and, by increasing the flow, sales will surely improve”, says the director of institutional relations at the Shopping Shop Owners Association (Alshop), Luis Augusto Ildefonso. He argues that shopkeepers are benefiting from this new consumer who goes to the mall looking for services, which have occupied spaces that were left vacant in the pandemic.

According to the executive, the flow of people in malls has been growing month by month and faster than expected. However, still below the pre-pandemic monthly average, which was 430 million people per month. In July of this year, for example, the flow of visitors to Brazilian malls reached the mark of 397 million.

Flow of people gains space in revenue

One of the challenges of the new mall model is how to monetize this new business, emphasizes consultant Luiz Alberto Marinho, managing partner of Gouvêa Malls. Traditionally, malls lived off revenue from space rentals and the percentage of physical sales. Now, however, the recurring flow of people searching for services also has value for the mall. “The mall will become a media channel, in which advertisers and shopkeepers will have to pay administrators to speak with the customer”, predicts the consultant.

Another crucial point of these changes is that part of the online sale, which today takes place in the physical store, escapes the mall’s billing. It is a change in the mall’s financial model.

The Brazilian Association of Shopping Centers (Abrasce), which brings together shopping mall entrepreneurs, did not respond.

School goes to the mall

In 2020, businesswoman Melissa Fukuda was at the end of the lease contract for the property where the school of which she is a partner and director, Sunrise School, operated. The bilingual elementary school was located on a busy avenue in Osasco, in the Metropolitan Region of São Paulo. Always dealing with problems of boarding and disembarking the children and also with security, she decided not to renew the lease.

“As we were in the middle of the pandemic, a snap came: would malls, with many stores closing, not have a larger space to rent for a school?” Based on this perception, the businesswoman started looking for areas in several projects, but not all of them had vacant spaces with the necessary dimensions. The wedding took place at Continental Shopping, which is in São Paulo, on the border with Osasco.

There existed an area of ​​1,500 square meters, distributed in two floors. “It was a dead space,” says Melissa. In the past, part of the site was occupied by an ice rink and another by a bank branch. In May of last year, the school signed a ten-year lease with the mall. “It is 30% more expensive to be in the mall compared to the street, but it makes up for it with convenience, security, partnerships.”

Investments to make the idle area look like a school, with 14 classrooms and an indoor court, for example, totaled R$ 3 million. In January of this year, the school began to function regularly. It receives 120 students daily, aged between 5 and 12 years old, who are taken by their parents or guardians.

If each parent who takes their child to school enters the mall, at the end of the month there will be 2,400 more people circulating in the enterprise due to the school. It is a recurring flow of people who can consume and expand sales from other operations.

“We already feel a greater flow of people, against other malls”, says Agnério Carvalho, superintendent of Continental Shopping. He considers that the mall also added 30 new operations in the last 16 months, such as Casa Bauducco and Sodiê Doces. The combination of all these factors led to a 10% growth in the flow of people in the enterprise in August compared to the same month in 2019, before the pandemic.

According to the superintendent, Continental, a mall controlled by a family, not linked to large groups and the second oldest in the city of São Paulo, after Iguatemi, has been undergoing a transformation. In addition to the school, in October of last year, the third gym was inaugurated in the enterprise. In December of this year, the first self-sustainable cinema opens its doors.

“Right now, there is a lot of potential when we bring a college, a third academy and a cinema”, he says. This does not mean, according to the Executive, that the mall is no longer having stores. “We want both: stores and services.” But he points out that every service adds a secondary purchase to the mall’s billing – but, at the moment, he says he has no way of measuring this increase.