While mall occupancy levels and foot traffic have decreased in some malls, other malls have experienced excellent growth over the six months to December. So what does this mean for brands? Brands need to be where the consumers are and what better place than the mall environment. John Faia: GM of Mall Ads™ unpacks the status quo.
South Africa has a strong mall culture. You only need to look around to notice exciting new malls cropping up all over. In recent months we have seen the extension of Menlyn Park Shopping Centre, the opening of Menlyn Maine in Pretoria East and recent redevelopment of EastPoint shopping centre.
While the trading densities of some malls are under increased pressure, particularly those faced with new competition, many centres reported a spike in sales in November on the back of successful Black Friday campaigns and inflation-beating dividend growth for their December reporting periods. Trends in the mall environment are showing that consumers are chasing sales and specials, in my opinion more now than ever before. What this reinforces is that consumers respond extremely well to advertising. And part of what makes them buy one product over another is the advertising that speaks to them inside the mall environment. It is here that they are in a purchasing frame of mind. They’ve taken the time and the effort to get to the mall, now they want to spend the money that’s in their wallet.
Furthermore, everything about a mall is conducive to spending and feeling good while doing it. There is usually a taxi rank in the mall precinct or nearby, there is a safe place to park your car, inside it is secure, clean and the air-conditioning provides a welcome respite from the summer heat. Consumers are receptive to brand messaging, because they want to take advantage of the sale or desire the novelty of something new, hip and on-trend, be it a new flavoured water or sports shoe.
Malls are the perfect environment for brands to start or continue a conversation with the consumer. It is here, close to point of purchase, where brands either lose, keep or win consumers. And in order to keep already loyal consumers and win over new ones, your brand and your messaging needs to be in their face. Out of Home is the last window of opportunity to engage consumers on the path to purchase, that’s the bottom line.
So while some malls are experiencing difficult trading conditions, people in South Africa are still visiting malls, they’re still shopping and they’re still spending. Take, for example, convenience centres that cater to daily shopping needs. Many of these shoppers are dependent on social grants and are usually debt-free. They haven’t experienced the same pressure on disposable income as middle and higher-income consumers, so their spending patterns stay the same. The record numbers over December at Umlazi Mega City owned by SA Corporate Real Estate Fund (and managed by Broll) is testament to this. Furthermore, the recent non-GLA agreement between SA Corporate Real Estate Fund and Mall Ads™ shows that landlords are focusing on alternative income opportunities.
So how does a brand stand out in a mall environment and grab a larger portion of shopper spend? By advertising. Simple. What becomes more complex is creating a campaign that is slick, fits seamlessly with the mindset of the target consumer and is memorable. Mall advertising is not what it used to be and a larger portion of marketing budget needs to sit within mall advertising for a campaign to translate to sales. Consumers are more savvy, more critical and expect a lot more from brands. They also want novelty and innovation. They want to have fun and have an emotional connection with a brand. This is where Mall Ads™ is able to provide bespoke solutions.
The long term reality is that the consumer base is growing, in Africa and by default South Africa, and one of the key driving factors is continued urbanization levels. According to the PwC Retail in Africa 2017 report, the continent is the most rapidly urbanizing region in the world, with urbanization levels set to increase to 56% in 2030 from 35% in 2010. If we look specifically at the South African context, the report shows that Johannesburg is set to grow by 45% over the same period, to a total of 11,5m people.
This can only be good for retailers and malls in general. More foot traffic, more spend and more opportunity for brands to touch consumers.