In late September, South Africa is set to get its latest big shopping mall. Once complete, the Madombidzha Mall, located in Makado in Limpopo, will have a 9,200m2 footprint and more than 40 tenants. It will also add to the more than 3,050 shopping malls currently serving local consumers. With several prominent properties in financial trouble, including the country’s largest, the question that all South African mall developers should ask themselves is whether shopping malls are truly being developed for the communities they services.
While vacancy rates have improved this year, there are still significant issues. Despite increases in foot traffic, for instance, spending remains flat on the back of inflation, high fuel prices, and a weak rand.
It is important to remember that, just because a mall is surviving, it doesn’t mean that it’s thriving or is operating at anywhere near its full potential. It also doesn’t mean that it’s serving the community where it’s located in ways that are ethical, sustainable, and productive. That, in turn, begs the question: how should shopping malls be designed to be spaces that serve the communities that they exist in?
On-the-ground realities
Key to ensuring that malls, irrespective of size, benefit communities, are owners who are in touch with and aware of what is happening on the ground. Shopping mall owners play a vital role in creating a working and living ecosystem for a functional shopping mall with lots of foot traffic and rent paid on time.
Part of that means understanding that malls are no longer just places for shopping. For millions of South Africans, they are important “third places”, where they safely socialise or spend quality time with family.
But they could be much more than that too. What if malls took a leaf out of the books of mixed-use property developers and included the creation of features such as sporting facilities, health care centres, pet-friendly spaces, conference rooms, and working spaces for hybrid workers?
For inspiration on this front, in the US, mall owners have had to adapt to changing community needs or face extinction. Some have enhanced their leisure options by installing pickleball courts or indoor miniature golf courses. Others have sought to enhance their food court offerings by bringing local or regional chains in addition to the national mega-chains. Still others have brought in car dealerships, making it easy for people to test-drive vehicles in between shopping.
Such changes would go a long way to ensuring that our shopping malls become destination venues and social hubs where friends and families meet up for numerous reasons and not just for shopping. The inclusion of a variety of services at our shopping malls could increase the time that people spend at the malls, which can translate into more purchases and revenue.
Thinking outside the box
Beyond ensuring that malls can cater to the full range of community needs, malls could also bring in more foot traffic by embracing innovation. Several South African malls have already embraced pop-up stores, which give consumers exposure to new retail offerings without placing long-term commitments on retailers. Mall owners could combine effectively serving the community with the excitement of pop-up stores by spotlighting community brands in their pop-up stores.
This kind of approach has other benefits too. If any of those community brands take off as a result of being featured in a pop-up store, they may become full-time tenants of the mall in the long run.
Another area where malls can innovate is power generation. While there’s been no load shedding for several months now, the country’s grid is still heavily constrained, meaning that it could easily return. Investing in alternative energy generation not only ensures that people can keep shopping if load shedding does return but it also means that they could become net suppliers of electricity, particularly as South Africa’s grid opens up to more competition.
The stores at these shopping malls can also play a role by improving their in-store shopping experience, by providing exceptional services to their customers at all times. When customers feel appreciated and like the overall experience of transacting with your business, they frequently return for more. Nowadays people are impatient as they face a lot of challenges in their careers and at home, therefore, it is imperative to make every step of the customer journey easy, appreciated, and uncomplicated.
Operating in the right legal frameworks
Some of these changes can be made easily. Others require a little more measured and considered approach, particularly when it comes to ensuring that they’re made in legally and regulatorily compliant ways.
From a legal and regulatory perspective, having frameworks and plans in place to ensure not only sustainable development, but adaptive and productive development that promotes a space to support and entertain surrounding communities is important, and, more importantly, a step in the right direction to ensure the success of not only the shopping malls, but of the businesses in it.
Protecting the future of physical retail
Finally, it’s worth remembering that ecommerce is playing an ever-growing role in South Africa’s retail sector. While ecommerce currently represents just six percent of total retail sales in South Africa, that number will keep growing and physical retailers will have to adapt to that.
That means that they can no longer just build a mall and work to attract the kind of shops that most people buy from most of the time. Instead, owners must understand the development of infrastructure in South Africa, the South African landscape and the needs of the South African people, and that they need to be at the front and centre of their establishments to avoid having an empty mall.
- Kagiso Mahlangu – Director, Head of Real Estate and Conveyancing and Nomaswazi Nkabinde – Associate, Real Estate and Conveyancing, CMS South Africa
