MUTUAL TRANSFORMATION; THE SECOND FUTURE

MUTUAL TRANSFORMATION;THE SECOND FUTURE

RAMIFICATION FOR

RETAIL INDUSTRY - INDIA

Covid Timeline

Retail Impact – India

Emerged Trends During Lockdown

Mutual Transformation; The Second Future 3

04

05

06

Government retains the key bars on air travel, metro rail, malls, gyms and big gatherings.

COVID TIMELINE - INDIA

Timeline

Scenario under Covid

E-commerce companies can deliver essential and non-essential items to all places outside containment zones

Digital services and cloud kitchens continue to operate.Restaurants and hypermarkets across malls remain open for delivery.

01

02

03

Only 7-8% modern retail trade operational while manufacturing industries operate at 20 – 30% capacity causing severe supply chain bottlenecks

Surge in demand for staples across the country. India’s top food and grocery retail chains such as Future Group, More, Reliance Fresh, Spencer’s Retail etc. have reported their highest-ever sales in March.

Jan 30

Mar 11

First confirmed case of coronavirus reported from Kerala

WHO declares coronavirus a pandemic

Mar 15

Number of confirmed cases in India crossed 100 mark.

Mar 16

Shopping malls, theatres, gyms shut as per union govt. orders

Mar 24

Apr 14

First 21-day lockdown announced by PM Modi

Country divided into Red, Orange and Green zone in lockdown phase 2

May 1

May 16

Lockdown extended till May 17

Lockdown continues with certain relaxations.

Sourced from publicly available data

Retailers are building their processes for a surge in e-commerce by creating e-commerce portals, training existing staff, allowing phone orders, hiring more staff for delivery etc.


RETAIL IMPACT -

INDIA

LFL Consumption trends across various categories for July

2020 – March 2021 as compared to July 2019 - March 2020

Overall consumption across all categories is expected to go

down by 15% during July 2020 - Mar 2021 as compared to

July 2019 – Mar 2021

We believe the first category to come back will be Grocery,

electronics & F & B and the worst categories to be hit are

Cinema and fashion.

- 41%Cinema

Entertainment

Home products

Fashion

Departmental store

Electronic

Hypermarket

F & B

- 9%

- 14%

- 27%

2 %

- 17%

1%

- 3%

Source – PPZ data


EMERGED TRENDS DURING LOCKDOWNL o t O f T h e s e T h i n g s A r e H e r e T o S t a y

Virtual CelebrationsSanitization - New Level Digital Trials Offline users went Online Work From Home being embraced

Cloud Kitchens get more prominence

Digital EngagementDigital Wallets Preferred Social Distancing New Norm

Virtual Entertainment5

CHALLENGES

Market Speak

Phases Of Lockdown

Mall Reopening Strategy - India


“Most tenants are looking fora full rental waiver during the lockdown

period and a possible pure revenue share deal until December or for that

matter the entire financial year. This is the only possibility for survival”

Nitin Bansal, Head, Business development MINISO Life style

“ Modern retail is built thoughFinancing Through LRD and that the RBI has

to resolve this Problem with loans to create amodel wherein the moratorium could be extended even to

retail by nine months or a year. If the rent does not come in, these will be called NPAs. Mall owners have to estimate real

damage. Also, waiver with each tenant would have to be worked out with every retailer independently depending on

the size, category and the brand’s requirements.”Amitabh Taneja, Chairman, Shopping centre

association of India ( SCAI )

“The multiplex association ofIndia Has also demanded a relief packagefor the industry in the wake of COVID – 19

outbreak . In a letter to the prime minister, thehave asked for interest free loans for three years with a one

year moratorium to multiplexes immediately to help them tide over the crisis and prevent any kind of default on salaries,

electricity dues, loans, interest payments.”They have also called for exemptions on all taxes- including

GST, Show tax, Local body entertainment taxes, propertytaxes for a year from the date of resumption of

normal cinema operations as also a waiverof minimum demand

MARKET

SPEAK

According to a recent surveydone by NFX for SCAI, approximately 70 per cent

Of Consumers are willing to return to malls within afortnight of their opening up. Shopping priorities might change and preference may be given to essentials, but the activity will

definitely take place. “We also see interest in segments like electronics and beauty, which could attract a large part of the consumers visiting malls after these open up. The fact remains

that there is pent up demand, consumers are looking at ways to release their energy and what better place than malls?

Pushpa Bector , Executive directorof DLF shopping malls

One of the key indicatorsto proceed towards normalcy would be the

reopening of shopping. Keeping in view considerationsfor hygiene, cleanliness and social distancing, malls would be better

placed for providing an environment which is safe and secure for the general public. Malls have the advantage of controlled areas, where

common practices of hygiene can easily be promoted, advertised and enforced. Mall Owners have already put in place common SOPs that have

set higher standards for cleanliness which are designed to minimize risk and enhance safety for customers, staff and associates. Social vibrancy will be

restored only when consumption is kick started and this would have a multiplier effect to the economy as retail is one of the largest

Employers of the formal workforce.Irfan Razack, Chairman and Managing

Director, Prestige Group

“ Property taxes and minimum electricity charges should be waived

for the duration of the lockdown, &

extended interest moratorium & loan relief should be offered to mall owners so

they can support retailers”

Retail Association

" No owner has said that wewill not discuss a way forward on opening

the malls and on reliefs. All the mall owners are saying we do not appreciate cartelisation and we will not discuss on

cartel basis but one to one.”Abhishek Bansal, Executive Director,

Pacific Group

“Organised retail sectoris a major employment generator witha workforce over 12 million employees

nationally. We have collaborated with SCAI to form SOPs and guidelines , that will ensure safe & hygienic

environments for employees, retailers & visitors. Organised retail sector is a vital cog in the economic

machinery & resumption will help catalyse economic recovery & uplift

sentiments. ”Atul Ruia, Chairman, The

Phoenix - mills Ltd.

While some mall ownersInsisted That they don’t see renegotiation of

rentals at this stage, there are others who are of the view that one size fits all strategy such as

waiving off rent for all tenants may not work for all. “we are all in talks with all our tenants. It

should be remembered that malls have an LRD commitment to meet and a large part of the rent

goes into honouring these commitments.” Dalip Sehgal, CEO, Nexus malls.



DEC JAN FEB MAR APR MAY

First Covid case

reported in China

Wuhan under

Lockdown

China gradually reopening

China mall opening rate

60% ( excluding

Hubei )

Majority of restrictions

lifted

Emphasis on take

away forF & B

Retail at average 40% of budgeted sales. F & B approx.

50%

Gyms, leisure centres open Multiplexes

remain closedWuhan Opens

Multiplexes open with

restrictions

First Covid case reported

in the US

9 states have stay at home

orders

White house issues

guidelines to reopen

Gyms , Salons & few other

businesses open in few states

Restaurants open at 25 %

capacity, Businesses at

50% occupancy

Retail & malls opening at 50%

capacity in certain states

Malls open in few other

states

CHINA

USA

First Covid case reported

in India India Lockdown

Hypermarkets remain open in

malls

Nation divided into red, orange and green

zone

Shops/e-commerce dealing with

essential goods open

QSR across malls open for

delivery

Shopping centres may open in

Bangalore & few other cities in

June

INDIA

PHASES OF LOCKDOWNC A S E S T U D I E S

T I M E L I N E

38 days Phase I

25 days Phase I

42 days Phase I



MALL

REOPENING

STRATEGY - INDIA

Phase I(June 2020 – Oct 2020)

Limited Operating hours shall be adhered as per govt. directives

1 person per 75 sft GLA & 50% of staff allowed

Only essential services like hypermarkets, personal care, home furnishing, infant care, Apparel , sports wear & footwear will be opened

F & B allowed for takeaway only Staff training

Phase II(Oct 2020 – Mar 2021)

New Normal (Mar 2021 onwards)

Food courts, F & B outlets, multiplexes & family entertainment centres will become operational as per Covidnorms.

90% occupancy achieved in malls

Festive season would bring customer back

Overall consumption across all categories is expected to go down by 1% during phase 2 of reopening

Health & hygiene Knowledge and awareness Ensuring consumer safety

& security New financial models Evolved tenant mix Digital interaction to avoid

direct contact Omni channel experience Immersive experiences Virtual gaming will take off Fulfillment centres

Ind

ia G

rad

ual

ly R

eo

pe

nin

g

Sho

rt T

erm

Co

min

g B

ack

JUNE 2020

OCT 2020

MAR 2021

POST COVID

READINESS

Customer safety

Customer touchpoints

Customer engagement

Customer behaviour


Staff entry & exit compliancesLoading – unloading

Material movement & vendor guidelines

Food court, kitchen, staff & countersMedical checkups

Customer movement

RETAILER

Entry, exit & parkingSocial distancing guidelines

Washrooms Movement in common areas

CUSTOMER

Revised mall timingsFunctional teamFinancial compliances & guidelinesParkingCommunication strategy

MALL REOPENING

Engineering – HVACHousekeeping equipments & tools

BOH

SECURITY

General safety instructions Special response team Personal protective equipments

Emergency preparedness

CUSTOMER SAFETY

E x i t P l a n / S O P

Standard Operating Procedure (SOP) or Exit plans are required to provide a sound strategy in shopping mall by describing the procedures to follow for resuming businessesand work post lockdown due to COVID 19 pandemic outbreak to ensure customer safety.


Sanitizing Touchpoints

Sanitizing Vehicles

Social Distancing Signages

CUSTOMER TOUCHPOINTS

Brand Promotion

Brand name

Floor Games For Queues To Make

It More Playful.

I AM NOT A SHOPAHOLIC

I AM HELPING THE ECONOMY

“Let’s make it more fun !”


MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY SUNDAY

Doctors on Covid19 & precautions

Thanks to Covidfighters & safety measures

1 2

CUSTOMER ENGAGEMENT

We have converted our mall experiences to go fully digital to engage with the customer 5 times a day !

Quarantine cooking sessions

3 4

Virtual entertainment –meet flubber

Life hacks, Quarantine lively series

5 6Styling sessions Hustling moms

& work from home

The Yoga way Magic masterclass

8 9 10 117

12 15 16 17 1813 14Hyper local experience

Get ripped masterclass

Digital live sessions

Mental health sessions

The big day sale

Feel the music

19 22 23 24 2520 21Performances by artists

Make up tutorials

Learn Something new

Hyper local experience

26 29 3027 28Education based sessions

City wide big consolidated online / offline sales

Community evangelist & category influencers

The celebrity cat live


CUSTOMER BEHAVIOUR

Prefer self service for ordering , purchasing & bagging

Decrease in repurchase propensity

Invest in comfortable clothing

Avoid touching & feeling products

May buy without trial

Reduce time spent at the store

Adoption OfE-commerce

Avoid Crowding

Fear Of Being Infected

Digital Adoption

Lower Disposable Income

Prefer Local Brands

NEW DAWN OF

RETAIL

Emerging Trends Post Lockdown

Strategy – New Financial Model

New Normal


EMERGING TRENDS POST LOCKDOWN

High conversion shopping rate

Real shoppers

Impact Impact

Omni channel for topline generation

Impact

Technology based platforms for purchase

Restricted operational

hours

Creating operational efficiency

Mobile food courts

Digital ordering & multiple pickup points

Sanitizing touchpoints

Ensuring safety of the customers

Reduced store sizes

Lower occupancy cost for retailers

New customer engagement

strategies

Digital marketing & virtual entertainment

Reduced seating capacities at multiplexes ,

FEC and restaurants

Being sustainable at 30% occupancy

Trend Trend

Financial institutions

Moratorium for 6 months

Regularizing debt from

April 2021 onwards

Restructuring debt as

per ballooning effect

for FY 2020-2021

Retailers

During lockdown partial

rent amortized over 12

months

2nd Phase(Oct-Mar): Regularizing

financial structure impacting retailers

& Mall owners 25-30%

1st Phase (Jul - Sep):

combination of

Revenue share & partial

rent

%

NEW FINANCIAL

STRATEGY

17


NEW NORMAL

Engaging Conversations

Convenience & Comfort

Creating Safe Environment

The most important thing is inculcating confidence in consumers that malls are a safe place to go out for shopping. Consumer confidence can be brought back by creating a safe and secure environment , keeping convenience & comfort on priority while

creating engaging experience.

Backend & frontend sanitization Sanitization & hygiene protocols for customers Social distancing protocols Crowd management protocols Mechanical sanitization Customer and staff circulation protocol Contactless circulation experience

Digital Marketing Virtual Entertainment Digital shopping Digital community services Creating digital homefluencers

Directional Signages F & B ordered & delivered

within & outside the mall Shopping delivered home Contactless shopping &

payments Tech based appointments to

visit malls / stores Virtual mall platform to

engage with customers


“The future depends on what you do today”- Mahatma Gandhi

Report prepared by

Credits

Najeeb KunilCEO & BOARD MEMBER

[email protected]

Sonal ShrivastavDirector, AUD & DD

[email protected]

Noel VessaokerDirector, AUM

[email protected]

Kunj ThakerAGM BD & Strategy

[email protected]

Pallavi KukdolkarMarket Research and Business Analyst

[email protected]

THANK YOU

www.ppz.co.in

[email protected]

+022 4066 4600

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