What: A piece on the evolution of the retailing landscape in India.

Why it is important: Are we about to see a change in paradigm just like what is happening in the US where malls are falling from grace? The arrival of Galeries Lafayette as a European-style, city centre store, will provide an entirely new option to India customers.

Department stores have historically played a significant role in the success of shopping malls by attracting foot traffic and generating revenue. They offer a diverse range of products under one roof and often serve as anchor stores, benefiting both the mall and retailers. These stores have advantages such as offering a wide range of choices, discounts, and loyalty programs that enhance customer appeal.

However, the role of department stores in malls has evolved due to emerging trends like food courts, entertainment centers, and online shopping. They have faced challenges from e-commerce and competing anchor stores like popular fashion brands. During the COVID-19 pandemic, department stores also experienced decreased footfall.

Despite these changes, many experts still consider department stores valuable to malls. They continue to generate foot traffic, revenue, and customer satisfaction. Their significance remains strong, especially in growing markets like India.

The allocation of space to department stores varies among malls. Some malls dedicate around 12-25% of their total retail space to department stores, depending on factors like mall size and layout.

While department stores have traditionally been anchor stores, this trend has shifted in some cases. Theme-driven malls may prioritize high-end boutiques and designer flagship stores as anchor tenants, aligning with their unique identity.

Maintaining a balance with multiple department stores involves strategic tenant selection, diverse offerings, and targeting various demographics. Varying brands, price ranges, and product categories prevent redundancy and contribute to a successful mall experience.

Are department stores still relevant in Indian malls?