More than 200 retailers in four leading shopping centres have taken advantage of consulting services provided by an independent advisor since an initiative to help smaller tenants was launched by Old Mutual Properties in November 2002.

The initiative, introduced at Gateway Theatre of Shopping, Umhlanga, has now been replicated at Cavendish Square, Cape Town; Riverside Mall, Nelspruit and Cascades Centre, Pietermaritzburg.

“It will be extended to Menlyn Park Shopping Centre, Pretoria; The Zone@ Rosebank, Johannesburg and Vincent Park Shopping Centre, East London, in 2004,” says Ian Watt, managing director of Old Mutual Properties.

“The interest in the service from smaller traders has been gratifying.  In many instances, they are the characterful fabric of centres.  If the service helps them to perform better, then customers, the centre and the property manager benefit.  It shows a real partnership can be developed between property manager and tenants, in contrast to the conflicts which have captured headlines recently.”

Barry Nesbitt, MD of re:solutions, the independent consultancy providing the service, says only three tenants came forward when the invitation was first offered at Gateway, and a mere 15 attended the launch presentation.

“Since then, we have consulted with 110 Gateway tenants, 50 at Cavendish Square, 33 at Riverside Mall and 19 at Cascades. These consultations are not once-off quick-fixes but rather an on-going process of multiple interactions between the tenant, centre management and the consultant.

“The results include, on the one hand, significant growth in turnover for most tenants and, on the other, a better appreciation by centre management of the challenges that face retailers on a daily basis. The direct and enthusiastic involvement of the centre management to provide on-going support to struggling tenants has been most encouraging.”

Nesbitt says the initiative has been a steep learning curve.  The concept of an external and completely independent advisory service operating in shopping centres is thought to be the first of its kind in the world. As a result, methodologies were built from a zero base since there were no benchmark processes and practices available.

The process, he says, has often been rewarding with small independent retailers, previously struggling to survive, blossoming into profitable businesses and skilled retailers. Personal consultations with the retail specialist, a comprehensive training programme and the availability of a talented network of retail skills allowed small retailers to access resources previously not available to them.

These small traders were critical differentiators in the tenant-mix of shopping centres and, if properly supported, could survive the tough first two years and evolve as a new generation of creditable retail brands.

Nesbitt says that to reinforce the one-on-one personal consultations, six training programmes addressing key retailing issues – brand positioning, product planning / control, selling skills, presentation of product, and  promotional and performance management – have been specifically developed for small / medium-sized tenants in shopping centre formats.

He says that the programmes, designed, developed and conducted by pedigreed retailers, are being rolled out to all centres in the Old Mutual Properties’ portfolio.

“In addition to these advanced, intensive two-day programmes, a one-day introduction to retailing programme will be introduced for first-time tenants and existing tenants with low trading densities. The philosophy of these training methodologies is a significant departure from many traditional retail training programmes run by facilitators who are often not technically competent in the relevant retail disciplines.”

Ian Watt said it was intended in each centre to include a number of delegates chosen from the disadvantaged business community who would benefit from training and be helped to establish themselves as retailers.

Says Nesbitt: “The combined processes of consultations, centre management’s involvement and training initiatives will also result in a reduction of the number of store closures that have significant cost and motivational implications on all parties concerned.”

He says the collective experiences from the initiative have been that most tenant failures relate mainly to a lack of clarity on brand positioning and poor cash flow management (resulting from unfocused product assortments) and not from a lack of education, finance, poor service levels, tough landlords, high rentals and other often quoted reasons.

“Sharpening the focus on these two critical areas upfront has been of substantive benefit to tenants and many have experienced exponential turnover growths as a result of this.”

Mike Rodel, general manager of Gateway Theatre of Shopping, where the initiative was first launched, believes there is more to be done.

“Over and above the improvement in the individual performances of tenants with whom Barry Nesbitt has consulted, the most important outcome of this initiative for centre management is that we have been able to gain a much better insight into the complexities of retail and as a result are better able to work with our tenants for the overall good of the centre.  The improved relationships that have resulted from this initiative between centre management and the tenants have been encouraging.  There is still huge potential for the further development of this project.”

Smaller retailers at the four centres where the consulting service provided by Old Mutual Properties is now available say the benefits include ascertaining how they could grow market share, gaining the tools to manage staff more effectively, to get stockholdings to the right level and to improve cash flow.

Neeraj Lalu, of Code Red at Gateway, hopes property managers will continue to look at innovative ways to ensure the development of a strong generation of independent retailers.

“It is imperative for tenants and landlords to develop relationships that move away from the conventional and often adversarial ‘hands-off relationships’ that were the norm towards win / win relationships that ultimately translate to more satisfied customers.  The programme from its inception to its current offering of training courses has been of irreplaceable value.”

Arshad Moola of Gorima’s Spices in Gateway calls the Old Mutual Properties / re:solutions initiative “ the co-ordination and the bringing together of some very experienced individuals that has been an immensely potent force in educating us.”

re:solutions also stressed that the emphasis of the advisory element is for the tenant to accept tough assessments, to master the basics of retail and to take responsibility for their own destinies.   Mandy Dugmore of The Natural Health Shop in Riverside Mall, Nelspruit, concurs: “Nesbitt’s approach is definitely one of taking steadfast aim, shooting straight and giving me the opportunity to fix my own problems with my own ammunition. It’s the sort of approach which gets results, based on my own effort.”

Nesbitt says Old Mutual Properties’ initiative “represents a courageous break from conventional paradigms of shopping centre management and landlord/tenant relationships.  What has really been encouraging has been the willingness of centre management to engage with tenants to forge relationships and to understand that centre management ultimately is there to serve their real customer – the tenants. 

“We fully accept also that we will have many detractors as we evolve the initiative and as conventional mindsets are challenged; pioneers and revolutionaries always get shot at.”

The initiative has received media recognition in Europe and was chosen as a finalist for a 2003 Maxi Marketing Award under the auspices of the International Council of Shopping Centres, in the category of retailer development.

ends

ISSUED FOR Old Mutual Properties

BY Michael Kerkhoff & Associates

INQUIRIES Ian Watt 021-530-4537

                    Barry Nesbitt 083-290-5790

                    Mike Kerkhoff 021-424-5280