Brands define the lifestyle of most individuals, and with higher disposable incomes Indians want their Puma, Nautica and Louis Vitton products in their cities. Retail is now a booming industry in the Indian economy where the market in South India alone is valued at Rs 2,62,930 crore (in 2006). Of this, the size of the organized retail market in 2006 stood at Rs 12,825 crore, comprising 4.9 per cent of the total retailing market.

With this huge market, retail infrastructure too is gaining momentum in the real estate space today. However, malls are not the only way for brands, but flagship stores on high streets are among the desired retail formats too. In Bangalore, the retail storm is even heading the suburban localities like Jayanagar, Koramangala and Indiranagar, away from its Central Business Districts (CBDs) areas.

Now, residents of these areas don’t have to trudge through traffic and shop in Brigade Road and Commercial Street but get products from their favourite brands in their locality itself. Retailers are targeting the brand conscious yuppies of the city, by bringing their favourite brand in their neighbourhood. Brands like Nike, Adidas, United Colours of Benneton, FabIndia, Crossword, Puma and Samsonite have hit the suburban areas.

Humble streets like 100 ft road in Indiranagar, Lavelle road, 11th main in Jayanagar 4th block and 80 ft road in Koramangala, Marthahalli have now overhauled into high streets with branded stores whose mannequins scream out the latest fashion in apparel, accessories, footwear, leather goods and sporting wear.

A few old bungalows in these streets have also been converted into chic boutiques which offer them thousands of sq feet to flaunt all their merchandise. “The disposable incomes are rising across the community. Retailers are targeting this group and entering newer areas besides established high-streets,” says Vikram Rajaram, Executive Director (South), Knight Frank India.

Lifestyle dictates
Affordability has increased  with higher incomes, where everyone wants the latest in apparel, accessories and electronic goods.

According to South India Retail & Realty Report, Fashion is the largest category in the organised retail segment, valued at Rs 4,665 crore comprising 19 per cent of the  market share in South India.

Targeting these brand-conscious consumers, retailer are opening stores closer to residential colonies. “We are looking at more exclusive stores specifically in Commercial Street, Indiranagar, Banashankari, J.P Nagar, Whitefield, Malleshwaram to cater to a great target audience which is growing,” says Sanjay Chandrashekar, VP, Crocodile.

Brands are also unveiling flagship stores to cater to a specific audience, especially with luxury  goods segment. “We have more stores on high streets as they cater to our consumers, who don’t prefer entering crowded malls but a location where they can just park their car, walk-in and buy the product,” says Ramesh Tainwala, President, Samsonite West Asia. This luggage segment leader currently has 15 stores in Bangalore, of which 13 stores are stand-alone outlets and two are present in the malls.

Retail outlets in malls get huge footfalls, specially in the weekends comprising of window shoppers, people awaiting the start of a movie or some who just want to kill time! Just a few of these footfalls churn the cash register and materialise into business for retailers.

Whereas flagship or exclusive outlets which do not get huge crowds, are most often visited only to purchase the products, bring about better sales for brands. As all retailers say, outlets are all about location! location! and location! Standalone outlets on high streets offer visibility that is often submerged amongst the hundred plus stores in shopping malls.

“The cost of putting up a hoarding leads to only visibility of the brand as compared to opening a store, which increases visibility but also churns out sales and allows the customers to experience the entire range of the brand in a comfortable environment,” says Mr Chandrashekar.

New retail developments in Bangalore have been slow, where the city faces acute shortage of retail space as most upcoming malls are still under construction. As a result, many retailers have taken up spaces in buildings in central locations and residential areas. Even  though the rental values of highstreets are on par with the prime malls located in central areas, retailers are choosing to be on highstreets that offers more space as compared to malls. “In stand-alone outlet one gets an exclusive high street frontage for the brand and pays for one’s own store. Whereas in malls, the one has to pay for common areas also,” explains Sanjeev Mohanty, Managing Director of Benetton India.

With high-streets offering retail space of more than 3000 sq ft for the store, brands stock up their entire range of merchandise. “These stores give an opportunity for the collection to be displayed more completely and also allow us to increase the width to provide a complete wardrobe solution. It gives our customers an international experience,” says Mr Mohanty.

Mall woes
Retail revolution has brought in property developers into retail infrastructure, where many have forayed into mall development to make a quick buck. And though malls might be the best place for retailers to go, some inconveniences have led retailers to the high street. Some problems faced by retailers include delay in completion, change of layout, fluctuating prices, and compromises on significant promises made at the time of signing the deal.

“There is definitely a gap between some developers and retailers, and effective communication with retailers will help developers get better idea of their needs,” says Neeraj Duggal VP-Retail, Prestige Group, the promoters of Forum Mall. Retailers find it hard to get their desired locations in a mall, which is provided by flagship stores of high-streets, offering them more options to design and present their merchandise.

“The catchment area has developed beyond the CBDs. Areas like Jayanagar, Indiranagar offer large spaces, which is not available in the CBDs,” says Govindraj, VP, Retail & Marketing, Tanishq.

Busy suburbs
However, the good sign is that malls are moving away from CBDs and moving to other catchment areas like Jayanagar, Bannerghata, Outer Ring Road, Whitefield, Hosur Road and Sarjapur Road. Along with ample area, retailers get space at reasonable rentals.

Cosmos Mall and Pantaloon’s Brand Factory are examples to this phenomena. According to Knight Frank’s report, 63 per cent of the new retail space (about 6.24 mn sq ft) in Bangalore will come up in these Southern suburbs by 2008. “There will always be demand for quality space in retail,” says Mr Duggal adding that Prestige will  open its mall in Whitefield shortly.

Industry experts say that retail space today is more driven by supply than demand. “If space is available, retailers are more than happy to open a store, therefore the potential for retail space is huge right now,” Mr Rajaram explains.

According to Knight Frank’s Retail Market Review, the current stock of organized space in Bangalore is over 2 mn sq ft, which is estimated to touch 8 mn sq ft by end of 2008. While the market for retail infrastructure is hotting up in the country, property developers and analysts say that the market will stabilize in the coming years.
“The retail space is growing phenominally at a grwoth rate of 25-30 per cent. But with more malls and other retail formats coming up the market will stabilize in 3-4 years,” says BG Uday, Managing Director, Garuda Mall.