Quality Index in Judging Shopping Centre

Shopping Center Quality Index !!! --- SQI

India tops the annual list of most attractive countries for international retail expansion, according to AT Kearney's Global Retail Development Index 2006 .The USD 270-billion Indian retail market is growing at the rate of 13 per cent -- and the organized segment grew nearly 48 per cent in 2006 at prevailing prices. Projected growth rate for the organized segment is about 40 per cent for year 2007 and with major global players and Indian corporate houses entering the fray this growth is likely to touch 45 per cent per annum over the next three years. By 2010 about 300 million square feet of additional retail space likely to be generated. Mall development has been steady -- currently there are about 200 operational malls (including some on the verge of completion), and this number is expected to rise to almost 600 by the year 2010. Of the new malls coming up, 40 per cent are concentrated in the smaller cities.

Quality of shopping malls in terms building quality though being one of the most important factors have always being ignored as there are no set parameters to do a comparative study. With over 600 malls that will be operational in next 5-6 years the success factor of the mall will depend not only on tenant mix, location, facilities but various other factors.

It is important for the retailers, advertisers and investors to judge a shopping mall on totality with quality index also. This is important as "what can be measured….. Can only be improved".

An overall ranking of various factors affecting the success of shopping center can be done through analytical weightage method.

Loosely we can say that : A shopping center is store of stores spread over a building or multiple buildings enabling customers to move from one store to another store in a comfortable atmosphere with adequate amenities. The shopping center must also fulfill needs of right tenant mix, security, safety, convenience of approach, entertainment etc.

What are the various Base Quality Parameter Categories that are important constituents of S.Q.I?

Sno Base Quality Categories
1 Building Presentation
2 Mall Management
3 Functionality
4 Service and Tenancy
5 Access and Circulation
6 Facilities
7 Scope for Marketing
8 Developer Past Experience

Here, we must Factors that are important constituents of each Categories. This list can be as exhaustive as possible. From various reports we will consider following Factors for each of the constituents:

Sno Base Quality Categories Factors
1 Building Presentation Exterior Design Interior Design

2 Mall Management Security & Access Maintenance

Parking Management

3 Functionality Structural Design

Store Size

4 Service and Tenancy Tenant Mix

Effective Space HVAC Toilet Power Supply Lighting Supply
5 Access and Circulation Circulation of person Circulation of Merchandise Accessibility Signage
6 Facilities Horticulture Restaurant , Food Court , Multiplex Bank, ATM Playground Employee Facility
7 Scope for other entertainment Place for events Common Area
8 Developer Past Experience Financial Strength Past Retail /Mall Experience

Here, we know the factors responsible for the main quality parameters. To understand this further, we must broaden the factors further. So, we will arrive at sub-factors, which constitutes factors:

Sno Base Quality Categories Factors Sub -Factors
1 Building Presentation Exterior Design Façade Design Main Entrance Design Interior Design Atrium Design Common Area Design Finishing of materials Total Floor plate area
2 Mall Management Security & Access Security and Parking Access Control Security and Indoor Access Control Maintenance CAM charges Housekeeping HVAC Maintenances of Services and Access Parking Management Capacity Charges Planning
3 Functionality Structural Design Ceiling Height Column Height Load Store Size Super Area Carpet Area Design
4 Service and Tenancy Tenant Mix Tenant Mix Anchor Store Zoning HVAC Common Area Temperature Store Temperature Toilet Size of Toilet Design of Toilet Number of Toilets Power Supply Load available to each store Load available to entire mall DG power back up Lighting Supply Design effect of lighting Energy Conservation Adequate day and night light system Circulation of person Circulation of physically challenged people Logical circulation so that all stores gets visibility Ease of movement
5 Access and Circulation Circulation of Merchandise Entry of Merchandise Exit of merchandise Accessibility Accessibility of mall Main entrance From parking Signage Type of signage Visibility of signages of all malls Horticulture Adequate Horticulture
6 Facilities Restaurant , Food Court , Type Quality Multiplex Number of screens Seating capacity Bank, ATM Known Bank Number of ATMs Location Kids Facility Crèche Play area Employee Facility Changing rooms Cafeteria Parking Others Garbage Dump, STP, Energy Saving, Automation, CCTV etc.
7 Scope for other entertainment Common Area Kiosk space Quality and type of Kiosk Other common area planning Scope of events Large areas for events Space for promotions
8 Developer Past Experience Past Retail /Mall Experience Success of past malls Financial strength

This kind of division of factors is leading us to hierarchical decision-making process. We will see further how this would help us arriving at a S.Q.I.

Now, we must understand that all the above are very important factors/sub factors for any shopping center. But all of them may not be very important equally for type of shopping center. Thus, to star with we need to score the basic quality categories among themselves.

Various research reports, consumer surveys suggest that Mall Exterior and Interior design, Facilities, Utilities planning, Circulation plan & tenant mix would account for at least 80% of the weightage. But the weightage may vary from mall type to type.

Following can be the distribution of weightage score among various basic quality parameters for a mall (up to 3 lacs sq ft) in up market location with up market departmental store and stores of large national brands:

Sno Base Quality Categories Weightage
1 Building Presentation .14
2 Mall Management .08
3 Functionality .16
4 Service and Tenancy .17
5 Access and Circulation .15
6 Facilities .20
7 Scope for Marketing .05
8 Developer Past Experience .05 TOTAL 1

Above weightage are in percentage.

Following can be the distribution of weightage score among various basic quality parameters for a value - mall (up to 3 lacs sq ft) in large neighborhood location with a large hypermarket /discount anchor store and other stores can be factory outlet or value stores or local brands:

Sno Base Quality Categories Weightage
1 Building Presentation .14
2 Mall Management .08
3 Functionality .16
4 Service and Tenancy .17
5 Access and Circulation .15
6 Facilities .20
7 Scope for Marketing .05
8 Developer Past Experience .05 TOTAL 1 Sno Base Quality Categories Weightage
1 Building Presentation .12
2 Mall Management .09
3 Functionality .19
4 Service and Tenancy .13
5 Access and Circulation .18
6 Facilities .17
7 Scope for Marketing .05
8 Developer Past Experience .07 TOTAL 1

Sno Base Quality Categories Weightage
1 Building Presentation .14
2 Mall Management .08
3 Functionality .16
4 Service and Tenancy .17
5 Access and Circulation .15
6 Facilities .20
7 Scope for Marketing .05
8 Developer Past Experience .05 TOTAL 1

Sno Base Quality Categories Weightage
1 Building Presentation .14
2 Mall Management .08
3 Functionality .16
4 Service and Tenancy .17
5 Access and Circulation .15
6 Facilities .20
7 Scope for Marketing .05
8 Developer Past Experience .05 TOTAL 1

Sno Base Quality Categories Weightage
1 Building Presentation .14
2 Mall Management .08
3 Functionality .16
4 Service and Tenancy .17
5 Access and Circulation .15
6 Facilities .20
7 Scope for Marketing .05
8 Developer Past Experience .05 TOTAL 1

Following can be the distribution of weightage score among various basic quality parameters for a destination - mall (up to 6 lacs sq ft) away from neighborhood location with a large hypermarkets /department anchor store, game/ride area, amusement park and other stores can be brand stores:

Sno Base Quality Categories Weightage
1 Building Presentation .24
2 Mall Management .12
3 Functionality .20
4 Service and Tenancy .08
5 Access and Circulation .15
6 Facilities .20
7 Scope for Marketing .005
8 Developer Past Experience .005 TOTAL 1

Like above, various options can be created and weightages can vary. Thus first step is to create and mark weightages for basic quality factors. Hereafter, like we have given weightages to various basic quality factors, we distribute individual weightage score to individual factors and then to sub factors. The sum total of weightage of sub factors should be equal to its factors and sum total of weightage of factors should be equal to its basic quality factor. This can be understood from this example:

Lets take the case a mall (up to 3 lacs sq ft) in up market location with up market departmental store and stores of large national brands as discussed earlier. And take case of Building Presentation:
Sno Base Quality Categories Factors Sub -Factors
1 Building Presentation Exterior Design Façade Design Main Entrance Design Interior Design Atrium Design Common Area Design Finishing of materials Total Floor plate area

Now, as we know from last example that; weightage of Building Presentation is .14 and now we will give weightage to its factors. In a mall like this exterior design would be more important then interior design as, exterior design is what a customer will see first. This can be debated in case-to-case basis but for sake understanding of SQI, we will take exterior design as more important:

Sno Base Quality Categories Weightage Factors Weightage Sub -Factors
1 Building Presentation .14 Exterior Design .08 Façade Design Main Entrance Design Interior Design .06 Atrium Design Common Area Design Finishing of materials Total Floor plate area

Now we can see that sum of exterior design and interior design is equivalent to .14 which weightage of building presentation. Similarly, we will give weightage to sub factors, which should be equal to its individual factors:

Sno Base Quality Categories Weightage Factors Weightage Sub -Factors Weightage
1 Building Presentation .14 Exterior Design .08 Façade Design .06 Main Entrance Design .02 Interior Design .06 Atrium Design .02 Common Area Design .015 Finishing of materials .01 Total Floor plate area .015

The above list can be more exhaustive or can be reduced depending on requirement of individual retailer or investor.

Now, we have reached a point where we have listed all possible variables affecting the shopping center. We also have weightage for each sub factors that become primary decision-making criteria about a mall.

Sno Base Quality Categories Weightage Factors Weightage Sub -Factors Weightage
1 Building Presentation .14 Exterior Design .08 Façade Design .06 Main Entrance Design .02 Interior Design .06 Atrium Design .02 Common Area Design .015 Finishing of materials .01 Total Floor plate area .015
2 Mall Management .08 Security & Access .03 Security and Parking Access Control .02 Security and Indoor Access Control .01 Maintenance .02 CAM charges .005 Housekeeping .005 HVAC .009 Maintenances of Services and Access .001 Parking Management .03 Capacity .02 Charges .005 Planning .005
3 Functionality .16 Structural Design .07 Ceiling Height .03 Column Height .03 Load .04 Store Size .09 Super Area .02 Carpet Area .05 Design .01
4 Service and Tenancy .17 Tenant Mix .04 Tenant Mix .02 Anchor Store .01 Zoning .01 HVAC .05 Common Area Temperature .03 Store Temperature .02 Toilet .02 Size of Toilet .007 Design of Toilet .003 Number of Toilets .01 Power Supply .02 Load available to each store .005 Load available to entire mall .005 DG power back up .01 Lighting Supply .01 Design effect of lighting .005 Energy Conservation .002 Adequate day and night light system .003 Circulation of person .03 Circulation of physically challenged people .01 Logical circulation so that all stores gets visibility .01 Ease of movement .01
5 Access and Circulation .15 Circulation of Merchandise .03 Entry of Merchandise .02 Exit of merchandise .01 Accessibility .08 Accessibility of mall .05 Main entrance .02 From parking .01 Signage .02 Type of signage .005 Visibility of signages of all malls .015 Horticulture .02 Adequate Horticulture .02
6 Facilities .20 Restaurant , Food Court , .07 Type .05 Quality .01 Multiplex .07 Number of screens .04 Seating capacity .03 Bank, ATM .01 Known Bank .005 Number of ATMs .003 Location .002 Kids Facility .03 Crèche .01 Play area .02 Employee Facility .01 Changing rooms .05 Cafeteria .005 Parking .005 Others .01 Garbage Dump, STP, Energy Saving, Automation, CCTV etc. .01
7 Scope for other entertainment .05 Common Area .03 Kiosk space .005 Quality and type of Kiosk .02 Other common area planning .005 Scope of events .02 Large areas for events .018 Space for promotions .002
8 Developer Past Experience .05 Past Retail /Mall Experience .05 Success of past malls .03 Financial strength .02

Now, lets say a retailer has to take decision about his store in one of the two malls. Both malls are opposite to each other in a large neighborhood. Both malls are located l (up to 3 lacs sq ft) in up market location with up market departmental store and stores of large national brands as discussed earlier.

Now, if we have to take decide which mall to go for, then we will consider the weightage of sub- factors. The weightage of sub factors will become highest mark that can be given and both malls will be rated. The sum total of marks given both malls for each sub factor cannot be more then weightage of each related sub factor. Lets understand it from point of view of building presentation:

Sno Base Quality Categories Weightage Factors Weightage Sub -Factors Weightage MALL 1 MALL 2
1 Building Presentation .14 Exterior Design .08 Façade Design .06 .02 .04 Main Entrance Design .02 .01 .005 Interior Design .06 Atrium Design .02 .01 0.00 Common Area Design .015 .010 .005 Finishing of materials .01 .005 .005 Total Floor plate area .015 .010 .015 Total 0.065 0.07

Here if we look at Exterior Design, you will see that Mall1 scores more in façade design but less for façade design as compared to Mall 2. Similarly all both malls will be scores on all sub-factors. Each base quality factor will also have a total like we have above 6.5% for Mall 1 and 7% for Mall 2. Thus, Mall 2 has scored better in case of building presentation. Base quality score is sum total of all scores it has been assigned against each sub- factor related to the base factor.

Similarly, lets now get all scores for all sub-factors:

Sno Base Quality Categories Weightage Factors Weightage Sub -Factors Weightage MALL 1 MALL 2
1 Building Presentation .14 Exterior Design .08 Façade Design .06 .02 .04 Main Entrance Design .02 .01 .005 Interior Design .06 Atrium Design .02 .01 0.00 Common Area Design .015 .010 .005 Finishing of materials .01 .005 .005 Total Floor plate area .015 .010 .015
BUILDING PRESENTATION QUALITY INDEX 65% 70%
2 Mall Management .08 Security & Access .03 Security and Parking Access Control .02 .01 .005 Security and Indoor Access Control .01 .003 .005 Maintenance .02 CAM charges .005 .001 .004 Housekeeping .005 .002 .003 HVAC .009 .003 .004 Maintenances of Services and Access .001 .005 .003 Parking Management .03 Capacity .02 .01 .005 Charges .005 .003 .001 Planning .005 .001 .003
MALL MANAGEMENT QUALITY INDEX 39% 33%
3 Functionality .16 Structural Design .07 Ceiling Height .03 .02 .01 Column Height .03 .02 .01 Load .04 .01 .02 Store Size .09 Super Area .02 .01 .01 Carpet Area .05 .03 .01 Design .01 .005 .002
FUNCTIONALITY QUALITY INDEX 9.5% 6.2%
4 Service and Tenancy .17 Tenant Mix .04 Tenant Mix .02 .005 .001 Anchor Store .01 .006 .004 Zoning .01 .006 .004 HVAC .05 Common Area Temperature .03 .02 .01 Store Temperature .02 .01 .005 Toilet .02 Size of Toilet .007 .005 .001 Design of Toilet .003 .002 .001 Number of Toilets .01 .005 .005 Power Supply .02 Load available to each store .005 .003 .001 Load available to entire mall .005 .004 .001 DG power back up .01 .005 .001 Lighting Supply .01 Design effect of lighting .005 .004 .001 Energy Conservation .002 .001 .001 Adequate day and night light system .003 .001 .003 Circulation of person .03 Circulation of physically challenged people .01 .001 .007 Logical circulation so that all stores gets visibility .01 .003 .006 Ease of movement .01 .002 .006
SERVICE AND TENANCY INDEX 8.3% 5.8%
5 Access and Circulation .15 Circulation of Merchandise .03 Entry of Merchandise .02 .008 .01 Exit of merchandise .01 .002 .001 Accessibility .08 Accessibility of mall .05 .02 .03 Main entrance .02 .01 .01 From parking .01 .006 .002 Signage .02 Type of signage .005 .003 .002 Visibility of signages of all malls .015 .011 .004 Horticulture .02 Adequate Horticulture .02 .005 .01
ACCESS AND CIRCULATION INDEX 6.5% 5.9%
6 Facilities .20 Restaurant , Food Court , .07 Type .05 .03 .02 Quality .01 .001 .008 Multiplex .07 Number of screens .04 .01 .03 Seating capacity .03 .01 .03 Bank, ATM .01 Known Bank .005 .001 .004 Number of ATMs .003 .001 .002 Location .002 .001 .001 Kids Facility .03 Crèche .01 .005 .005 Play area .02 .005 .01 Employee Facility .01 Changing rooms .05 .01 .01 Cafeteria .005 .003 .002 Parking .005 .001 .002 Others .01 Garbage Dump, STP, Energy Saving, Automation, CCTV etc. .01 .005 .005
FACILITIES QUALITY INDEX 8.3% 12.4%
7 Scope for other entertainment .05 Common Area .03 Kiosk space .005 .002 .003 Quality and type of Kiosk .02 .01 .005 Other common area planning .005 .004 .001 Scope of events .02 Large areas for events .018 .011 .002 Space for promotions .002 .001 .001
ENTERTAINMENT QUALITY INDEX 2.8% 1.2%
8 Developer Past Experience .05 Past Retail /Mall Experience .05 Success of past malls .03 .02 .01 Financial strength .02 .01 .01
DEVELOPER QUALITY INDEX 3% 2%

Here we can have a holistic look and under stand which mall can be actually better for a retailer on above scales. Lets have a look at all the base quality index parameters and the score of each mall AND SUM FIGUE OF ALL is the SHOPPING CENTER QUALITY INDEX:

Mall 1 Mall 2
BUILDING PRESENTATION QUALITY INDEX 6.5% 7.0%
MALL MANAGEMENT QUALITY INDEX 3.9&% 3.3%
FUNCTIONALITY QUALITY INDEX 9.5% 6.2%
SERVICE AND TENANCY INDEX 8.3% 5.8%
ACCESS AND CIRCULATION INDEX 6.5% 5.9%
FACILITIES QUALITY INDEX 8.3% 12.4%
ENTERTAINMENT QUALITY INDEX 2.8% 1.2%
DEVELOPER QUALITY INDEX 3% 2%
SHOPPING CENTRE QUALITY INDEX 48% 43%

Thus, here Mall 1 is better then Mall 2. But depending in requirement of individual retailer – Mall 2 can be chosen. For example Mall 2 can be chosen if facilities of mall matter more to the brand. This can be the case when a brand caters to a high-end customer and is a luxury brand; which has unit price point higher then other brands available in the mall.

Here we must one more point that though Mall 1 looks better then Mall 2, but both the malls are below average as there score is less then 50% , whereas score should be at least over 65%. Thus, we can say that retailer if required may opt out both the malls.

But it is always advisable to look for the SQI in totality with evaluation of as many as factors and sub – factors.

Above model can also be used to evaluate competition by shopping center itself or during planning stage this kind of evaluation can help shopping center to produce better product which can not only withstand competition but also becomes retailers favorite mall.

To end, this we can say very comfortably " What can be measured …can only be improved or evaluated".

About The Author:

Abhijit Das is presently associated with Ansal API (with Mall Management division). Ansal API has two operational malls in Delhi and Ludhiana called as Ansal Plaza. Ansal API is slotted to launch malls in Jalandhar, Greater Noida, Palam Vihar, Jodhpur, Amritsar in next few months. Abhijit Das holds over 8 years of experience in real estate, retail, advertising and hospitality sector. Abhijit Das has also authored a book "Mall Management" published by Taxmann Publisher that is soon launching the 2nd edition of the book.

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