Anna Chubotina, CEO of Arricano: shopping mall as a reflection of public reality

While constantly focusing on strategic goals – the company's growth, development of new projects, capital efficiency and operational activities - the Arricano team actively experimented with tactical tools, turning public sensitivity into highly demanded corporate competence. 

This is exactly what Anna Chubotina, CEO of Arricano, made at the RAU Expo 2021 industry conference. She also explained how priorities in the company's management changed during the lockdown and what external market forces affected financial and corporate resistance to turbulence. RAU offers to get acquainted with the speech in the op-ed format. 

About the strategy and its change under the influence of external market forces 

Managing any business starts with strategic planning. For me, the most acceptable definition of a strategy is a systematic business development model that progressively combines three components: goal setting, planning, and execution. And tactics are a tool for implementing a strategy that meets the main stated goals. 

During the quarantine period and lockdown in particular, the main task of Arricano's management was to ensure the company's financial stability in the face of the negative impact of the pandemic on the commercial real estate sector. First of all, capital expenditures that did not have a priority status for the company were revised and partially optimized. The process of dialogue with suppliers took a little longer in terms of time in order to reduce operating costs during the limited format of operation of our facilities. As a result of negotiations with creditors, agreements were concluded on partial restructuring and reduction of interest rates. 

A strong financial position, sufficient liquidity and lender confidence allowed the company to receive new loan tranches and continue its development even during the crisis period. 

Professional actions of management during a rather difficult 2020 made it possible to reduce the company's expenses by 17% while reducing revenues by 13% in US dollars compared to year-to-year and maintain the vacancy rate of projects at the level of about 1%. And by the end of 2020, the company significantly improved the main KPIs compared to the scenarios predicted at the beginning of the quarantine. 

Social context and trends 

Analyzing social realities and the surrounding context, we selected the trends that most affect the strengthening of marketing communication and interaction with communities, as well as the growth of demand for product categories within the optimal tenant mix of the shopping mall. First, it is to strengthen the visual identification of the shopping mall's brand and creativity. Second, it is working with those categories that show growth, including stimulating the turnover of the entire shopping mall. We are talking about electronics, fashion, sports, household goods, etc. And third, it is the generation of attractive emotionally positive and even therapeutic content in B2C communications with consumers of different target groups. 

Another important trend for us is collaboration projects of the shopping mall. We cooperate with tenant brands, distributors of goods sold in our tenants' stores, and "third parties" who provide various services and are interested in promoting their brand and increasing their customer base. For example, we had activities with the Vivo brand, which is represented in electronics stores. An interesting example of cooperation with the taxi ordering service Uklon and the children's school of models. 

Reality and different worlds 

Metaphorically, the German philosopher Arthur Schopenhauer aptly said about the existence of different worlds: "being under the same circumstances, people still live in different worlds." We can see how different the "worlds" and planes that appear online and offline are, and how they intersect in omni-channel space. 

Along with this, the "world" of retail real estate is formed by such factors as changes in the consumer profile, fluctuations in solvency, the emergence of new sales channels and new shopping motives. Due to the pandemic, the market has become more dependent on the decisions of the authorities – to close or open the shopping mall. Over time, flexibility was joined by the need for another corporate competence – speed. We have learned how to respond quickly to social change. For example, Black Friday is an occasion to go shopping all over the world, for which retailers and shopping malls prepare in advance. In 2020, with the introduction of a weekend quarantine, the Ukrainian "Black Friday" as a marketing project was organized in just a few days "from scratch", including with a thematic chess concept. 

Why chess 

Chess is a powerful logic game, interest in which increased after the launch of the mini-series "The Queen's Gambit". Therefore, using the hype, we offered visitors to Prospekt shopping mall trending communication and activity. After all, in order for the consumer to notice the brand and its offer, it is important to stand out from among a large array of information. Big chess in the shopping mall on "Black Friday" became that creative differentiated solution with a unique design, advertising messages and visual identification of the brand of the shopping mall. 

Our project performance metrics are tracking the reaction of consumers offline and online, as well as how much the message of the shopping mall corresponds to and falls into the positioning of tenant brands. As a result, we received a 5% increase in attendance on Black Friday 2020 compared to the previous year. 

Since "Black Friday" last year turned into "black weekdays" during the entire working week due to weekend quarantine, traffic growth was 28% compared to the previous weeks of November. The communication efficiency indicator of the message is 2.8 million of all digital coverages on this topic.     

Beyond retail brands 

The growing interest in the shopping mall as an offline media channel opens up new prospects for cooperation with "third parties" for us. We have several cases of implementing BTL performances in a shopping mall, where we interact directly with distributors of goods that are sold in stores. With this solution, we become closer to the consumer, combining the emotional connection of three brands – "shopping mall, manufacturer and seller" - in the minds of customers. 

We have cases of interaction with international FMCG brands – Milka, Red Bull. After all, a shopping mall is also a media platform for interaction both online and especially offline, which allows brands to effectively contact consumers through quests, promos, samples, surveys, etc. 

Direct access to the consumer in a pleasant atmosphere, interactive – these are the advantages of offline cooperation in the shopping mall. And online means creating new shared content, sharing audiences, and increasing reach for all brands. The result of the collaboration is to increase influence, recognition, convey values and create new communication opportunities. 

Shopping mall as a connoisseur of the surrounding community 

Another significant advantage of the shopping mall as a platform for presenting brands is the expertise and understanding of the audience of visitors. Therefore, before the opening of the store of the French sports brand Decathlon in Prospekt shopping mall, we provided this retailer with a full range of services – from the creative concept of representation in the offline shopping mall to digital manifestations. After all, the shopping mall has data about its community: how many sports schools, clubs, and swimming pools are located in the coverage area, who are the opinion leaders of these organizations, and how to attract their attention. 

Decathlon is a well-known brand in the world, and our task was to arouse interest in it on the left bank of the capital of Ukraine. And this is a completely different type of marketing project. 

As a result, this is a 23% share of Decathlon in the turnover of the "sports" category on the opening day of the store among seven sports brands that are represented in Prospekt shopping mall. 

What's next 

Our industry is changing, and players are looking for new niches for their growth – communication, assortment, and format niches. And the consumer automatically reads the psychology of the brand and the offer that they will receive from the brand for the purchase, in addition to the product: either an emotion, or a compliment, or convenience or service. This determines which stores customers will return to. 

Everything that happens in the shopping mall's ecosystem is the result of both external social influences, as well as the creation of an internal atmosphere, manifestations of brands and moods that are brought by the guests of the shopping mall as representatives of various target groups, brand teams of stores, food court operators and, of course, the management team of the shopping mall. 

The goal of the shopping mall is to be hospitable and friendly, build trusting relationships with their communities, and encourage visitors to interact with brands based on the principle of human-centrism. The result is revenue growth for all stakeholders, which is undoubtedly one of the key strategic goals of industry players.