RESULTS OF 2020: "WE HAVE NEVER COMMUNICATED SO CLOSELY AND OFTEN WITH THE AUTHORITIES BEFORE" - ANNA CHUBOTINA

Arricano CEO Anna Chubotina told the Impulse expert and communication group about the operation of shopping malls in Ukraine in 2020 as part of the Results 2020 project

About the biggest difficulties of the company in 2020 in relations with the authorities, tenants and visitors

2020 was quite a controversial year in both literal and figurative terms. We have never communicated so closely and often with the authorities, either at the corporate level or at the industry level. Retail and development market players had to defend their position on security in the shopping mall and the measures taken. By the way, shopping malls were among the first to undertake an educational mission to inform city residents about the importance of social distance and respiratory etiquette. Arricano has invested more than UAH 10 million in disinfection of shopping malls, the formation of a safe social space for shopping malls and an information campaign aimed at improving the culture of responsible behavior in public places.

There were a lot of challenges, because the usual linear formats of cooperation with all stakeholders were changing, and responsibility in the shopping mall increased. With our tenant partners, for example, we switched to individual agreements, taking into account the prospects in each product category. Behavioral and consumer patterns have changed. Therefore, we focused on researching new insights and sharing them with colleagues in the market and retailers. We have also implemented a number of our own original trend-generating projects aimed at cooperation with brands and creating new shopping motives.

We consider shopping mall's traffic, audience engagement in the content and activities of the shopping mall's brand, as well as tenant turnover to be marketing performance indicators. Since consumer behavior patterns have changed during the quarantine period, it is not always appropriate to compare 2020 data to data for previous years. For example, traffic to our shopping malls during June-August 2020 decreased by 10-15% compared to the same period in 2019. However, the turnover of tenants in some categories was either the same as in the previous year, or even higher. In general, Arricano Group's trade turnover decreased by up to 10% in national currency, given that, for example, in Kyiv, the shopping malls operated in a limited format 82 out of 365 days. And this is 22% of all the usual working hours. This confirms that guests came to the shopping mall mostly purposefully – for goods and services, that is, high-quality traffic, which means that the positioning, concept and product offer in the shopping malls meets the needs of the target audience. 

About which tenants were objectively the most difficult in 2020

Most of all, the pandemic, lockdown and quarantine restrictions affected those categories that socialize the population. These are entertainment and public catering.

In our marketing program for the development of the shopping mall, we have implemented projects to support our tenants. For example, a communication collaboration project with operators of the multiplex food court and cinema in Prospekt shopping mall – MOOD plus FOOD. As a result, we increased the demand for food consumption in food court establishments, motivating it with various rational and emotional messages, gastronomic exhibition, creative communications, and raffled off movie tickets. A separate project was Art&Fashion, which we conducted both in Prospekt shopping mall and RayON shopping center, drawing attention to fashion, modern brands and the need to improve our own style.  

About the factors that affected the shopping malls' market in 2020

Most of all, the shopping malls' market was directly affected by the quarantine, which provoked other socio-economic complications. This includes a drop in the population's ability to pay, and a change in the behavioral patterns of visitors, including social fear of public places. After all, the call "stay at home" was heard for too long.  And the most important thing is that in 2020 it was difficult to predict anything or plan for the end of the year. This also affected the new fashion collections of operators, the availability of goods, and the distribution of new video content. Even with market demand, retail operators have not always been able to fully satisfy customers with new offers.

About the difference between quarantines in shopping malls in different regions

Arricano shopping malls are present in Kyiv, Zaporizhzhia and Kryvyi Rih. Most of all, quarantine restrictions were in effect in the capital. After the spring lockdown, it was allowed to resume the work of Kyiv shopping malls at the latest. In the capital, both the media and the authorities followed the operation of the shopping malls more closely, and more often came with diverse inspections. And this has a logical explanation, because Kyiv has the highers number and density of population. And during the quarantine, it was important to reduce the social migration of the population as much as possible.

About changes among tenants in 2020

Last year, our company signed 89 new cooperation agreements with tenants. The "sports" category is actively developing, and a new Turkish shoe retailer Flo has entered the market, which opened its first store in Kyiv in Prospekt shopping mall. Taking into account social realities, consumer demand for goods and services has changed. It is now more appropriate to talk about shopping not for rational or impulsive reasons, but in the category of leisure, pleasure and satisfaction, when the process is as important as the result. Or even more important. Through the experience of "staying at home", visitors have developed a new understanding and value of the shopping mall as a social space where you can come and spend time. Due to the inability to make purchases offline for three months, the need for socialization and obtaining consumer experience in the shopping mall increased. After all, its full cycle consists of several stages: inspection of brand products in stores, communication with sellers, selection of models, fitting, feeling of purchase and the fact of purchase, unpacking purchased items at home, etc.. Each moment has its own consumer joys and emotions that are associated with going to the shopping mall.

About general conclusions and lessons from the results of 2020

We continue to harmonize the shopping mall ecosystem and improve tenant-mix. And all this in conditions of technical vacancy, which does not exceed 1%.

I believe that 2021 will be a year of new breakthroughs in various industries, segmented niches in various categories and product groups accompanied by the emotions and moods of customers will grow.  Our team has strengthened such skills as predicting market trends and responding quickly to them, which allowed us to implement our own trend-generating projects.

Earlier, as part of the results 2020 project, the president of the Grand Corporation, Volodymyr Spivakovsky, told the Impulse expert and communication group about the educational services industry of Ukraine in 2020.

The Impulse expert and communication group has been conducting an annual sectoral survey of experts and market leaders since 2018.

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