Case Study

Crossroads

"I was shocked by the new rules. When questioned, the security guard said it was for my own safety. This was the way to keep the phaltu crowd away."

                                                                           - An angry Sunday shopper.

"Not even Harrod's stops people from entering the store. There could have been better ways to screen out undesirable elements."

                                                      - Vineet Chadha, Director, Celebrations.

Introduction

In the first week of August 2000, visitors to Crossroads, a retail mall, saw a polite notice informing them that a mobile phone, a credit card or a club membership card would act as an entry ticket.

People without these new age accessories would have to pay Rs. 60 as entry fee, for a coupon redeemable against purchases made at any time. Within days, the number of visitors to the mall fell by more than 70%. Many of the visitors felt it very insulting to prove that they possessed a credit card or a mobile phone. Traffic continued to fall even after the ban was lifted two months later. It hovered around 6000-8000 a day, as against the initial walk-ins of 30,000-40,000 on weekdays and up to a lakh on weekends. Disappointed with the low traffic, Fountainhead, a bookstore, opted out of Crossroads. Shyam Ahuja, famous for his carpets and dhurries, vacated two-thirds of the space. Other unhappy tenants too, started renegotiating rentals.

The 'Shoppertainment'

Crossroads, situated near Haji Ali in South Mumbai, and spread across 1,50,000 sq.ft., was launched by Piramal Enterprise in September 1999.

The chairman of the group, Ajay Piramal aimed at introducing the concept of 'shoppertainment' to the Indian consumer through Crossroads, complete with food courts, recreation facilities, and a large car parking space. The mall was created on four levels, offering jewelry and children's goods; gifts and women's wear; houseware; and men's wear. Prior to the establishment of Crossroads, Piramal Enterprises had set up a Roche factory at that location. To utilize the real estate in a better way, the group considered many options with the help of consultants McKinsey and KSA Technopak. The surveys by these agencies revealed that the urban population always sought a shopping environment that let a family spend time together.

Keeping this in mind, the group developed the Crossroads model. Crossroads was Ajay Piramal's answer to the malls like London's Harrods or New York's Macy's. (Refer box).

The shopping arcade of the mall, spread across 60,000sq.ft., offered 125 top Indian and international brands in fashion, jewelry, footwear, watches, etc. It also had an in-house department store, Pyramids, that offered about 150 brands. Pyramids was the biggest store in the mall, followed by Pallazzio, which had 80 brands of jewelry, watches, and other accessories. Other brands available in this arcade were Levi's, Lee Cooper, Adidas, Lacoste, Swarovski, Reebok, Nike and Benetton. Outlets of Indian designers like Rohit Bal, Ritu Beri, and JJ Valaya were also a part of this arcade. (Refer Table I). The mall had a plethora of entertainment options at the Jammin', which covered three floors. It offered simulation games, bumper cars, pool tables and a ninepin bowling alley...

At The Crossroads

With such huge crowds, the mall's infrastructure came under immense pressure. Escalator queues were long and aisles became crowded.

Moreover, these huge crowds didn't comprise of the posh clientele that Crossroads had targeted. Regular customers started enquiring when the crowds would be low so that they could shop undisturbed. To tackle this problem, the management decided to restrict entry on weekends. The management had put a notice at the entrance stating that one had to produce a credit card, cellphone, visiting card, or a student ID card to gain entry. Or they had to pay Rs.60 as entry fee, refundable against purchases at any time. Said Chadha, "We argued against it, but the management sided with more premium tenants like J.J. Valaya." Many people turned back, insulted that they had to prove that they had a credit card or a cell phone. Questions: 1.     Explain the problem faced by Crossroads. 2.     Explain the concept of Shoppertainment. 3.     What are restructuring plan adopted by Crossroads?