The USA has experienced a retail crisis over the last two years, it being dubbed the retail Armageddon. This has impacted Malls, Retail stores such as the popular Macy’s, Sears among others. The main cause of the closure of malls and retail stores in USA is directly correlated to the rise of online sales.
The“Retail Armageddon” may be a phenomenon that is slowly encroaching the Kenyan market. Why? In 2017, mall owners in Nairobi struggled due to a gloomy economy and decreased consumer spending and as if that wasn’t enough, the oversupply of malls in the Kenyan market since 2016 has been a topic of discussion. According to Construction Kenya, Nairobi accounts for about 73% of all malls in Kenya with Two Rivers Mall (69,000 sqm), The Hub (35,000sqm) and Garden City (35000 sqm) being the largest malls in the city. Majority of the malls in Nairobi have a low occupation rate. Malcom Horne, CEO of Broll property group attributed this to a narrow local tenant base that is unable to support the vacant space in the Kenyan Market. This has resulted to majority of the shopping malls having the same tenants, hence a lack of differentiation. Additionally, due to the oversupply of rental property tenants have had the upper hand in negotiating for monthly rental rates leaving the mall stuck between a rock and a hard place.
Some malls in the USA and in Kenya have taken a strategic approach by offering customers more than just a shopping center. Two Rivers is extremely popular for the family-based activities it provides especially on Sunday while Village Market is known for the various talks and music performances it offers. In a bid to understand, track and compare the customer experience in malls, Data Fintech conducted a study to create the Nairobi Malls Customer Experience Index. The index looks at the malls that offer the best customer experience based on the most popular amenities and activities that individuals look at when visiting a mall. These include entertainment options, restaurants, fashion stores, consumer electronics, among others. According to Data Fintech ranking, the top 5 malls were Two Rivers Mall, Village Market, Sarit Center, Diamond Plaza and Garden City in that order.
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