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Case Study On Crossroads

1) Crossroads was a 150,000 sq ft shopping mall in Mumbai that aimed to set new standards when it opened in 1999 with features like rooftop parking and aerial walkways. 2) However, within a year the mall began losing significant foot traffic after requiring visitors to show a credit card, mobile phone or club membership or pay an entry fee, which many found insulting. Foot traffic dropped by over 70%. 3) As foot traffic declined, many stores struggled and some tenants like a bookstore opted to leave due to not meeting sales targets, while others renegotiated lower rents. The management tried using anchor stores like McDonald's to draw customers but this did not fully solve the issue of declining

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Abhishek Jain
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785 views2 pages

Case Study On Crossroads

1) Crossroads was a 150,000 sq ft shopping mall in Mumbai that aimed to set new standards when it opened in 1999 with features like rooftop parking and aerial walkways. 2) However, within a year the mall began losing significant foot traffic after requiring visitors to show a credit card, mobile phone or club membership or pay an entry fee, which many found insulting. Foot traffic dropped by over 70%. 3) As foot traffic declined, many stores struggled and some tenants like a bookstore opted to leave due to not meeting sales targets, while others renegotiated lower rents. The management tried using anchor stores like McDonald's to draw customers but this did not fully solve the issue of declining

Uploaded by

Abhishek Jain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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RSOMM RM SEM IV

Case Study on Crossroads:


On August 28, 1999, Mumbai witnessed the launch of a world class shopping mall and entertainment
complex that would set new standards in multipurpose high-rise shopping complexes. The 1,50,000
sq.ft., Internationally styled Crossroads in Mumbai, in the hub of India’s business activity, redefined
shopping in India.

Sprawled across separate buildings, under Asia’s second largest roof, Crossroads had several uncommon
features like a terrace car parking with two automatic elevators for transporting vehicles. It also had
aerial bridges, or crossovers, to interlink all the facilities.

The sheer size and spread of the place presented a stupendous challenge. While one building in
Crossroads is five stories in a centrally air-conditioned shopping complex called pyramids; the other two
buildings house the public entertainment area and individual outlets where big merchandising names
have set up shops. It is further divided into five clusters for easy access by the shoppers.

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 6,000-8,000 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. To deal with this situation, Crossroads initially relied on using anchor tenants like
McDonald’s and Pantaloons to attract crowds. The management reasoned that the shoppers at these
outlets would then disperse to the other outlets of the mall. But this plan did not work out as expected.

However, traffic-dependant outlets like bookshops and music stores were highly disappointed with the
new development. For instance, Fountainhead needed at least 1000 walk-ins every day, with daily sales
of about one lakh, to cover its monthly expense of Rs. 8 lakh. But, there were days when just 100 people
walked-in. Monthly sales fell to Rs. 12-15 lakh. Soon, Fountainhead opted out of Crossroads. Many of
the other tenants also started demanding lower rentals from the prevailing Rs. 250 per sq.ft.

Falling traffic was not the only reason for Fountainhead’s opting out. There were also problems with the
mall’s layout. Books offered very little margins, unlike jewelry or electronic goods. Also, they were
mostly impulse- purchases and hence needed more traffic. The greatest disadvantage for the store was
that it was on the fourth floor.

People hardly went up to the fourth floor just to browse through. The store would have been a little
better off at the entrance or on the first floor. The only two tenants who were not complaining were
McDonald’s and Pantaloons. McDonald’s sold around 8,000 meals a day, which made it one of the most
successful outlets in Mumbai.
The success of these outlets could not be completely attributed to the mall. Originally, it was expected
that the onus for drawing traffic would lie with the mall management. But, soon after inception, the
relationship between mall management and the tenants soured. The recreation arcade of the mall was
also facing problems. In 2006, the group sold it to Future group for over Rs. 300 crores which plans to
open Central, the only seamless mall of India.

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