Shopping malls, or commonly known as malls, are enclosed shopping centers usually managed by a single
company. Malls house a variety of retail shops and services and surrounded by a parking area. These shopping centers have interconnecting walkways enabling their customers to easily walk from unit to another.
In the Philippines, no one can deny the fact that malls are sprawling around offering variety of goods and services. Shopping malls are like small market based-cities and retail concentrations, within cities.
The establishment of malls and its rapid expansion can be explained by a concept in Urban Economics known as Agglomerative Economies in Marketing. This concept causes firms to cluster, as can be seen by the different retails outlets and stores situated inside malls. Agglomerative Economies makes it advantageous for firms to cluster. Firms can reduce cost of marketing their products by locating near each other due to positive externalities, in the case of mall, the “shopping externalities”.
Shopping externalities occur when the sales of one store are affected by the location of other stores. These externalities are generated by two types of products, namely: imperfect substitutes and complements. Clusters of stores in malls provide these types of products, thus generating these externalities inside the mall.
Because of the existence of stores offering goods and services that are imperfect substitutes, similar but not identical products, comparison shopping can be done by consumers in an easier and faster way. Potential buyers can compare prices, quality and promotions offered by different establishments without the hassles and costs of traveling. Comparing and purchasing goods and availing services can be done just by walking around.
One-stop shopping can also be done inside malls because products that are complements are sold in it. Complementary good are usually purchased in one shopping trip. If stores offering this type of good are clustered, then shopping trip time and costs is reduced. Stores provide goods that are complementary, thus benefiting from each others presence. If these stores are located in such a way that I need to travel from one unit to another by a tricycle, one-stop shopping becomes impossible.
Making comparison and one-stop shopping easier and faster inside malls make it an in-demand business. People, in these modern days, crave for convenience and conveniencece in shopping is one of them.
Aside from offering wide choices of commodities for shoppers, malls are fully air conditioned. In a warm country like ours, malls become a place of cooling oneself off in a hot summer or an ordinary day.
Not only do malls sell products, they also demand workers. They are large employments centers. A mall, employs more than a thousands workers and employees, from cashiers, sales persons, managers, supervisors, janitors, security guards and many others. Aside from the employees of the mall, drivers, jeepney and taxi, gets benefited by the mall’s location also. Thus, malls are not mere shopping center but also employment haven for the workers and the job seekers.
These explain the swift multiplication in the numberof malls around the country, and also in Iloilo City. To cater also potential buyers from different locations, malls, like SM malls, have now 4 branches just within the city. The reasons for such are still convenience for shoppers and reducing travel costs of customers residing or located near any of the four branches.
Also, if a city is big enough, it can support several malls. Just here in Iloilo, several shopping malls have been established. Not only do these malls serve the residents in the city, but also the shoppers in the surrounding municipalities. Rural shoppers go the city to purchase goods and services that the malls offer. In this situation, the Central Place Model holds true. Consumers travel to bigger cities. Also, the larger the city, the greater possibility it can support and sell variety of products. As in this case, Iloilo City, due to the large number of shoppers, it can support variety of shopping malls.
Today, in the Philippines, a large number of shopping malls have been rapidly spread out around the country. The Filipino people, steadily increasing also in number, support the existence of these establishments.