RESEARCH ARTICLES

 

Key Relationship Principles for Retail Tenants and Shopping Centre Management

 

 

AM Matthysen^I; TG Pelser^II,*; JJ Prinsloo^III

^INorth-West University, Faculty of Commerce. Annemie11@gmail.com
^IIUniversity of KwaZulu-Natal, Graduate School of Business & Leadership. pelser@ukzn.ac.za
^IIINorth-West University, NWU Business School. Hein.Prinsloo@nwu.ac.za

 

 

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ABSTRACT

Many regions are thoroughly saturated with shopping centres, and trends are changing so quickly that many retail property owners feel confused about what to do next to stay competitive and maintain consumer satisfaction and interest. Today, tenants and consumers are more price-conscious than ever, and demand that malls use the latest technological applications to communicate with them and adapt to their ever-changing needs. The purpose of the study was to identify the key principles that would contribute to maintaining satisfactory relationships between tenants and the management of regional shopping centres, in order to ensure sustainability for both role-players. The theoretical underpinnings were based on two models: the Mohr and Spekman and the Morgan and Hunt relationship models. These models addressed the empirical testing of relationship quality and were used as the fundamental theoretical base for this study. The study required the implementation of a descriptive research method and both a qualitative and quantitative research approach was used. The target population comprised independent mall tenants and shopping centre management of regional shopping centres in the Western Cape Province, South Africa. All questionnaires were hand-delivered and a sample size of 93 was realised. The results from the study indicated that the tenants believe that trust is the primary component of a possible long-term relationship. Management needs to build personal relationships with the individual tenants by sharing experiences and ideas in order to learn more about each other. If shopping centre management applies the proposed recommendations, this could potentially improve their relationship with tenants. This could also potentially improve retail tenant satisfaction, loyalty, and retail tenant retention.

Key phrases: Centre management; relationship; retail tenant satisfaction; shopping centres; tenants and trust

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1. INTRODUCTION

Retail is part of consumers' daily lives, and is motivated by needs to be satisfied. According to Cant (2010:3), "A retailer may be seen as a business that focuses its marketing efforts on the final consumers, with the intention of selling goods or services to them". In general, retailers operate in a highly competitive and rapidly changing environment, which is most challenging, exciting and could offer significant financial rewards. The retail industry of any given country contributes largely to the economy (Prinsloo 2010:1) and provides many different job opportunities to the citizens (Cant 2010:4). Shopping centres are one of the main types of retail outlets in South Africa. The strongest point that a shopping centre as a retail concept has, is probably the wide variety of merchandise, services and entertainment it offers.

The population relevant to this research consists of independent mall tenants, also known as customers, as well as the management of regional shopping centres in the Western Cape. An independent retail tenant can be defined as "someone who is completely responsible for his/her own business". These independent retailers are primarily the sole owners and have been integral to the development and growth of these entities. A regional shopping centre has a gross leasable area of 37 000 to 74 000 m², with at least two anchor stores (Prinsloo 2010:25). There are 332 shopping centres in the Western Cape, of which six can be classified as major regional shopping centres.

The success of a business relationship lies in the development and growth of trust and commitment among the role-players (Berndt & Tait 2012:24). In the world of business today, trust is more important than ever, especially when it comes to relationships with clients, retail tenants, employees and all stakeholders of a business. Within this study, trust means that tenants of the shopping centre and the management of the centre need to have shared goals and mutual benefits, in order to build a successful relationship. The management teams of shopping centres need to gather information about individual tenants in order to be able to tailor specific services rendered to them. Shopping centre management also needs to be more flexible in their engagement with tenants and treat their retail tenants as the individuals they are - rather than with a one-paintbrush-for-all-canvasses approach. Relationship marketing focuses on improving relationships with existing retail tenants (Berndt & Tait 2012:6). A business cannot focus on all relationships at once, since doing so would simply not be feasible. In order to build successful relationships, a business needs to take into account essential requirements for a relationship - trust, communication, shared goals, satisfaction, and loyalty.

Matthysen (2016:2) observed a lack of co-operation between centre management and the tenants of shopping centres. Matthysen (2016:2) state that the parties do not see the tenants and centre management as a 'single business' - which implies that the effectiveness of their relationship is at risk, because of a lack of collaboration. Roberts, Merrilees, Herington and Miller (2010:598) observed that a degree of tension between centre management and tenants exists. It further seems that centre management has considerable power which it may potentially or allegedly, abuse. Roberts et al. (2010:599) believe that an imbalance between tenants and centre management arises in relation to centre promotions.

Previous empirical studies as well as the secondary literature confirm that the business to business (B2B) relationship between tenants and shopping centre management can fail or succeed depending on how the parties 'behave' toward each other (Matthysen 2016:2). Personal industry experience supports the afore-mentioned argumentative literature toward potential conflicted tenant - management relationships. As a result, this study will endeavour to explore possibilities of streamlining the working relationship between the retailer and the management of the shopping centre - to ensure the sustainability of the centre and the profitability of the retailer.

Within the context of this study, it is important to consider that sustainability refer to the profitability and thus future going concern of an organisation, that are affected by social, environmental, cultural, and economic dimensions of doing business. The profit imperative is made clear by Pelser (2014:769) who stated that organisations need to constantly find new ways of utilising resources and added that sustainable performance requires an increasing balance between short-term profit maximising and looking beyond stakeholder interest.

The primary objective of this study was to identify (qualitatively) and test (quantitatively) key success variables that should contribute to maintaining satisfactory relationships between tenants and the management of regional shopping centres to ensure sustainability for both role-players.

 

2. RESEARCH PROBLEM

Regional shopping centres have shown internal growth since the last part of the 1990s and have become a prominent feature and integral part of the modern urban landscape (Prinsloo 2010:1). According to Matthysen (2016:3), a shopping centre is a group of retail and other commercial establishments that are planned, developed, owned and managed as a single property.

The development of shopping centres has mushroomed since the Second World War, particularly since the 1960s. It has since become a 20th century phenomenon (Cloete 2003:8). According to Amanda Stops, CEO of the SACSC (South African Council of Shopping Centres), South Africans can expect to see more shopping centres built during the next 10 years as property owners initiate new shopping centres to unlock markets (Anon 2015). These new developments will be focused in South Africa's major metropolitan areas -such as Johannesburg, Cape Town, eThekweni and Tshwane. According to Statistics South Africa (SSA), and South Africa's mid-year population estimates (2015:2), Gauteng and the Western Cape show positive increases in numbers and also have the highest average annual household income. Consequently, there should be a potential need for new shopping centres.

The role of shopping centres can be seen from different perspectives. It can be seen as a place of business, it can be viewed as a property, and lastly as an investment (Matthysen 2016:3). Therefore, shopping centre managers need to understand these perspectives before developing their own objectives and policies.

Current shopping centre management encounters many different challenges, which include identifying, understanding and meeting the ongoing needs of consumers, retailers and the mall management (Matthysen 2016:3). The increasing sophistication of shoppers and the proliferation of centres mean that competition for the customer's commercial rand is more intense than ever. This implies that the effective marketing of a shopping centre is critical to its current performance and sustainability in the future. The marketing plan requires a commitment from the centre's owners and ongoing support from tenants and other parties connected with the centre (Du Plessis, Strydom & Jooste 2012:533).

Retailers should see centre managers as being part of their team, because they can add expert knowledge and industry expertise, which can add value to the successful functioning of their outlets and benefit the mall (Cloete 2003:400). According to (Burger & Pelser 2018:144) value, however, has a different and often conflicting meaning not only in between all of the organisations' external constituencies, but also internally between role-players and at the heart of a discussion on value creation is self-interest. Therefore, within this study the concept refer to the creation and trading of value in an efficient and effective manner in order for the tenant and shopping mall to be successful within a complex economy.

Many businesses spend much effort, time and money to attract new customers, but surprisingly few take equal trouble to retain existing customers. Relationship marketing aims to satisfy existing customers by showing them that the business cares and is interested in a long-term, satisfying relationship (Berndt & Tait 2012:6). Very few businesses also go to the trouble of regularly measuring customer satisfaction in any systematic way, partly because they are obsessed with the need to win new customers, and partly because they fail to understand the real meaning of customer retention. According to Munusamy, Chelliah and Mun (2010:399), customer satisfaction is considered a prerequisite for customer retention and loyalty, and contributes to realising economic goals such as profitability, market share, and return on investment.

Applicable relevant business relationship terminologies within the business environment are generally referred to as B2B and B2C. Within the context of this study, either could be applicable. The term B2B refers to transactions between two businesses where both the buyer and seller are business owners (as in the case of tenants and shopping centre management teams). The term B2C refers to transactions between a business and end-user (as in the case of tenants and shopping centre management teams). Although both B2B and B2C are relevant within the context of this study, the focus was predominantly on B2C.

Against the above background, the research problem within the ambit of the research is: There is no trust, commitment and shared values between independent retailers of regional shopping centres and the management teams of these centres. This empirical research focused on independent mall tenants located in three of the six major regional shopping centres and their management teams, in the Western Cape Province of South Africa.

 

3. OBJECTIVES

Emanating from the research problem, the purpose of the research was to identify key principles that would contribute to maintaining satisfactory relationships between tenants and the management of regional shopping centres - to ensure sustainability for both role-players. The following secondary objectives were formulated to assist address the primary research objective:

• Undertake a literature analysis of the meaning of a relationship in a business to customer (B2C) environment and the principles that constitute a successful relationship.

• Determine how tenants experience their relationship with management.

• Determine tenant expectations regarding their relationship with management.

 

4. RESEARCH QUESTIONS

The research question for this study is: Is there a satisfactory relationship between tenants and shopping centre management to obtain mutual value? The following investigative questions were formulated in support of the research question:

• Which factors contribute to a successful business to customer (B2C) relationship?

• How do tenants view their relationship with management?

• What is the benefit to centre management of viewing their tenants as long-time customers?

• How does centre management retain successful tenants?

 

5. THEORETICAL BACKGROUND

Morgan and Hunt (1994:20) theorised that the presence of relationship commitment and trust are central to successful relationship marketing and its ability to "condition others". Morgan and Hunt further believe that when both commitment and trust are present in a relational exchange, the parties should produce an outcome that should promote efficiency, productivity and effectiveness. According to this Commitment-Trust Theory - parties identify commitment as key to achieving valuable outcomes. Therefore, Morgan and Hunt (1994:23) theorised that commitment is central to all relational exchange between a business and its partners. They further conceptualise trust as existing when one party has confidence in an exchange partner's reliability and integrity. In conclusion, Morgan and Hunt (1994:23) defined trust as a "generalised expectancy held by an individual that the word of another can be relied on". There are five important antecedents present in this theory: relationship termination costs, relationship benefits, shared values, communication, and opportunistic behaviour. There are also five qualitative outcomes of the Commitment-Trust Theory, which include: acquiescence, propensity to leave, cooperation, functional conflict, and uncertainty.

In the model of Partnership-Success, Mohr and Spekman (1994:136) used two indicators of partnership success: an objective indicator (sales volume flowing between dyadic partners) and an affective measure (satisfaction of one party with the other). The objective indicator grows from the belief that strategic partnerships are formed to achieve a set of goals. The affective indicator (satisfaction), is based on the notion that success is determined, in part, by how well the partnership achieves the performance expectations set by the partners.

5.1 The Retail Industry in South Africa

Retailing is evolving into a global, high-tech industry that plays a major role in the global economy. Retailing is a business that focuses its marketing activities on the end consumer (Cloete 2003:79). Retailing is simply about giving the customer what she/he wants (Markham 2016:11). Thus, independent retailers should follow the marketing concept guidelines - in this case customer orientation. Within the context of shopping centre management and independent tenants (retailers), Markham (2016:11) does not agree with the current relationship status quo and comments that "it is pretty certain that most mall management and more particularly investors, have not known what tenants wanted, and also did not care as long as the rent was received at the end of the month".

Retailing can take many different forms, such as shop retailing, telephone sales, door-todoor sales, and even vending machine sales (Pride & Ferrell 2012:424). Retailers range from street vendors selling "boerewors" rolls to internet retailers to multichannel retailers that has both an extensive physical store presence and an active internet site (Matthysen 2016:21). Retailing is important to the South African economy, because this industry provides many job opportunities. According to Du Plessis et al. (2012:490), retailers employ almost 20% of the total South African workforce and most customers' personal income is spent in retail stores.

Retailers do not operate in a static, closed environment; they operate in a continuously changing and very competitive environment. Pride and Ferrell (2012:425) add that new store formats and advances in information technology are making the retail environment highly dynamic and competitive. Retailers have access to an ever-increasing mountain of information, which ultimately should allow them to target customers selectively. Success in retailing depends on a retail manager's ability to properly interpret what changes are occurring and to build a strategy to respond to those changes (Dunne & Lusch 2014:13). Furthermore, success in retailing demands a strong customer focus with a retail strategy that provides the level of service, product quality and innovation that customers' desire. Molenaar (2015:3) further reiterates that that customers want to be known and recognised.

The retail trade industry can be defined by using the classifications from the Standard Industrial Classification (SIC) from Statistics South Africa, inter alia as the reselling (sale without transformation) of new and used goods to the general public for personal or household consumption or use by shops, department stores, stalls, mail-order houses, hawkers and peddlers, and consumer co-operatives (Anon 2012). Retail can be described as the set of business activities that adds value to the products and/or services sold to consumers for their personal use (Du Plessis et al. 2012:493). According to Du Plessis et al. (2012:492), retailing is an activity that includes the sale of goods and services to the ultimate consumer, while Dunne and Lusch (2014:2) describe retailing as final activities and steps needed to place a product in the hands of the consumer or to provide services to the consumer. Pride and Ferrell (2012:225) agrees with the above authors, but stresses that retailing must be seen as a business that focuses its marketing efforts on end consumers -with the intention of selling goods or services to them.

A synthesised definition of retail based on all definitions is: "Retail includes different business activities that focus on selling goods and or services to final consumers for own use or to be used by their families. Retailers must remain focused on the evolving and changing environment, as well as the needs of the customers, to be able to sustain their profits in a dynamic business environment".

5.2 The Shopping Centre

Shopping centres have shown the strongest growth in real estate in recent years and have become a prominent feature and integral part of the modern urban landscape (Vitorino 2012:175). Cloete (2003:80) described a shopping centre as a "deliberately planned concentration of shops (tenants) that is managed as a unit". According to the Urban Land Institute (Abghari & Hanzaee 2011:158) "the shopping centre is an agglomeration of various retailers and commercial service providers within a well-planned, designed and managed building or group of buildings". Matthysen (2016:28) agree, but add that a shopping centre is owned and managed as a single property.

The International Council of Shopping Centres (Matthysen 2016:29) describes a shopping centre as a group of retail and other commercial establishments that are planned, developed, owned and managed as a single property - with on-site parking provided. The importance of planned centres does not simply lie in their centralised control and free parking space. They differ fundamentally in size, form, location, internal structure and occupancy cost from older retail structures (Berman & Evans 2013:326). Tenant mix is well recognised as being one of the most important elements for the success of a shopping mall; however, there are no scientific models for determining an optimal tenant mix in a shopping mall (Yiu & Xu 2012:524). According to these authors, the parameters in practice are determined by gut feeling and experience. Ammani (2013:8) contributes by saying that shopping centres offer comfort, diversity, luxury, entertainment and convenience to customers.

Over the last two decades, shopping centres and retail chains have developed strong complementary bonds. Internal cooperation is needed, because each tenant depends on the total retail mix and the centre's total attractiveness in order to be able to prosper. Shopping centres have to inspire and motivate customers to visit and buy, and co-operation between shops has become essential for survival (Molenaar 2015:3). If a few stores trade poorly, it will affect the financial performance of the centre as a whole. Financially successful tenants contribute to a financially successful centre.

There are four basic types of shopping centres: convenience, neighbourhood, community and regional (which include the hypermarkets). The various types of shopping centres may be distinguished according to function, location and physical criteria (Cloete 2003:83). One of the most important decisions made by a retailer though, is store location (Matthysen 2016:30). Rix (2010:386) confirms this statement, by adding that there are three keys to success in retailing: location, location and location! According to Matthysen (2016:30), retailers have three basic categories of locations to choose from: a shopping centre, a city or town location, or a freestanding location.

According to Teller and Schnedlitz (2012:1057), the misconception about anchor tenants being the main and only driver of success, and smaller tenants being regarded as parasites, has to be resolved. Cloete (2003:399) stresses the role of independent retailers in a shopping centre and adds that they make a major contribution to the financial performance of the centre by paying the highest rentals. Simon, Frame and Sohal (2009:5650) view these independent retailers as "internal customers" whose opinion should also be heard in matters concerning the management of the shopping centre. In times of economic downturn when cost-cutting is rife, tenants become hard to find. Does good mall management imply filling all available retail space in the shopping centre? Litvin and Rosene (2017:823) commented that the shopping malls' management cannot take on tenants simply because they can afford to pay rentals. The management should strictly evaluate each tenant and determine if the tenant will be suitable for the "tenant mix".

The management of a shopping centre is a key element in the ultimate success and growth of a very expensive investment. Teller and Schnedlitz (2012:1048) view the presence of an institutionalised management team in an agglomeration as a critical success factor within the competition of shopping centres. The retailers must draw in the customers, and they ultimately determine the success or failure of the shopping centre.

Today's shopping centre management encounters many different challenges - which are to identify, understand and met the ongoing needs of consumers, retailers and the owners (Matthysen 2016:32). Damian, Curto & Pinto (2011:457) agree by saying that the challenge is to understand the different stakeholders' perspectives about what makes up a good performance of a regional shopping centre - in order to reach a consensus about shared priorities and relationships. The task of the shopping centre's management is one that

carries great responsibilities. They are responsible to the owners of the mall for high return on their investments (Damian, Curto & Pinto 2011:457) - as well as for creating an environment in which the tenants can flourish. Shopping centre management teams must aim to provide a profitable return to all, which encourages more of a relationship marketing approach (Roberts et al. 2010:602).

The management team of a shopping centre can appear to have considerable power, which they potentially or allegedly abuse on selected occasions, which could lead to a degree of tension between tenants and management (Roberts et al. 2010:597). Howard (2011:266) believes that there must be a balance of power between management and tenants.

Trust can be seen as a key element of the development of successful long-term relationships between management and tenants. Howard (2011:266) experienced mistrust of the centre by tenants. Tenants can tell when centre management lacks expertise. Retailers are in the marketing business, but not in the business of managing the centre. Howard (2011:266) found hardly any managers at any level in shopping centres, with a marketing qualification.

Singh and Sahay (2012:236) add that malls are competing against each other, because most malls have identical tenant mixes. Tenants are losing confidence in the mall's ability to increase foot counts, and ultimately decide to walk out of operational malls. Matthysen (2016:50) note that the lack of cooperation between management and their tenants shows that the parties are not seen as a "single business" unit. This does not bode well for contributing to effective marketing strategies.

The success of a business relationship lies in the development and growth of trust and commitment among the role-players (Berndt & Tait 2012:24). The tenants of the shopping centre and the management of the centre need to have shared goals and receive mutual benefit in order to build a successful relationship. The management of the shopping centres need to gather information (Howard 2011:267) about individual tenants and to be able to tailor the services rendered to them.

Consequently, mall management needs to be more flexible and treat their retail tenants differently, and should even opt for a personal touch (Simon et al. 2009:575). Tenants should enjoy more convenience and benefits (Berndt & Tait 2012:8). However, Howard (2011:267) found that partnerships between retailers and centre owners tend to be limited in a shopping centre. Howard (2011:268) also adds that it is difficult to develop partnerships focusing on mutually beneficial benefits, when the relationship between the parties is structured by the lease and other legalistic terms - rather than broader market negotiations.

5.3 The Landlord-Tenant (Management-Tenant) Relationship (B2C)

According to Beukes, Prinsloo and Pelser (2017:28) customer relationships are the most important relationships of any business and are indeed complex. In this study, tenants and shopping centre management teams have existing ideas on what to expect from these relationships. These ideas should be the basis for management/tenant relationships.

The success of a shopping centre is measured on the successes of tenants. Litvin and Rosene (2017:823) confirmed this notion and also support the joint business relationship with tenants and shopping centre owners as primary role-players. Thus, these relationships should be treated as a high priority and Howard (2011:267) suggested that a partnership approach will be applicable in the B2C context.

5.4 Relationship Facilitators

The success of a business relationship lies in the development and growth of trust and commitment among the different partners. The two parties involved also need to have shared goals and should be able to enjoy mutual benefits in order to build a successful relationship (Valtakoski 2015:108). Cowan, Paswan and Van Steenburg (2015:3) also argue that the success of a business relationship and the potential for it to grow into a partnership, will depend on more equitable distribution of benefits.

According to Berndt and Tait (2012:25), "Trust is the willingness to rely on an exchange partner in whom one has confidence; it is a generalised expectancy held by an individual that the word of another can be relied upon". Dowell, Morrison and Heffernan (2015:120) provide a more inclusive definition of trust - which is "An evolving, affective state including both cognitive and affective elements and emerges from the perceptions of competence and positive, caring motivations in the relationship partner to be trusted". These descriptions of trust also include integrity, consistency, competence, honesty, fairness, responsibility, helpfulness and benevolence. One of the consequences of trust in the relationship between the management of the shopping centre and the tenants is the probability of a lease renewal by the tenants (Roberts et al. 2010:608).

There appears to be a considerable overlap between trust and satisfaction, as they both represent a feeling or attitude about the other party in the relationship. Customer satisfaction can be seen as the customer's feeling that a product or service has met or exceeded his or her expectations (Berndt & Tait 2012:42; Munusamy et al. 2010:399). Bateson and Hoffman (2011:294) view customer satisfaction as a comparison between customer expectations versus perceptions regarding the actual product or service received. Zeithaml (1988) postulate perceived value as the customer's overall evaluation of a product based on perceptions of what is received. Ensuring customer satisfaction is critical to businesses, as satisfied customers are more likely to become loyal and are therefore more likely to be retained (Du Plessis et al. 2012:543).

People with shared goals (Valtakoski 2015:108) and values expect to receive assistance from each other; they share relevant information and trust the information they receive from each other, because it is in the interest of both parties to become effective and reach their goals (Berndt & Tait 2012:26). According to Gordon (2013:15), partnerships are reinforced through information sharing and are committed by a process of continual innovation. This goal congruence facilitates creating value for the partners involved in the relationship. Goal congruence plays a role in business relationships, given that "collaboration" is often seen as a means of reducing uncertainty, acquiring resources and solving problems. In the context of this study, Rasilt (2010:86) believes that most landlord-owners do not understand their tenants' needs, and they have no common goals.

According to Gordon (2013:17), collaboration means "creating and sharing new value with customers rather than creating and sharing new value for customers". Customers care that they receive the benefits they want. This implies that the individual voice of the customer needs to be injected into value chains - if working together is to result in benefits the customer can see. Matthysen (2016:32) believe that some tenants of shopping centres are unwilling to participate due to lack of authority, apathy or experience. This lack of cooperation shows that the parties do not see the shopping centre and the tenants as a "single" business, and this will subsequently not facilitate effective marketing strategies. The implications thereof, can be that the effectiveness of the relationship between the management of the shopping centre and the tenants is at risk - because of the lack of collaboration.

Simon et al. (2009:567) stress that communication is the most significant element in determining satisfaction and loyalty. Communication is the lifeblood of RM and the corporate world (Simon et al. 2009:564). It supports the development of the relationship, fosters trust and provides information needed to undertake collaborative activities. By establishing proper communication channels for sharing information, a business can enhance their relationship with their customers (Ashley, Noble, Donthu & Lemon 2010:750).

In the context of shopping centres, empowerment would relate to the degree to which tenants perceive that they have control in their negotiations with centre management (Roberts et al. 2010:601) - and the extent to which these tenants have expectations of their concerns being listened to. Furthermore, empowerment would also include the degree to which centre managers provide support to tenants and treat them accordingly.

5.5 Customer Retention

The goal of RM and CRM is to establish, build and maintain mutually beneficial long-term relationships with customers in order to ultimately retain them. With these efforts, businesses try to build customer loyalty by means of their relationship marketing efforts. Customer retention refers to focusing business marketing efforts toward the existing customer base (Bateson & Hoffman 2011:388). More specifically, in contrast to looking for new customers, businesses engage in efforts to satisfy existing customers (Du Plessis et al. 2012:551) - with the intent of developing long-term relationships with them (Hult, Tomas, Pride & Ferrell 2012:481). Du Plessis et al. (2012:524) claim that businesses stand to lose up to 50% of their customers over a five-year period, and it costs as much as six to seven times more to acquire a new customer than to keep existing ones. They confirm that businesses should therefore concentrate on building relationships with existing customers, rather than continuously trying to attract new ones.

 

6. METHODOLOGY

Research was conducted in the social world and was theoretical in nature - using the qualitative research paradigm as a starting point. The researcher conducted personal interviews with three members of management of regional shopping centres, as well as six tenants, to establish the variables essential for securing their complex relationship, and to identify problem areas in their relationships. Thereafter, the researcher also conducted quantitative research by constructing a questionnaire which contained the essential ingredients of a relationship. Questionnaires were distributed to willing independent tenants of selected regional shopping centres.

This study focused on a descriptive design, which described phenomena without establishing an association between factors (Leedy & Ormrod 2013:205). The emphasis was on an in-depth description of a specific situation, organisation or attitudes (Leedy & Ormrod 2013:206). The researchers wanted to determine the "nature of how things are" - by describing the relationship between the tenants and the shopping centre management team. This empirical study focused on independent mall tenants of three regional shopping centres in the Western Cape. The unit of analysis was represented by the tenants and the management of these three regional shopping centres.

The population relevant to this research consisted of mall tenants of regional shopping centres in the Western Cape. A regional shopping centre is a shopping mall which is designed to serve a larger area (25 km) than a conventional shopping mall, and with a gross leasable area of 37 000 to 74 000 m2 and with at least two anchor stores (Prinsloo 2010:25). SSAs' midyear population estimates (2015:2) reflect that the Western Cape Province will have a population of approximately 11.3 million people. It is the fourth most populous province of South Africa and covers an area of 12 946 km², and comprises 10,6% of the country's total land area. According to Prinsloo (2010:25), there are approximately 332 shopping centres in the Western Cape - of which six can be classified as regional shopping centres. The six regional shopping centres include 928 tenants (Figure 1).

The samples and sample type used in this research study was non-probability sampling, and the method used was purposive convenient sampling. The researchers identified 118 independent retail tenants who are "typical" of a group and who represent diverse perspectives on the issues of relationship marketing. Data collection was two-fold. A mixed method approach was followed, resulting in the following: face-to-face semi-structured interviews with one management member of each regional mall, and two similar interviews with independent tenants in each mall. Relevant business relationship variables were identified after transcript analysis, and were then used for quantitative purposes.

A questionnaire was designed in order to achieve the aim of collecting accurate, reliable and specific information. Respondents who would not complete the questionnaire amounted to 21,2%. 118 Questionnaires were distributed to respondents. Due to certain questionnaires not being completed or not being completed in full, the total usable questionnaires obtained was 93, thus culminating in a realisation rate of 78,8%. Section A comprised business data of the respondents. Section B.1 and Section B.2 consisted of a four-point itemised Interval Scale based on 15 items consisting of relationship variables. Responses on the scale range from 1 = strongly disagree to 4 = strongly agree. Section C comprised the demographic details of respondents.

Frequency tables were used as a descriptive tool to provide data about the demographic details of retailers. SPSS (2016) was used to perform the data analysis. Exploratory factor analysis was also conducted to examine the way items are correlated with one another, and to identify the number of factors and what they have in common. Reliability tests such as the Cronbach's Alpha were done to determine the internal consistency of the relationship variables. Data analysis also included T-tests to determine the statistical and practical significance of the data, and the analysis of variance (ANOVA) to determine whether the means of the different groups were equal and could therefore be generalised.

 

7. RESULTS

7.1 Demographic Profile of Respondents

The respondents were classified according to gender; age, level of education, home language, and how far they travel from home to reach the shopping centre (see Table 1). Each demographic variable analysed indirectly contributes to the objectives of the study.

7.2 Demographic Profile of Business Units

The business units were classified according to their role in outlet, years in retailing, years as a tenant, regularity of visits, input in marketing and the communication methods use (see Table 2). The profiling of the business unit entities ultimately contributes to the question of whether there is a "satisfactory relationship" between the role-players.

7.3 Qualitative Relationship Variables (B1)

Respondents were asked to indicate their level of agreement on selected statements with regard to their relationship with shopping centre management. The frequency and descriptive statistics of each question are displayed in Table 3. The results reflect the percentage of respondents that chose each option for each of the items. The mean values within the qualitative relationship variables ranged from 2.71 to 3.13 - i.e. tending to agree. The highest frequency of responses on the relationship variables was on the Agree options. The percentage of respondents choosing these options ranged between 43,0% and 68,8%.

The results are based on an Interval Scale that was coded as: 1 - strongly disagree, 2 -disagree, 3 - agree, and 4 - strongly agree. The statement ("centre management provides a clean shopping environment within which tenants can trade successfully") reflected the highest means call (3.13). Table 3 results' reflects a positive response to "agree" among the qualitative relationship statements. In general, this result accumulatively contributes to the answering of the research question.

The statement, "the tenants and management of this shopping centre trust each other" produced the highest single scaled item - with a result of 68.8% - agree, which is represented visually in Figure 2 (below).

7.4 Secondary Relationship Variables (B2)

In Table 4 (below), the results reflect a positive response to "agree" among the secondary qualitative relationship statements. In general, this result also accumulatively contributes to answering the research question. The mean values of the secondary relationship variables ranged from 2.80 to 3.05.

7.5 Validity of the Factors

For the purpose of this study, a factor analysis was conducted in order to determine whether groups of people emerged with similar opinions. Thereafter, these emerged groups were demographically profiled.

Table 5 (below) reflects the KMO, Bartlett's test communalities for the relationship variables (B1) of the questionnaire. The Kaiser-Meier-Olkin (KMO) measure, measures sampling adequacy. Sample adequacy, according to Field and Miles (2010:25), reflects the ability of a sample to contain the organism of interest. A result <0.5 is perceived as not acceptable; between 0.5 and 0.7 is medium; 0.7 to 0.8 is good; 0.8 to 0.9 is very good, with >0.9 being superb. The returned result was .880. This indicates that the sample size was acceptable. A Bartlett's test was also conducted. Field and Miles (2010:25) state that it measures whether the correlations between the items are high enough; the p-value returned must be lower than 0.05 to reflect adequate correlation. This analysis returned a p-value of < 0.05. This shows a high enough correlation between the section items.

Communalities in Table 5 reflect the proportion of the item's variances explained by the factors. All communalities must be above 0.3 (Field & Miles 2010:25). All the communalities for this analysis were above 0.3 - and this shows that the proportion variance of the item, as explained by the factors, is sufficient. Lastly, the determinant indicated a value of .004, which indicates that there was not a high correlation between the questions. If the determinant is greater than 0.00001, there is no severe multicollinearity (Field & Miles 2010:445). The results indicate that the items of Section B1 could be grouped together as one factor. Because no pattern matrix emerged from the factor analysis, only one factor could be extracted.

Table 6 (below) reflects the KMO, Bartlett's test and communalities for the secondary relationship variables (B2) of the questionnaire. The returned result for the KMO was .854. This indicates that the sample size was acceptable. This analysis returned a p-value of <0.05 for Bartlett's test. This shows high enough correlations between the section items. All the communalities for this analysis were above 0.3, and this shows that the proportion variance of the item, as explained by the factors, is sufficient. According to Mvududu and Sink (2013:92) if the communality of a variable is high, it means that this particular variable is reflected well via the extracted factors. Lastly, the determinant indicated a value of .023, which indicates that there was not too much correlation between the questions. Only one factor could be distracted based on the fact that no pattern matrix emerged from the output.

7.6 Reliability

Table 7 (below) indicates Cronbach's alpha for the factor extracted from the variables of Section B1 and Section B2. The Cronbachs' alpha coefficient was calculated for one factor containing all 10 variables in Section B1, and one factor containing the five variables of Section B2. Table 7 reports Cronbach alphas of .906 and .919, thus above 0.7, and the factors can therefore be considered as reliable measures. These variables will consequently be treated as single factors going forward - namely primary (factor extracted from B1) and the secondary relationship variable (factor extracted from B2).

7.7 Comparative Analysis

Welman, Kruger and Mitchell (2012:237) proclaim that inferential research comprises comparing the mean of one group with the mean of another, and for this reason t-tests and analysis of variance (ANOVA) were appropriate inferential techniques to consider. Since a non-probability sample was used, statistical inference conclusions cannot be drawn; effect sizes were used to determine the practical significance of any associations that might exist -as suggested by Ellis and Steyn (2003). If the p-value is less than 0.05, the researcher has enough evidence to say the population means are different. The p-value indicates a statistically significant difference between the means, and this is indicated by the p-value <0.05 (Zikmund & Babin 2012:380).

Statistical significance does not necessarily imply that the result is important in practice. Therefore Cohen's d-value has also been calculated to determine practical significance. Values >0.2, 0.5 and .0.8 reflect small, medium and large differences respectively. These also indicated practically non-significant, practically visible and practically significant differences (Ellis & Steyn 2003). Table 8 (below) reflects the results of the ANOVA, comparing the difference in opinions per regional shopping centre regarding the primary (factor extracted from B1) and secondary relationship variable (factor extracted from B2).

The mean value of the primary and secondary relationship variables of Mall 1 (2.69 and 2.70) are the lowest of the three shopping centres and this indicates that Mall 1s' retailers are less content with their centre management compared to the retailers in the other two malls. However, all three shopping centre means (2.69 - 3.07) indicated that, on average, respondents agreed with the statements made. The effect sizes comparing Mall 1 with the other two shopping centres ranged between 0.45 - 0.60, thus indicating medium effects or practically visible differences.

 

8. DISCUSSION

From the statistical analysis conducted, the following conclusions can be drawn to address the primary and secondary objectives of the study:

In this research study, 68,8% of respondents indicated they believe trust to be the most important factor contributing to a successful business relationship. More than half of the respondents also confirmed that they have confidence in the management of the shopping centre (primary objective). Respondents (54.8%) also indicated they would prefer a visit from centre management once a month (primary objective). Communication was also identified as a key factor contributing to a successful B2C relationship. Independent tenants (62.5%) prefer an email from management and agreed that centre management communicates effectively with them (primary objective).

Almost 50% (41.9%) of tenants would like to be involved in the marketing of the shopping centre. These independent tenants interact with customers daily and would be able to share very relevant information with management which supports their need to work together with management to reach goals (secondary objective 2). Most respondents (63%) indicated that they manage these outlets. This implies that they are actively involved in the running of the business and should interact with management regularly. This might further imply that independent tenants would like to cooperate with centre management to achieve mutual benefits, because less than half the respondents indicated they do not share common goals and values with management (primary objective; secondary objective 2). Centre management does not respond within 24 hours to their concerns, despite having made promises to do so (secondary objective 3).

More than half of these tenants agreed that management share relevant information with them (secondary objective 3). More than half of the independent tenants experience an open-door policy from management (secondary objective 3); 25% of tenants do not agree that centre management listens to their concerns (secondary objective 3); and 52.8% of independent tenants had not been a tenant of the specific shopping centres for more than five years. This could indicate that these tenants do not perceive market-related rentals. This could also imply that there might be a few reasons (such as their relationship with management, dissatisfaction) why so many independent tenants do not renew their contracts with specific shopping centre. Only 5,5% of respondents were tenants for more than 24 years (secondary objective 4).

More than half the tenants are very concerned with the overall security of the shopping centres (secondary objectives 3 and 4). Furthermore, more than half the tenants agreed that centre management provides a clean shopping environment (secondary objectives 3 and 4). Tenants also agreed that they are management's most important customers (secondary objective 4). Tenants mostly agree that shopping centre management ensures a wide enough range of tenant mix (secondary objective 4).

 

9. MANAGERIAL IMPLICATIONS AND RECOMMENDATIONS

The following three categories of recommendations could assist shopping centre management teams build long-term relationships with their retail tenants:

Relationship management: Customer relationships are the most important relationships of any business (Beukes, Prinsloo & Pelser 2017:28) and indeed complex. In this study, tenants and shopping centre management teams have existing ideas of what to expect from these mentioned relationships. With reference to the survey, 68,8% of respondents indicated that they believe trust to be the most important factor contributing to a successful business relationship. Respondents (54.8%) also indicated that they would prefer a visit from centre management once a month. Communication was also identified as a key factor contributing to a successful B2C relationship. Independent tenants (62.5%) prefer an email from management and agreed that centre management communicates effectively with them. It is recommended that management needs to build personal relationships with the individual tenants by sharing experiences and ideas in order to learn more about each other. This will enhance trust and mutual respect between the two parties. A relationship develops over time and management needs to actively schedule or make time to build relationships with their tenants.

Collaboration: The success of a shopping centre is measured on the successes of their tenants. Litvin and Rosene (2017:823) confirmed this notion and also support the joint business relationship with tenants and shopping centre owners as primary role players. Matthysen (2016:134) suggested that a partnership approach will be applicable in the B2C context. Almost 50% of tenants would like to be involved in the marketing of the shopping centre. These independent tenants do interact with customers daily and would be able to share very relevant information with management which supports their need to work together with management to reach goals. The majority of respondents (63%) indicated that they manage these outlets. This implies that they are actively involved in the running of the business and should interact with management regularly. This might further imply that independent tenants would like to co-operate with centre management to achieve mutual benefits, because less than half of the respondents indicated that they do not share common goals and values with management. Management and tenants should set mutually-beneficial goals and they need to work closely together in order to build success.

Partnership success: In the Model of Partnership Success, Mohr and Spekman (1994:136) used two indicators of partnership success; an objective indicator (sales volume flowing between dyadic partners) and an affective measure (satisfaction of one party with the other). Attributes of partnership success include commitment, co-operation, interdependence and trust, communication and conflict resolution techniques were identified as essential components of the partnership success model. Communication is the lifeblood of relationship management and the corporate world (Simon et al. 2009:564). In this study the majority of respondents indicated that centre management does not respond within 24 hours to their concerns, despite having made promises to do so. Not all of the tenants agreed that management share relevant information with them or experience an open door policy from management, with 25% of tenants that do not agree that centre management listens to their concerns. It is thus vital for the management of the shopping centre to determine each individual customer's needs, in order to offer tenants support in an honest, kind and helpful way. It is further recommended that centre management must be visible. Management need to show their interest in the performance of their tenants. For example, management needs to address their concerns within 24 hours and listen carefully to their concerns. The management of the shopping centre needs to show empathy to enable these tenants to see the situation from another's perspective. Tenants need to feel wanted and need to be treated with respect.

 

10. LIMITATIONS AND IMPLICATIONS FOR FUTURE RESEARCH

Quality secondary sources of a scholarly nature on the South African retail industry are limited, which meant that the researcher had to base discussions on available literature from service industries. Existing research on CRM and RM and the South African retail industry is also limited, which implies that the researcher had to rely on other service industry sources (mainly found in the banking industry) - and apply this to the South African retail industry. A limited amount of literature on retail tenant retention, loyalty and trust in a South African retail industry context, is available.

The empirical study was based on a non-probability purposive and convenience sampling, and thus no generalisations could be made beyond those who participated in the research study. The geographical boundaries of this study were also limited to three regional shopping centres in the Western Cape, South Africa, and a sample size of 93 may not be large enough to draw any accurate and conclusive results.

The study presents an opportunity for a similar study to be replicated in the other provinces of South Africa, as well as in different shopping centre sizes. Further research can be conducted to determine which factors anchor stores believe build and maintain trust in a shopping centre.

 

11. CONCLUSION

This article aimed to present the key principles required for maintaining a satisfactory relationship between the tenants and the management of the shopping centre - to ensure sustainability for both the role-players. To support the primary objectives, several secondary objectives were attained, such as determining the tenants' perceived relationship with management and determining tenant's expectations regarding their relationship with management. The results indicated that the tenants believe that trust is the primary component of a possible long-term relationship. If shopping centre management applies the recommendations, this could potentially improve their relationship with tenants.

 

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* corresponding author