Analysis on the Management Performance of
Outlet Shopping Mall.
-Focusing on the Method of Hierarchical Fuzzy DEA-
Lee, Uk Jae
Department of Real Estate,
Graduate School, Kangwon National University
Abstract
Domestic outlet distribution began in 199...
Analysis on the Management Performance of
Outlet Shopping Mall.
-Focusing on the Method of Hierarchical Fuzzy DEA-
Lee, Uk Jae
Department of Real Estate,
Graduate School, Kangwon National University
Abstract
Domestic outlet distribution began in 1994 with the concept of outlet mall in the form of department stores. Since the 2000s, it has first emerged in the form of downtown outlets oriented for inexpensive brand such as the Dangsan branch of 2001 Outlet, the Incheon branch of New Core outlet, and the Seongnam branch of Save Zone. Later, with the opportunity of opening the suburban premium outlet shown by Shinsegae in 2007, outlet shopping malls have been spreaded throughout the country, becoming a major distribution channel. Meanwhile, as department stores are in recession and recognized as a new distribution channel, they are reorgznied into Shinsaege, Lotte Shopping and Hyundai Department Store so called "retail conglomerate-oriented specialized outlet shopping malls". Outlet distribution has maintained a high growth rate over the last 10 years but inefficient stores are being emerged due to excessive competition among distribution companies, excessive opening of outlets without considering location conditions, and the spread of non-face-to-face distribution industries such as online, etc. As of 2019, the number of outlet shopping malls throughout the country is about 190. As such department stores and complex shopping malls are excessively rolled out or without any consideration on the location factors, the profitability of stores are getting worse.
In this study, DEA efficiency assessment techniques were used in order to analyze the Competitiveness of Outlet Shopping Mall which occupies important part in the domestic distribution industry and present the cause of inefficiency and mprovement plan. To supplement the analytical limitations of traditional DEA analysis, AHP weight analysis and HFD analysis using the fuzzy method were performed are combined. On the other hand, the outlet shopping malls are typical location-oriented type of business such as department stores and large discount stores, efficiency cannot be fully described only by the internal factors of the store. In this study, from the perspective of location competitiveness, we divided the individual outlet shopping malls per land use district and compared each differences.
The results of the analysis in this study are: first, as the result of the analysis on the efficiency with only DEA internal factors, the efficiency value corresponds to 0.748, [quasi-efficiency], and the resulting value of the efficiency which considers the external variables is 0.804, indicating that the efficiency value may vary with the adoption of the variables. Second, based on the AHP survey results of a group of distribution experts, the weight of each factor was calculated and the importance of the external factor was the population(33.7%)> the rate of supplying the road(26.8%)> the land cost(25%) > the income(14.5%). The importance of internal factors was the number of brands(35.3%)> the business area(27.4%)>the number of F.N.B stores(14.8%)>the number of parking cars (9.3%). After the application of this to the DEA weight analysis, it was shown that the efficiency value was 0.733. In particular, DMU whose characters of efficiency changed compared to the results of existing DEA analysis, had 19 stores, and the limitations of traditional DEA analysis, in other words, problems with the discrimination between DMUs and the mistake of recognizing inefficient DMUs as efficient DMUs are solved while it improves the accuracy of the efficiency assessment by applying the weight by AHP factor. Third, the relative importance induced with AHP dual comparision matrix calculated the weight of each factors by using Chang(1996)'s Extent Analsis Method. The weight value of the external factor is the number of population and road(31.4%) > Land cost (27.5%) > income (9.7%). Population (-2.3%), roads (4.6%), land (2.5%), and income (–4.8%) are calculated rather than the preceding AHP weights so that the order of importance by factor was the same, but the difference between the AHP weights in population and income was identified. In other words, traditional DEA analysis could not accurately distinguish the efficient store through relative evaluation between DMUs by applying the same weights, and the more specifically the weight per factors of the evaluation standards is applied, the more accurately the efficiency can be evaluated. The degree of inefficiency increase so that it is possible to select the best DMU objectively and benchmark it.
The analysis of store efficiency from the perspective of location competitiveness is: first, efficiency by land use area is high in the order of planned management area > industrial areas > commercial areas > residential areas > natural green areas. The efficiency values for the DEA, AHP-DEA and HFD analyses in the planned management area are 0.926, 0.884, and 0.856 respectively. The area where the outer premium outlet is mainly located are Yeoju and Siheung Shinsegae Simon Premium Outlets in Gyeonggi Province and Lotte Outlet in Buyeo, South Chungcheong Province. In the case of industrial sites, the efficiency values are 0.993, 0.901, and 0.836 respectively, and Gasan-dong in Geumcheon-gu, Seoul, is a representative industrial area. The area called Guro Industrial Complex was constructed as the first light industrial complex in Korea by the government's policy, and so textile, clothing, and sewing factories were located. Its advantages are low land costs and abundant related infrastructure, including transportation and labor. The efficiency of commercial land is 0.791, 0.707, and 0.628 respectively. It was found to be less efficient than industrial sites and planned management. The reason why the area is low efficient despite the large floating population like the central and general commercial areas is that the customers are dispersed to different areas because of excessive competition between retailers. The proliferation of suburban premium outlets and complex shopping malls is driving down sales in adjacent urban outlets, and the decline in offline sales is considered to be the main reason due to the increase in online shopping over the past decade. Second, in the case of commercial areas with the largest number of outlet shopping malls in this study, it was shown that 30 out of 32 stores, about 94% were inefficient. In addition, inefficient DMUs that were not identified in the DEA analysis were recognized with the use of the AHP-DEA and HFD techniques. Third, as the result of classifyingother outlet shopping malls by types, it was turned out that suburban premium outlets are more efficient than urban ones, and that the larger the area is, the more premium outlets are concentrated, and the more brand contents lead to the more efficiency. Suburban premium outlets are more efficient compared to urban premium outlets where spatial constraints and competition among the retail industry have been intensified.
The implications of this study are: first, the value that the content of commercial real estate will provide to shoppers must be clearly established. Second, it is necessary to accurately understand the recent trends of consumption and apply them to configurations of store tenant. Third, offline stores also need to reconsider their business paradigm for continuous growth of non-face-to-face online sales. This also includes improvements based on Omni Channel. Fourth, distribution companies that are preparing to open new stores need to actively utilize undeveloped areas that have been incorporated into state-owned land in the city center, such as suburban areas, railway sites, and history instead of more competitive downtown commercial areas. Fifth, location competitiveness is not created as a temporary effort in the early stages of development. It also need to accompany continuous investment and improvement efforts. Sixth, in order to accurately evaluate the efficiency of the assessment target, it is useful to analyze both the internal and external factors of the assessment. It is also necessary to supplement the limitations of traditional DEA analyses with AHP-DEA and HFD methods using fuzzy techniques.
keywords : Efficiency, DEA, AHP-DEA, HFD, Location, Outlet Shopping Mall