Parque Arauco
PROMOTING ENTREPRENEURSHIP, CHILE
Parque Arauco is one of the largest shopping malls companies from Chile, with dozens of shopping malls distributed in Chile, Peru and Colombia.
In 2019 the retail industry was hit hard in Chile due to the social uprise which led to months of protests across the country and an overall a negative perception of the government and big corporations, such as shopping malls. Then in 2020 Covid-19 hit and the whole country went into lockdown, forcing Parque Arauco to shut down the malls.
The pandemic left many people in Chile unemployed, many of whom decided to start their own businesses. 2020 was a record year in Chile in terms of new business creation. This scenario changed the make-up of the local retail industry, and if Parque Arauco wanted to be able to take part in this renewed retail scene, they needed to reinvent their value proposition.
To learn more about Parque Arauco go to www.parquearauco.cl
The challenge
For decades Parque Arauco had brands of all sizes queuing to be in their malls. However in 2019 that changed. New brands appeared and they took over the online shopping scene in Chile and when asked if they would like to be in a mall, the answer was no.
These new players have different expectations for their businesses. They were born in an era where everything is customisable to their specific needs, everything is immediate and they have access to multiple B2B services that are either free or low cost and provide a great user experience.
The physical retail world is the opposite of that. In order to open a shop or a kiosk in a mall, business owners must build the shop from scratch which is very expensive and time consuming. They also need to commit to long rentals and follow very strict rules around how to run their businesses and show their brand to the world.
Many of the small businesses who adventure to open a shop in a mall feel they are the ones taking all the burden and the risk, and most of the time they really struggle to succeed in such constrained environment.
How might we create a space in the malls to promote entrepreneurship and help small business owners to grow and consolidate their businesses?
The outcome
After months of field research and multiple co-creation workshops we created Arauco PopUp, a new business unit that facilitates plug-and-play spaces which small businesses can rent for short periods of time and customise to take their brands off the screens and into the real world.
Arauco PopUp reduces the burden on the entrepreneurs, allowing them to try out the physical world without compromising the financial health of their business. At the same time, Arauco PopUp provides a series of digital tools to help small business owners succeed in the mall environment.
We tested Arauco PopUp in one of the most iconic shopping malls in Santiago: Parque Arauco Kennedy. And the results were extremely positive for both Parque Arauco and the small business owners.
For Parque Arauco, we reduced vacancy in the mall at the same time that we augmented their service portfolio trough a meaningful experience for a growing segment, creating a new source of income that supports local businesses and uses circular economy as the foundation for its operations.
For the business owners, Arauco PopUp proved to be efficient in reducing the time and costs to enter the mall and it was more effective in terms of sales. On average, an Arauco PopUp client made 76% more sales than their "non-PopUp" competitors in the same mall, in a similar location.
During 2022 Parque Arauco is planning on expanding Arauco PopUp to several new locations in Chile.