Parque Arauco
PROMOTING ENTREPRENEURSHIP, CHILE
Parque Arauco stands as a leading figure in the Chilean shopping mall industry, with an expansive portfolio across Chile, Peru, and Colombia. In 2019, the retail sector in Chile faced significant challenges due to a widespread social uprising, leading to extensive protests nationwide. This period marked a shift in public sentiment against the government and large corporations, including shopping malls. The situation further intensified in 2020 when the COVID-19 pandemic prompted a nationwide lockdown, necessitating the temporary closure of Parque Arauco's establishments.
The pandemic's economic impact was profound, resulting in widespread unemployment across Chile. However, this adversity sparked an entrepreneurial spirit among many, leading to a surge in new business ventures. The year 2020 set a record for the highest number of new businesses established in Chile, significantly altering the landscape of the local retail industry.
In response to these unprecedented changes, Parque Arauco recognised the need for a strategic transformation. To remain a key player in the evolving retail environment, the company was compelled to rethink and revitalise its value proposition, ensuring its offerings resonated with the new retail dynamics and consumer expectations.
For more detailed information about Parque Arauco, please visit www.parquearauco.cl
The challenge
For decades, Parque Arauco was a coveted location for brands of all sizes. However, the landscape shifted dramatically in 2019. The rise of new brands, primarily operating online, transformed the retail scene in Chile. When these emerging brands were approached about establishing a presence in malls, their response was overwhelmingly negative.
These modern entrants have set distinct expectations for their ventures, having emerged in an era characterised by customisation, immediacy, and access to a variety of B2B services that are either free or cost-effective while offering exceptional user experiences. Contrastingly, to establish a presence in a mall, business owners face the daunting task of constructing their shops or kiosks from the ground up—an endeavor that is both costly and time-consuming. Additionally, they are required to commit to lengthy lease terms and adhere to stringent regulations governing their operational practices and brand presentation.
Many small business owners who dare to venture into mall-based retail feel overwhelmingly burdened and at risk, often struggling to thrive in such a restrictive environment.
How can we innovate within mall spaces to foster entrepreneurship, providing small business owners with the support they need to flourish and solidify their ventures?
The outcome
Following extensive field research and numerous co-creation workshops, we introduced "Arauco PopUp," a novel business unit designed to offer turnkey, customisable spaces that small businesses can lease for short durations. This initiative enables entrepreneurs to transition their brands from the digital realm to the physical world effortlessly.
Arauco PopUp significantly alleviates the challenges faced by entrepreneurs, offering them the opportunity to explore brick-and-mortar retailing without jeopardising their business's financial stability. Additionally, this venture equips small business owners with an array of digital tools aimed at enhancing their success within the mall setting.
Our pilot launch at Parque Arauco Kennedy, one of Santiago's most renowned shopping malls, yielded overwhelmingly positive outcomes for both Parque Arauco and the participating small business owners. For Parque Arauco, Arauco PopUp not only minimised vacancy rates but also enriched its service offerings by delivering meaningful experiences to an expanding market segment.
This initiative has emerged as a new revenue stream that supports local enterprises and embraces the principles of the circular economy in its operations.
For the business owners, Arauco PopUp has proven to be an effective solution, minimising entry time and costs associated with mall presence and demonstrating superior sales performance. On average, businesses participating in Arauco PopUp experienced a 76% increase in sales compared to their counterparts not utilising the PopUp model, despite being situated in comparable mall locations.
Since then, Parque Arauco has continued to extend the Arauco PopUp concept to additional locations throughout Chile, further supporting the growth and development of small businesses in the region.
This project consisted of
Design Research
Strategy
Service and Product Design
