No matter how you look at it, we have a problem here in Malaysia, there are too many developments which have or are planning to have a retail component within their development plans. Couple that with a recent Star newspaper article which stated that for 2017 retail sales in Malaysia were down 1.1% in Q3.
Both these 2 components coming together has resulted in “malls” which are opening up fast and closing down just as quickly. Case in point would be malls such as SS2 which have opened and closed and malls which are looking as if they are in trouble such as Evolve Shopping Mall.
So, when we took a long hard look at the state of things we began to think about what can a mall which is already in operation do in order to avoid this “retail apocalypse” which seems to be upon us.
We have identified 3 potential things which the mall management can do to avoid the fate of shutting down and the first being the mall management needing to look into the concept Experiential Retailing.
Focus on Experiential Retailing
So what is Experiential Retailing? Very simply, it’s about making the visit to the mall for shoppers more than just transactional (i.e. buying and selling).
Transactional buying and selling in our opinion has been taken over by the outlet stores such as Mitsui Outlet Park, Genting Premium Outlets and the like where shoppers know they are there to look for a good bargain. As such, the conventional mall cannot hope to target these exact types shopper and hopefully survive. There is a fundamental need for us to transform the shopping mall from a place just to buy (i.e. transactional) to a place to be (experiential). Thus, the mall management needs to work with its tenants to create spaces and experiences within the mall which excite all the 5 senses of its shoppers. A few prime examples who are already moving in this direction such as 1 Utama with its Air Rider and Flow Rider experiences and also MidValley with its VR (Virtual Reality) space called The Rift.
In order for us to fully transition into bringing Experiential Retail into the mall environment; we need to first and foremost understand our shoppers journey, as in what are they really looking for when visiting our mall? Is it for entertainment, food, relaxation? Without a keen insight into the minds of our shoppers, simply inserting any type of Experiential Retail could prove potential fatal and not to mention costly.
Another great example of a mall which has successfully integrated tenants who practice Experiential Retailing is the Central Festival Eastville in Bangkok with its Think Space B2S which is a 3000 square meter lifestyle store filled with with books, magazines, stationery items, travel accessories, art supplies, headphones, speakers, CDs, vinyl and even home accessories. The space boasts plenty of spots to relax & read or if you prefer small workstations for you to work out of whilst sipping on your Starbucks Reserve latte.
Introduce Hybrid Retailing
Just as shoppers today want to be engaged when they head to the mall, the way we shop is also changing. Shoppers heading to the mall today have changed their reasons for visiting and they expect to be greeted by in-store activations that are convenient, agile & hyper-personalised.
On top of that, shoppers who visit retail stores within the mall environment expect to be rewarded by loyalty and some even hope to complete a journey which began online to offline. So, what does this mean for the mall management? It stresses very much on the idea that the mall leasing needs to identify tenants which bring something new to the way they do business through a mix and match of different concepts to create new retail experiences for their shoppers.
This concept is called “Hybrid Retailing” and some examples of retailers which practice this concept are like The Store in Berlin which houses a mix of a departmental store, café, hair salon, co-working space and more to create a unique and totally new retail experience for shoppers. An example closer to home would be retailers such as Jaya Grocer and Ben’s Independent Grocer whose traditional supermarket shopping experience have been further enhanced by the inclusion of food & beverage outlets within the space to create a more diverse and complete shopping experience for shoppers who seek to buy fresh groceries and fill their tummies all at the same space.
Regardless on what you think, concepts such as Hybrid Retailing are essential for the long-term survival and growth of your mall. The ability of the mall leasing team to adapt to market changes and get creative with their tenant mix will ensure customers keep coming back to the mall time and again.
Position the mall as a space for Exploration
Shoppers today want to be greeted by in-store activations that are convenient, agile & hyper-personalised. What this means is that sometimes your mall needs to have spaces which encourages shoppers to explore the space. This can be achieved through the use of interesting pop up stores which are small and unconventional with the aim of creating a sense of something new and exciting within the mall. Pop Up Stores can be a truly amazing opportunity for the mall management to even try out first time retailers who do not have a retail footprint in malls and convert them into tenants later should they (i.e. Pop Up store tenants) prove a hit with shoppers.
Introducing these Pop Up stores are also a great way to generate more footfall traffic into mall especially when these Pop Up Stores are brought in during the holiday season.
Besides Pop Up stores, the mall management could also use dead spaces within the mall to create pickup points for online vendors such as Lazada or Pos Laju. The purpose would be to get online shoppers to set foot into the mall to collect or drop off their packages which they could also foreseeably see these shoppers patronizing the Food & Beverage tenants as well as other service based tenants such as a visit to the salon or cobbler.
A good example of this is Amazon which has significantly increased their retail footprint with brick and mortar stores in the last few years. The reason for this? Amazon understands that having a physical store will allow customers to explore its products and find new target customers who do not traditionally purchase online to start trying out the process.
With the pace of development not looking to slow down anytime soon, it is important for mall owners to fully understand the current market climate in which they operate in. There is an inherent need for malls today to look at their properties as product offerings and to undertake a product differentiation study to understand how they are different from other competitor malls around the area or nearby.
A key failure to do this and to look at the 3 strategies as outlined above could be detrimental to the future of the mall property in question and ultimately result in significant losses. Malls that choose to explore and implement all or a combination of these strategies are sure to be able to survive and thrive in this new retail norm.
Connect with me in the comments section if you have more questions about this article or even your thoughts on this piece. Please feel free to share this piece with your friends who are in the retail business. For more questions about how a retail coach can help in your business, connect with me at firstname.lastname@example.org #VisCreative #DesignProfitableSpaces #Retail #Business #Money #Mall