Retail malls evolve beyond transactional model to keep apace of disruption
SINGAPORE, 21 October 2019 – As landlords and retailers come to terms with the disruption posed by e-commerce, malls are rapidly evolving beyond a transactional model to embrace community building through experiential and activity-based concepts.
While Singapore’s GDP and household incomes have steadily recovered since the 2009 global financial crisis, rising at a compounded annual growth rate (CAGR) of over 4%, retail and F&B growth has however not kept pace, with annual growth barely reaching 2% over the same period.
In a bid boost footfall, maintain high occupancy rates and shore up tenant sales and operating profits, malls are adding communal spaces and non-retail components into their mix, with the aim of creating communities within their premises.
“Online commerce has given consumers an unprecedented luxury of choice and convenience through social shopping, peer-to-peer influence and round-the-clock access to vast repositories of information,” said Ms Ong Choon Fah, EDMUND TIE’s chief executive officer.
“In response to the changing landscape, landlords and retailers are giving customers reasons to visit over and over again. Physical retail is differentiating itself by furnishing experiences that their online counterparts can’t offer, and integrating online-offline retailing by adopting an omnichannel approach,” she added.
Increasingly, malls are featuring focal points – which may not even be retail in nature – around which people can gather. The recently reopened Funan Mall, for example, offers a publicly accessible rooftop Urban Farm, rock-climbing facilities, a futsal court and even an indoor cycling track on top of an impressive array of F&B outlets and flagship brands. From a nondescript lineup of IT stores, Funan has evolved far beyond a hangout for techies to become a vibrant space where shoppers, families and hobbyists can shop, eat and play.
The iconic Rain Vortex, the world’s tallest indoor waterfall at Jewel Changi, attracts huge throngs seeking “Instagrammable moments”, while the mall’s Canopy Park and Hedge Maze are compelling play attractions designed to encourage consumers to step out of their homes and return to the shopping centre.
In line with the town-centre concept, the award-winning The Commons community mall in Bangkok likewise features ample room, amounting to some 5,000 sq m (or 53,800 sq ft), for open communal uses including family-friendly play areas and space for regular events and activities such as cooking workshops, live music and community gatherings.
In addition to community building, pop-up retail, which originally served as testbeds for new products or e-businesses taking a leap into brick-and-mortar, is now fast gaining traction even among established brands, and offers another avenue through which physical retail can attract footfall.
Ms Chua Wei Lin, EDMUND TIE’s executive director and regional head of business space said: “Defined by a continually changing mix of merchants and brands, pop-up retail gives malls the opportunity to offer additional options on top of their existing retail mix. Its ever-changing nature creates a sense of novelty and excitement that will attract shoppers.”
Funan’s Tree of Life, for example, is an impressive centerpiece that comprises 20 retail pods, allowing both emerging and established brands to showcase a variety of products and services for limited periods before being refreshed again. Bangkok’s ICONSIAM likewise offers SookSiam, a co-creation and cultural space spread over a sprawling 16,000 sq m (or 172,200 sq ft), which rotates indigenous entrepreneurial set-ups for maximal diversity.
“Notwithstanding geopolitical, macroeconomic and technological headwinds, physical retail remains highly relevant,” said Ms Ong. “In 2018, brick-and-mortar stores accounted for more than 90 per cent of retail sales, and the importance of physical retail is further corroborated by the fact that established online merchants – such as Taobao and Love, Bonito – have expanded into physical stores. Indeed, malls are now evolving to become the third place where people gather to relax and socialise.”
For further information, please contact:
Wong Wei Chen
Senior Manager, Corporate Communications
O: +65 6393 2369
M: +65 9220 3780
Executive, Corporate Communications
O: +65 6393 2510
About EDMUND TIE
EDMUND TIE is a full-service, real estate consulting firm with more than 400 skilled professionals in the region. It is headquartered in Singapore and supported by offices in Kuala Lumpur, Malaysia, and Bangkok, Thailand. We offer a comprehensive suite of agency and professional services including investment advisory, business space and retail, residential agency, auction and sales, valuation advisory, statutory valuation and property tax advisory, research and consulting, property management, and hospitality management. For more information, please visit www.etcsea.com.