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Amid a fast-changing retail landscape where consumers seamlessly transit from digital to physical platforms, CBRE said landlords should play their part in staying ahead as this wave of change has affected retail sales across the Southeast Asian markets and the threat of increasing shopping centre stock.
In its recent report on the retail market, CBRE said it expects close to four million sq m of retail stock across Vietnam, Thailand, Malaysia and Singapore to be completed in three to five years. It noted that developers have been ramping up retail supply in key Southeast Asian cities, with retail supply increasing by around four to five percent CAGR (Compound Annual Growth Rate) from 2010 to 2015.
According to the report, some retail developments in these six countries had to shut down due to low footfall and high vacancy rates as they failed to retain tenants and capture consumers.
With this, CBRE advises landlords to acquire e-commerce platforms or establish logistic networks in order to give consumers a fully integrated omni-channel experience.
“An established shopping centre operator with an online platform that provides ‘click-and-collect’ or from ‘store-to-door’ services gives consumers a higher sense of reliability and earns their trust too,” it said.
Aside from combining both online and offline channels, CBRE said landlords should take advantage of the high internet and smartphone penetration among consumers in the region to improve the offline shopping experience.
In conceptualising shopping developments, landlords should place the experience of consumers at the forefront, it added.
“A good social experience makes a strong positive association on the consumer and is tougher to replicate on the digital platform,” said the report.
Landlords should also find ways to show support to its tenants since forging personal connections can help them stand out from the competition and gain loyalty.
Finally, it noted that landlords should also actively seek to lease space to up and coming e-commerce retailers as they are likely to be savvier in digital marketing and up to date with the modern consumers’ needs with an established online following and logistics network.
“The onus of ensuring that stores in shopping centres remain an important and relevant touch point for consumers should not lie with retailers solely,” said Desmond Sim, CBRE Research Head for Singapore and South East Asia.
“The roles of the asset manager, the landlord and the shopping centre need to evolve to cater to the new needs of retailers and consumers amid stiff competition.”
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg