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To boost footfall, shore up tenant sales and maintain high occupancy rates, malls have been adding non-retail components and communal spaces into their mix.
With the disruption posed by e-commerce, Singapore retail malls are rapidly evolving beyond a transactional format to introduce activity-based and experiential concepts to woo back customers, revealed an Edmund Tie report.
While the city-state’s gross domestic product and household incomes have steadily increased since the 2009 global financial crisis, growing at a compounded annual growth rate of more than four percent, F&B and retail growth failed to keep pace, with annual growth barely hitting two percent over the same period.
To boost footfall, shore up tenant sales and maintain high occupancy rates, malls have been adding non-retail components and communal spaces into their mix.
This comes as online commerce has provided consumers with “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 Edmund Tie CEO Ong Choon Fah.
“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.”
With this, malls are increasingly featuring focal points, which may not even be retail in nature, where people could gather.
The recently reopened Funan Mall, for instance, features a rooftop Urban Farm, an indoor cycling track, a futsal court and rock-climbing facilities on top of flagship brands and F&B outlets.
Jewel Changi’s iconic rain vortex, which is the tallest indoor waterfall in the world, attracts huge throngs in search for “instagrammable moments”, while its hedge maze and canopy park are designed to encourage consumers to return to the shopping centre.
In addition, pop-up retail – which initially served as testbeds for new products or e-commerce taking a leap into brick-and-mortar – is fast gaining traction even among established brands.
“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,” said Edmund Tie executive director and regional head of business space Chua Wei Lin.
Funan’s Tree of Life, for instance, is a centrepiece that features 20 retail pods, enabling both established and emerging brands to showcase their products and services for a limited period of time before being refreshed again.
“Notwithstanding geopolitical, macroeconomic and technological headwinds, physical retail remains highly relevant,” noted 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.”
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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