Updated from : The Business Times, 20 July 2020
AS retailers forge ahead with efforts to go online, a move hastened by the Covid-19 pandemic, mall operators in Singapore should also align themselves with the trend to stay relevant – not just to consumers, but tenants as well, according to industry consultants.
This is important given that the diminished foot traffic at malls could persist even after the pandemic situation improves, as consumers are likely to remain cautious. Malls may also have to continue to comply with rules for safe management and crowd control.
Also, existing tensions between tenants and landlords, exacerbated during the Covid-19 crisis, may be a push factor for tenants. For instance, a representative from the SG Tenants United for Fairness group told The Business Times in March: “We know that we need to help ourselves. . .and we are doing everything we can to build new channels of business that do not have this kind of reliance on what is still a very unfair basic relationship with brick-and-mortar malls.”
Malls need to reinvent themselves in the digital sphere to remain relevant and competitive in a digital age, said Ethan Hsu, head of retail at Knight Frank Singapore. “They have to innovate and break away from convention as mere brick-and-mortar landlords to digital-first mall operators with physical space inventory.”
Some mall operators here and in the region have already embarked on this revamp. In June, CapitaLand launched eCapitaMall in Singapore, a digital mall featuring the merchandise of retailers, the majority of whom also operate in CapitaLand’s malls locally. As of June 23, or about three weeks since the launch, the digital mall had over 130 merchants.
Similarly, Siam Center in Thailand has set up a virtual version of the mall on e-commerce platform Lazada.
Another mall in Singapore, Suntec City, recently ran what it said was the city state’s first-ever livestreaming shopping festival, taking a leaf from the rising popularity of the livestream shopping trend in China.
Anthony Yip, deputy chairman of APM Property Management, the property manager of Suntec City, told BT that the event saw a “very healthy rate of participation” among its 200,000 registered members, and that the event will not be the last.
According to consultants, malls with a platform for tenants to go online provide a sought-after value-add, particularly for smaller retailers that may not have the resources to develop their own digital strategy.
Jochen Krauss, managing partner of Simon-Kucher’s Singapore office noted that the devil is in the details – for example, the shopping experience and the amount of control individual tenants have – but said it is largely “a great way” to help tenants transition online.
“The online channel needs to be sophisticated, not just a static website with five-day delivery,” he said.
Providing tenants with an e-commerce platform can also benefit mall operators. For instance, Bain & Company partner Gwendolyn Lim noted that if the mall is the one running the online platform, it would be able to collect more information about tenants’ customers than it would offline. It can then use the data to drive more traffic online or offline, as well as channel customers to the other malls it operates.
Consulting leader at PwC Singapore Charles Loh said: “The real estate players know that this is a growing trend and leading companies have made the bold move.” As physical stores and malls transform, he said this will lead to reduced store footprint as well as changing tenant mix and spatial design to meet the new needs.