retail malls

Physical retailing is not dead, so long as retailers develop innovative ways to create a memorable experience for consumers.

Malls may die a slow (or fast) death if the following foundations of transparent, real-time data, and synergy between stakeholders, are not made a reality today. In Singapore, three factors can compete with the rise of online shopping.

Firstly, an operating model of win-win relationships exists between all stakeholders, including landlords and merchants, with consumers in the centre.

Secondly, a fundamental shift from silos and distrust to trust and cooperation and thirdly, a data infrastructure (hardware and software) that enforces trust and provides superior business insights and changes in productivity.

The retail mall of tomorrow will not succeed unless they have complete real-time data visibility and sharing, just like e-commerce marketplaces.

Shop in any online marketplace today, from multiple stores. This marketplace has real-time and itemised information about every single purchase that you make.

Step into any mall today to buy your latte and bagel, your pair of shoes and your dress; the mall doesn’t have this information.

A critical edge that e-commerce marketplaces have over physical malls is the real-time visibility of granular sales data. E-commerce marketplaces can tell you how many people shopped at midnight and how many transactions were made, and what that average basket size was per transaction. Malls cannot.

Also Read: How can European companies win in Indonesia’s e-commerce market?

Systems, contracts and approaches in offline retail today is outdated, and thus the physical retail ecosystem cannot keep pace with the exponential growth of e-commerce.

Actual omnichannel retail with malls requires complete data visibility. No one has achieved this before because of POS fragmentation, the difficulty of integration, and a non-data centric approach.

Take a look at any POS system in any shop, in any mall in Singapore. Right this minute, POS machines all over the island are clocking in thousands of transactions concurrently.

The problem?

Malls today are not equipped with the systems to view, analyse and use this data to grow with merchants and delight customers.

Again, e-commerce marketplaces can, and they routinely tell the market and each of their merchants how many people shopped at what time, how the merchant did on the day compared to their competitors and the whole market. Malls, on the other hand, are unable to provide this information in real-time.

Inability to respond to crisis

For example, during a lockdown of 14 days, should a mall be able to understand how sales fare day to day, before, during, and after the lockdown? In reality, yes, they should, but it hasn’t been reflected in all malls. It is information that the vast majority of malls do not have, and therefore, no merchants receive as insights.

Also Read: Offline is the future of online retail

It makes it challenging to negotiate subsidies and waivers in tripartite discussions, turning to pictures of empty malls and ‘he-said-she-said back and forths.

Based on observations in the industry, it is commonly known that landlords and merchants distrust each other as a rule of thumb. They doubt the data each present, question each other’s intentions and actions, and each party claims that the other does not share data transparently.

You only have to look at any social media post within merchant groups, business publications, and the conversations and comments that unfold to understand the intensity of these feelings.

Is this the only way to operate? With distrust and keeping our cards to our chest?

Workable models for data transparency

Why is it that merchants are more than happy to share all sales data with e-commerce marketplaces? Why is it that retailers routinely sync their customer database with tech giants like Facebook and Google for loyalty and retargeting purposes?

These business relationships are underpinned by the three principles shared above—an operating model of win-win, trusting relationships, and an automated, scalable data infrastructure.

E-commerce is new, shiny, and revolutionary. Physical marketplaces, on the other hand, has been around for centuries. With this, malls must disrupt themselves and meet evolving consumer demands and behaviours.

Also Read: Carousell acquires Ox Street to double down on its re-commerce efforts in Greater SEA

We already know that tech giants like Amazon, JD and Alibaba own their retail stores and complexes. Perhaps it is time for big tech to disrupt and best landlords at their own game?

Transformation involves upgrading physical systems, changing the hearts and minds of these organisations, and maintaining open mindsets surrounding legacy SOPs and beliefs, such as data sharing between stakeholders.

Building alignment, consensus and trust are close to our hearts which is why we created The Future of Retail Asia Podcast interviewing retail ecosystem leaders from all around Asia.

Unlocking value, revenue and investments into the retail ecosystem

As more retailers opt for the omnichannel approach, the question arises of how these value-adds to the consumer and drive higher sales and revenue.

Ultimately, it all boils down to creating a seamless online to offline shopping experience for the customer. That can only be enabled with data that lay latent and trapped in the fragmented Point-Of-Sale systems market in Singapore’s retail scene.

For retailers and brands, showing data is the ‘proof of the pudding’ – driving more sales effectively and harnessing data to do that predictably and efficiently, is what will save the retail ecosystem, not arguing about rents.

Interestingly, it will also be why the largest brands in the world, FMCG brands like PepsiCo and CocaCola, P&G and Unilever, would invest more money.

Do you think they would be interested to know how their SKUs move every hour, day and week in the mall or retail ecosystem?

Also Read: Beyond e-commerce: How omnichannel experiences can shake up SEA retail

Understanding demand flow to plan marketing, manufacturing and distribution better saves brands billions of dollars a year if achieved – this unlocks tremendous value.

Fintech partners like banks, card issuers and e-wallets would love to understand customers, purchases and how they perform in the market, and predictable and measurable ways to acquire and have users spend more with them.

Show your partners the data of how spending can be increased, and you will see money flow in like a gushing river – all because you can show these partners how they can increase ROI and decrease costs – while all other competing malls struggle to calculate rental monthly.

The Great Singapore Sale (GSS) has died. The only honourable way is to recreate a new, data-centred and customer-centred version of it.

When was the last time you saw a GSS print ad and specifically went to town to catch the sales?

The popularity of the GSS has dwindled sharply in recent years, and this has been prominently replaced by catchy online ads and jingles shouting every double number you can imagine (11, 22, 33, 44, 55, 66, 77, 88, 99), but that doesn’t have to signify its death.

Could the Great Singapore Sale be reincarnated and brought back to life with real-time data, omnichannel marketing and engagement?

Want to give people real-time sales figures in the malls? Top-selling brands and shops for the day?

You need aggregate real-time data.

Want to challenge your shoppers to shop all day if the mall hits S$10 million spend for the day everyone in the mall receives a S$10 voucher?

Also Read: B2B e-commerce platform EI Industrial attracts seed funding from Cocoon Capital, Beenext

You need aggregate real-time data. Any omnichannel future, customer-centric future, experience innovated lot – requires aggregate real-time data.

The best part is that the technology, the processes, and the steps already exist to make it happen.

The Fair Tenancy Framework, while a good start, will not work by itself, as the rental calculation isn’t exciting for retailers and even malls. Growing top line is.

If there is one thing that retailers care about, it is sales. Growing whole retail ecosystems, whether it is a mall or a precinct, requires every party working together in the ecosystem, for the good of the ecosystem. This interestingly applies to malls, but to also precincts (for example 600 merchants in Kampong Glam, or in Chinatown).

If data can unlock how to double or triple spend in a mall, that’s what will work, and you only need to look at e-commerce use cases to see how to bring it into the mall.

The future of offline retail is an exciting and promising one for landlords, tenants, and shoppers alike, if and only if all of the above happens.

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