Pop-up retail is fast gaining traction even among established brands, offering another avenue through which physical retail can attract shoppers, even as landlords and retailers turn to experiential- and activity-based concepts to boost footfall and create communities within malls.
Originally serving as testbeds for new products or a playground for e-businesses looking to take the leap into brick-and-mortar, pop-up retail is now an established feature of the shopping experience.
Funan Mall's Tree of Life, for instance, 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, noted Edmund Tie in its insight paper released on Monday. Bangkok’s ICONSIAM likewise offers SookSiam, a co-creation and cultural space spread over 172,000 sq ft which rotates indigenous entrepreneurial set-ups.
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.”
Changing tenant mix in retail malls
As part of an overall strategy to enhance the shopping experience, mall operators have been increasing the experiential and activity-based retail mix in their malls.
Today, F&B contributes a considerable part to a mall's overall retail mix and strategy noted the report. The other growing segment is leisure and entertainment, which includes 24-hour gyms, fitness studios, social kitchens, indoor family games and activities, and cinemas. While these tenants are not big revenue generators in proportion to the amount of space they occupy, they boost footfall and foster community gathering through activities/event/workshop offerings.
Since 2009, the proportion of F&B’s contribution by gross revenue and by net lettable area (NLA) has increased significantly, followed by services and education, leisure and entertainment. On the other hand, fashion, department stores, supermarkets and hypermarkets have shrunk in response to the growing e-commerce offerings of similar product types sold at these stores.
That being said, some established online retailers have started expanding offline to complement their omni-channel strategy and provide a more integrated customer experience.
“Notwithstanding geopolitical, macroeconomic and technological headwinds, physical retail remains highly relevant,” said Ong Choon Fah, Edmund Tie’s chief executive officer.
“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.”
Examples of how retail malls are evolving beyond the traditional transactional model include the recently re-opened Funan Mall which offers a publicly accessible rooftop Urban Farm, rock-climbing facilities, a futsal court and even an indoor cycling track. Jewel Changi meanwhile attracts throngs seeking "Instagrammable moments" with the iconic Rain Vortex, and encourages consumers to return with play attractions such as Canopy Park and Hedge Maze.
Elsewhere, the award-winning The Commons community mall in Bangkok features 53,800 sq ft of space for communal uses including family-friendly play areas and space for regular events and activities such as cooking workshops, live music and community gatherings.
While the trend of creating greater shopper and community engagement through activities is gaining steam, the report noted that it is still too early to ascertain if this strategy will translate into higher consumer spending and profitability as the novelty might wear off.
Other key emerging and established trends highlighted by the report include:
1. Increased diversity, quality and niche F&B offerings, as F&B increasingly becomes a critical success factor in the overall retail mix;
2. Integration of omni-channel strategy to provide more seamless, holistic, and personalised customer experiences. This is also augmented with the greater use of loyalty apps, data and video analytics, and logistics;
3. A growing source of secondary income is coming from existing tenant and third-party advertisements on the mall's website or within mall premises.
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