CBRE Research urges landlords to engage
Online and offline retailing in Southeast Asia is expected to merge further, according to a new study byCBRE Research Singapore.
Its report It’s All About Place-making urges landlords to play their part to stay ahead in a fast-changing retail landscape where consumers transit seamlessly from physical to digital platforms.
CBRE Research projects that nearly 4 million sqm of city retail stock across Malaysia, Singapore, Thailand and Vietnam will be completed in the next three to five years. CBRE studied retail stock in Bangkok, Hanoi, Ho Chi Minh City, Jakarta, Kuala Lumpur and Singapore.
“Some retail developments across these six cities have had to shut down in the face of high vacancy rates and low footfall as they failed to capture consumers and retain tenants,” says the report. “One suggestion is for landlords to acquire eCommerce platforms or set up logistics networks to give consumers the fully integrated omnichannel experience.”
Established shopping centres with online platforms that provide “click-and-collect” or “store-to-door” services give consumers a higher sense of reliability and earn trust as well, says the report.
“Both physical and online-only retailers are also more inclined to expand their footprint in these shopping centres in their bid to incorporate an omnichannel strategy.”
Wave of change
Combining both online and offline channels is one of five strategies CBRE Research recommends to landlords as Southeast Asian economies cope with structural shifts in the face of disruptive technologies.
This wave of change has affected retail sales across the markets, with CBRE Research using the PLACE acronym…
Place-making: Conceptualising shopping developments with the consumer’s experience at the forefront. A good social experience makes a strong positive association on the consumer and is tougher to replicate on the digital platform, says the company.
Leveraging technology: Landlords should take advantage of the high internet and smartphone penetration among SEA consumers to improve the offline shopping experience. Technology can provide consumer insights and interaction while helping boost foot traffic and sales.
Actively engaging: Forging personal connections with consumers is imperative for landlords to stand out from the competition and gain loyalty. Tenant engagement, and landlords need to find ways to show support.
Combining channels: Landlords can break down the silos between online and offline by helping tenants incorporate an omnichannel strategy through vertical and horizontal integration, such as acquiring an eCommerce platform or setting up a logistics network to fulfil delivery needs.
Engaging digital tenants: Landlords should seek to lease space to up-and-coming eCommerce retailers as they are likely to be more savvy about digital marketing and in tune with modern consumer needs.
“The onus of ensuring that stores in shopping centres remain an important and relevant touch point for consumers should not lie with retailers solely,” says CBRE Research Singapore/Southeast Asia head Desmond Sim. “The roles of the asset manager, landlord and shopping centre need to evolve to cater to the new needs of retailers and consumers amid stiff competition.
“This task is all the more urgent as the market is anticipating a surge in internet use among developing countries, particularly Indonesia and Vietnam where mobile phone use has the greatest potential to increase.”
Store-based retailing will stay the key point of purchase among SEA consumers in the next five to 10 years and account for at least 90 per cent of total sales value, says CBRE Research. However, landlords will face increasing pressure to make every visit to the shopping mall a memorable experience.
With its headquarters in Los Angeles, CBRE Group is a commercial real-estate services and investment firm with more than 400 offices worldwide.