Ex­perts: In­no­va­tion key to sur­viv­ing retail gloom

China Daily (Canada) - - SHANGHAI - By WU YIYAO in Shang­hai

wuyiyao@chi­nadaily.com.cn

De­spite it be­ing a cold win­try Sun­day, 23-year-old Zhu Yanzi nev­er­the­less made a three-hour trip to reach down­town Shang­hai where var­i­ous events were tak­ing place in the depart­ment stores in the area.

She first took pic­tures with the car­toon char­ac­ter Ali at Shang­hai Times Square and bought some mugs with im­ages of the red fox. Zhu then wounded up at the Salvador Dali show­case at K11 Chi Art Space and bought mag­nets and post­cards. Fol­low­ing that, she queued for an hour to get into the flag­ship store of Ja­panese re­tailer Muji. There, she bought a pair of gloves. Zhu later met her friends at Joy City to view an ex­hi­bi­tion of art in­stal­la­tions. She ended her day with a meal in a Hong Kong-style restau­rant.

Zhu had only in­tended to spend 500 yuan ($76) for her train tick­ets, din­ing and bev­er­age ex­penses, but she had spent more than 1,000 yuan at the end of her day trip.

“It feels very dif­fer­ent when you’re shop­ping at depart­ment stores with th­ese art ex­hi­bi­tions. It doesn’t re­ally feel like shop­ping, more like you’re a kid spend­ing in amuse­ment park. It was fun,” said Zhu.

In light of shrink­ing con­sump­tion lev­els in re­cent times, re­tail­ers in Shang­hai have been go­ing to great lengths to lure con­sumers by up­grad­ing their fa­cil­i­ties and in­tro­duc­ing unique shop­ping ex­pe­ri­ences that in­clude art in­stal­la­tions, mu­si­cal shows and events pro­vid­ing added value that on­line shop­ping can­not of­fer.

Mar­ket re­searchers said that it is a nat­u­ral trend for re­tail­ers to come up with dif­fer­ent ways to at­tract con­sumers as per­son­al­ized ex­pe­ri­ences are ex­actly what con­sumers want from brick-and­mor­tar stores.

“The retail mar­ket has been cel­e­brat­ing va­ri­eties. A wide range of new brands from over­seas mar­kets are en­ter­ing China and bring­ing fresh ex­pe­ri­ences to niche-mar­ket con­sumers,” said Carlby Xie Jingyu, di­rec­tor of re­search at Col­liers China.

“At the same time, de­vel­op­ers are at­tach­ing more im­por­tance to com­mu­nity ex­pe­ri­ences, serv­ing de­mands all across the city. The com­plex­ity of ex­pe­ri­ences ex­pected from con­sumers ac­tu­ally presents var­i­ous op­por­tu­ni­ties for de­vel­op­ers to lev­er­age,” Xie added.

Ac­cord­ing to mar­ket in­sid­ers, new sup­plies of retail prop­er­ties in Shang­hai in 2016 may ex­ceed 40 projects and this will in turn make com­pe­ti­tion for cus­tomers even fiercer.

A re­port by DTZ Cush­man & Wake­field said that projects that pro­vide a space for fam­i­lies to spend qual­ity time to­gether may stand out from the com­pe­ti­tion as there is an in­creas­ing de­mand from par­ents for shop­ping malls to fea­ture play­grounds or in­door ac­tiv­i­ties such as hand­i­craft, mu­sic or cook­ing work­shops.

Ex­perts said that up­grad­ing ser­vices and im­prov­ing con­sumers’ ex­pe­ri­ences re­quire more than just in­stalling new hard­ware and get­ting rid of old­fash­ioned prod­ucts or brands.

Kenith Kong, di­rec­tor and head of Retail Ser­vices with DTZ China, said that it takes qual­ity man­age­ment to de­liver the mes­sage to con­sumers that its retail space is the prod­uct of thor­ough re­search, thought­ful plan­ning and ef­fec­tive ex­e­cu­tion.

“Con­sumers may ini­tially feel quite sur­prised when they find a mini zoo in a depart­ment store, but they will get soon get bored if they find sim­i­lar things in other stores. Mall oper­a­tors, de­vel­op­ers and in­vestors need to think and in­no­vate in­stead of sim­ply copy­ing one an­other,” said Kong.

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