Experts: Innovation key to surviving retail gloom
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.