‘Malls must innovate to stay relevant’
KUALA LUMPUR: Shopping mall operators must work closely with tenants and constantly study consumers’ profiles due to technological advancement and the changing shopping trends.
ExaStrata Solutions Sdn Bhd chief executive officer Adzman Shah Mohd Ariffin said the retail sector had changed due to the advent of online shopping platforms and mobile shopping applications.
“The retail industry has progressed into online shopping due to easier access to a wider variety of products.
“It has opened a new avenue for shoppers to experience shopping at their own leisure,” he told NST Business recently.
The real estate consultant firm said shoppers were experiencing problems with physical stores due to the traffic congestions, parking space and time limitation as well as parking charges.
However, he said some people still preferred to look at the products in person before making their purchases.
Adzman said malls could register an influx of traffic if the operators were to offer the right mix of retail options.
He said malls had become social interaction centres for leisure, social and recreational activities.
“Malls with strong advertising and promotional activities tend to draw a lot more people compared with conventional malls.
“Shopping has become synonymous with going to the mall for air-conditioned food and beverage (F&B) outlets among Malaysians,” he said.
Kenanga Research said shopping malls were under pressure to evolve along with the changing technological trends, such as e-commerce, artificial intelligence, Internet of Things, robotics and financial technology.
The research house said this had a huge impact on consumer expectations on how the malls should position themselves.
“The government has placed importance on the digital marketplace by setting up the Digital Free Trade Zone (full launch in third-quarter this year) in collaboration with the Alibaba Group, pushing boundaries further for local companies to compete in the global market,” it said.
Kenanga believed shopping malls under its coverage, for example Aeon and Parkson, had been exploring ways to widen their reach into the digital space.
For example, Aeon Maxvalue supermarket has teamed up with Honestbee (Singapore based e-marketplace) on on-demand delivery of grocery items.
Kenanga Research said the outlook for retail real estate investment trusts (REITs) was not exciting due to an increase in supply of retail space and shifting demand, as e-commerce platforms continued to bite into their market share.
“This has resulted in the capping of strong rental reversions on the long run. To stay relevant, mall managers need to adapt to rapid changes in the retail environment, integrating and animating shoppers’ experience,” he said.
Kenanga Research believed landmark malls would fare better than neighbourhood malls due to better footfall traffic.
It has maintained a “neutral” call on consumer and mall REITs.
Adzman said mall operators should provide adequate parking spaces, be actively involved in advertising activities and have a strong retail mix of at least 30 per cent for F&B.
“Mall operators should evolve to attract new businesses and provide better offerings, value and choices to attract traffic.
“They must have strong retailers (tenants) and well-known foreign brands to attract consumers,” he said.
On the digital space, Adzman said more people were using e-wallet to make their purchases as more online retailers were offering special deals.
Lazada regional chief executive officer Will Ross said Southeast Asia’s digital economy was growing rapidly, but e-commerce penetration rate was still at 4.0 per cent of total retail sales.
“Both shopping malls and e-commerce have to co-exist by combining the traits of physical stores (as physical viewing, inventory storage, and pick-up point) and the traits of boundless digital space to widen the reach,” he said.