Serving the sleepless society
How retail property operators can adapt to reap benefits in a 24/7 market.
Emerging technologies are reshaping the sleeping habits of people worldwide, especially young city dwellers, creating a 24-hour culture and the evolution of a “sleepless society”.
The common operating hours of retail malls in Thailand are from 10am to 10pm. Outside of that 12-hour window, customers need to go to 24/7 convenience stores to buy their necessities. Flexible work hours and changing lifestyles could be a major reason behind the healthy 8% growth year-on-year of convenience stores, the largest retail format by revenue, in the third quarter of this year despite the economic slowdown, according to CBRE Research.
Several landlords are already tapping into the 24/7 model such as The Street Ratchada, which offers a 24-hour lifestyle complex with restaurants and cafes on the ground floor and a 24-hour fitness centre on the second floor. Samyan Mitrtown, a recently opened mixed-use development by Goldenland, aims to be an “urban life library” that provides 24/7 services such as dining, shopping, a fitness centre and co-learning space to meet new lifestyle needs.
Longer opening hours could lead to higher sales and profitability. However, those hours mean higher wages for employees who work night shifts, higher security costs and the need for stricter inventory monitoring.
For commercial landlords, a strategy that focuses on seeking and retaining adaptive tenants to fit the 24/7 shopping model is crucial to its success. CBRE believes 24/7 retail should comprise four categories:
Food: Not everybody eats at the same time. Quick-service restaurants are the most popular choice for sleepless society members. McDonald’s, KFC, Burger King and Starbucks have been operating 24/7 branches in various parts of the world for decades. In Bangkok, Samyan Mitrtown introduced the first 24-hour Shabushi Japanese restaurant to accommodate this segment, and we have been seeing people at the buffet there as early as 8am.
Fitness: There are groups of people who work late, but still want to get their fitness fix. Jetts Fitness, an Australian chain pioneering 24-hour gyms in Thailand, provides a solution for this group.
Office space: The growth of the gig economy, where freelance workers have short-term jobs, has led to a more flexible workforce. A Gallup study revealed over 33% (57 million people) of workers in the US are employed as independent contractors.
According to Kasikorn Research Center, 1.9 million Thais now work as freelancers, a 3.9% increase over the past five years.
Fast delivery services: In response to the rapid growth of e-commerce, having 24/7 logistics services could greatly increase the speed of doing business and provide convenience to small and medium-sized enterprises.
CBRE believes 24-hour lifestyle malls at nightlife hot spots where students and other groups work at night have great potential in the saturated retail market.
For commercial landlords, a strategy that focuses on seeking and retaining adaptive tenants to fit the 24/7 shopping model is crucial to its success.