Click and mortar
BUY online and pick up in-store. Lots of retailers are now offering this option in the US and elsewhere in more developed markets. Malls in Malaysia are already looking into it in the face of growing competition from e-commerce sales. In the future, instead of brick-and-mortar, Malaysian malls and retailers will be offering click-and-mortar services too.
According to consulting firm A.T. Kearney in a report from last year, the online retail market in Malaysia is expected to grow by 23% per year up until 2021, driven by electronics and media. Facebook Malaysia said last year that the e-commerce sector has grown by 47% from 2015 and was worth a little over RM10bil last year.
All these figures are no doubt alarming to the malls, which also face competition from other malls. Many mall owners, especially under the real estate investment trusts, have embarked on asset-enhancement initiatives, a fancy term for massive renovation and expansion, to attract fickle Malaysian shoppers and ensure that yields don’t suffer.
All mall operators say that good management and brand line-up are two of the important factors in engaging with shoppers, but e-commerce and the rise of alternative sources of entertainment are making it increasingly difficult to engage with people. In short, malls, like traditional pay-tv operators with viewers, are finding that with many more options out there, engaging with shoppers is becoming a slippery slope.
Consumer sentiment has not improved, and in fact, the Malaysian Institute of Economic Research’s consumer sentiment index showed that sentiment had actually retreated in the third quarter of last year from the second quarter.
While most analysts expect private consumption to hold up, it will not be smooth sailing for retailers, given that the high cost of living, inflationary pressures and high household indebtedness continue to weigh on consumers.
Click-and-mortar could be the way to go for malls. After all, for online shoppers who choose to pick up their purchases from malls, they may not just drive through but may even take a stroll, have a cup of coffee, have a meal and perhaps watch a movie. And on their way to the cafe or restaurant or theatre, they may decide to enter a shop and make more purchases. There is still hope.