With island-wide vacancy rates for retail space in Singapore peaking at 8.4 % in Q3 2016 – the highest since Q1 2011 – it is safe to say the retail landscape is undergoing a transformation.
Take food and beverage operators, for instance: manpower constraints have restricted their expansion and, despite attempts to vary their food type and delivery style, turnover rates remain high. And while they are less exposed to competition from e-commerce than `many other sectors, the convenience of click-to-purchase has caused a substantial drop in foot traffic to malls. How are landlords and retailers adapting?
Talk of rebranding into a ‘lifestyle’ mall may be old news; however, landlords are taking it to the next frontier by expanding on the experiential factor. A simple way of easing into this concept is by incorporating more ‘retail-tainment’ tenants such as Ganso Manekineko, a large-scale karaoke facility. On the plus side, these take up large spaces in malls, but their overall impact on foot traffic is still limited. Also on the rise are multi-concept stores like Mahota Commune which combines multiple experiences within its 20,000 square feet of space, split between a cafe serving organic food, a traditional Chinese medicine clinic, and an activity space that hosts yoga and meditation sessions.
Another example is GuavaLabs. What started out as GuavaPass, a mobile application where subscribers could choose from a list of fitness classes run by independent health clubs, it has now opened its own fitness centre, capitalising on frequent users and driving a steady footfall through Mandarin Gallery, a high-end mall on Orchard Road.
Such omni-channel retail strategies have caught the attention of developers who are incorporating such needs into their design. Downtown Gallery, due to open in 2017 within the CBD, is adopting a locker system for food collection, allowing customers to order online and pick up their lunch at specified timings. Not only is this timesaving compared to traditional food delivery services, this strategy helps draw customers back into the mall.
Spearheading another initiative to further integrate e-commerce into its DNA is Singapore Post Centre, which is expected to open in 2017. It will function as a pickup point for products stored by retailers in the provided warehouse; but these retailers can also opt to showcase their goods within the mall for customers to purchase directly, and have them delivered to their home. To encourage more dwell time by shoppers visiting the mall, cherry picking a good mix of retailers will be critical.
As a compact city with a sizeable population, and with a track record of enjoying shopping both on and offline, Singapore will remain a prime regional test bed for new retail ideas. For now, perhaps we are being too narrow in our thinking of what a mall represents, whether as shoppers, retailers or landlords. As competition stiffens with more creative ideas and unique variations of how e-commerce amalgamates within malls, hopefully, it could pique the interest of shoppers to re-energise Singapore’s retail scene.
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