When visiting shopping centres in Beijing and Dalian, our team makes thorough inspections of each property to gather insight into their strengths, weaknesses, and performance potential. The key driver of retail success is ultimately strong footfall, and we are looking at not only the number of people passing the main entrance of the mall within a defined short time period, but also the number of people carrying shopping bags and for which brands. While not an indication of conversion rate (shoppers into sales) per se, these figures are an indication of how many people have purchased a physical product and what they purchased. This is interesting because of the concern around show-rooming in modern shopping centres, as consumers turn to online storefronts to buy physical products.

Few shopping bags are typically seen in the run-of-the-mill community and regional centres today, with the number of bags typically in the range of less than 5-10% of the total footfall figure. Most visitors to malls appear to be there for the food and beverage, children’s activities, or simply window-shopping. Furthermore, any bags observed almost always are from a small set of international fast fashion mini-anchors, with surprisingly few exceptions. If a mall has an H&M, for example, almost all of the bags seen tend to be from this one brand. This suggests that people who buy a physical product in these malls tend to focus on the big brands and are not making purchases from the many other, smaller brands in the mall. Unless, of course, one were to include the take-away bags from casual dining restaurant chains.

This pattern even extends to the biggest of the destination malls in both Beijing and Dalian; large properties clearly offer a rich assortment of brands. And yet, customers are still only purchasing from a few big names. This may be because the mini-anchors have large, attractive stores in the best locations of the mall. These tend to generate more impulse buys and offer the opportunity to observe what others in these fashionable parts of the city are buying and to follow suit. Meanwhile, the small retailers are hurt as they seem to be bypassed. Borrowing a concept heralded by the hypermarkets in decades past, fast fashion could be called a “category killer.”

Our regular inspections also revealed an interesting trend with the lack of vertical transportation in shopping centres. Customers wishing to use the elevators to directly reach the upper floors of a property are waiting an average of 32 seconds for an elevator, and sometimes as much as 99 seconds. Every mall inspected in Dalian unanimously had lifts that were too both small and too crowded. However, this has the unintended benefit of encouraging circulation throughout the property and the ability to stimulate more impulse purchases at smaller shops. Today’s shopping centres face a challenge of getting the massive F&B crowds and families with children to make impulse purchases to support smaller brands.

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