ADDITIONAL INSIGHT / RETAIL LANDSCAPE
How are good public spaces around and within malls and precincts and the use of data and technology shaping our shopping experience?
Writer: Serene Tng
Buying something these days, whether these are essentials or more luxury items, may no longer just be about visiting a particular shop or getting that one item.
The retail landscape has evolved where people have come to expect much more from a mall, a shop, a place, or a larger precinct. They want the experience, the surprises, the customized attention. They also want greater convenience, ease, safety, and a closer interface between the physical and online worlds.
The public realm in terms of having delightful and engaging public spaces will increasingly play a larger role in shaping our shopping experience. The effective use of data and technology will also influence the way people shop, when they shop and where they shop.
Three experts reflect on the evolving retail landscape and its shifts on retailers and customers.
They are Jack Backen, Regional Director of global consultancy firm, Cistri, Shaun Kwan, Co-Founder & Chief Operating Officer of Singapore firm, Trakomatic (specialising in sensor and video technology), and Dr Kapil R. Tuli, Professor of Marketing, and Director of Retail Centre of Excellence, Lee Kong Chian School of Business, Singapore Management University.
They spoke at URA’s placemaking webinar in December 2020 on the digital transformation for retail and precinct marketing.
Our retail experiences and offerings are constantly evolving. What are some of the things developers and landlords that should pay closer attention to?
Jack: There is a view in the market that the retail model is shifting towards creating and curating more memorable experiences. But I think another important aspect to focus on is in supporting and enhancing the convenience of the shopping trip and experience.
Your average shopping trip may probably take place when you are on the way home from the train station or from elsewhere. For such shopping trips to work well, there are some fundamentals that must be there. For example, the availability and accessibility of public car parks or public transport must be there, the public toilets must be clean, the signages must be clear and so on.
To get these fundamentals wrong, any kind of good experience offered may not be enough. Beyond the average shopping trip, this also applies to other kinds of shopping trips, such as those for fashion, leisure, or entertainment.
Dr Kapil: Whether a mall is a standalone or is located as part of a distinct precinct, the tenant mix will become increasingly important. We need to pay closer attention to understanding what is the best tenant mix that will draw people into a mall or to an area, to understand why people are visiting these places.
What is the profile of people that come into a mall or a precinct? Does my business model resonate with the area? There is also the possible spill over effects from having particular tenants in an area or a mall that you can leverage on to create new opportunities, not just to support businesses but to benefit the larger mall or area as a whole.
Placemaking efforts have increasingly attracted more to visit historic districts such as Kampong Glam. The above outdoor dining experience is a result of one of the many placemaking efforts carried out over the years. This is taken prior to COVID-19
A strong public realm is important in contributing to the value of a place. What are some potential benefits for landlords and developers to proactively shape this?
Jack: When you are managing a development, there is an immense pressure to keep the costs down. From a landlord or developer’s point of view, why should they spend money on public spaces that are not likely to offer rent for them?
Yet, there is an inherent incentive to create a strong public realm that can result in a good financial outcome. From our research on the impact of the public realm in retail environments, we have found that high quality public spaces tend to increase the shopping mall’s catchment of visitors and customers.
People who access and use more of the public spaces within and around the shopping mall tend to come from much farther away. As a result, you are attracting more diverse customers. Such customers have invested in travelling longer to get to that mall or place and would thus want to stay longer. Therefore, there is a potential financial benefit from investing in a good public realm.
In addition, when you invest in creating a great place, there is also a stronger and more compelling story to tell around the value of the place, of the businesses and the stakeholders. This is positive not just for businesses but for larger communities.
With so much data and technology available these days, how can retail businesses approach and think about using these effectively?
Jack: You need to first focus on asking the right questions and identifying the problems that you are trying to address. For example, the questions could be, what is it that you don’t know about your customers that you need to know. What is about their behaviours and preferences that you need to know. Retail is all about the customer preferences. From such questions, you then need to determine what data and insights will help you to answer such questions.
You also need to understand the strengths and weaknesses of the available streams of data and design different methods to gather different kinds of insights you are looking for.
There is still space for the old-fashioned kind of research. No landlord in any market, whether their properties are in Orchard Road, a historic precinct, or a suburban area, can claim to know everything about the area’s qualities or their visitors and customers’ preferences. One must get into gathering ground insights, talking to people, carrying out focus groups, organising town hall meetings, or having one-to-one discussions and etc.
This public space at the Tanjong Pagar Centre is an example of the increasing emphasis on enhancing the public realm for more to enjoy. This was taken prior to COVID-19
Dr Kapil: I see data as a resource and technology a tool. There is often an assumption that if you have both data and technology, you can do anything. But many forget that there is a certain skill set required to understand data and the insights that come out of it. There is also a particular skill set needed to understand how you can use technology effectively.
Different facets of data can be used to address different aspects of problems or be used to support good decision making. For example, if I am a major stakeholder in a precinct, I may want to manage possible overcrowding in particular areas of a precinct. This is especially relevant in the current context of the ongoing COVID-19 pandemic. How can I do this? One option is to tap on data from sensors to understand and manage the flow of the crowds.
Another example is if I want to manage the potential issue of over cannibalisation amongst tenants or if I want to leverage on common aspects amongst tenants, can I get into sales agreements with my tenants to see how we can create new opportunities to support their businesses or to tap on positive spill over effects that may arise amongst businesses?
Tell us more about how data and technology can be used to enhance the customer’s experience.
Shaun: In the past, we used to have various standalone tools that focus on different things, such as crowd density, people counting or facial recognition. Today, with greater advancement in both technology and the availability of data, we have moved away from just tapping on such options to looking at the entire visitor and shopper journey to tailor solutions to address specific problems and challenges.
In charting out the entire visitor or shopper journey, we can propose how certain data and technology can be used to enhance various experiences, from the time people set off to visit a place to what they do when you arrive at the place.
By mapping out the visitors or shoppers’ considerations, we can better understand their different shopping preferences and personas to further enhance the quality of their retail experiences to meet more of their specific interests and needs.
Share with us some more specific examples.
Shaun: By using technology and data effectively, malls and retailers are already experimenting with enhancing the customer experience. For example, with approval from shoppers to recognise their digital profiles (which do not contain personal information) when they visit malls or shops, a repeat visitor could be offered loyalty points, discounts, and repeat purchase vouchers. Or when they pass certain digital signages that recognise their digital profiles, food and other suggestions can be offered to the shopper based on his or her shopping patterns or preferences.
This can also apply to other scenarios where you can possibly enjoy more seamless check-ins with digital recognition at attractions such as the zoo. In another setting, should you have to attend a small event physically in the current pandemic context, a single digital pass and recognition can enable you to be able to visit different booths or set-ups with no need to check in multiple times. Warning messages could also be programmed to alert you to avoid certain places.
Another possibility is the use of augmented reality at shops to enable customers to “try on” shoes or clothes of different sizes and colours quickly and easily without the hassle of putting on each piece. Shops can potentially save on the inventory space in keeping a small stock in the shop. It also enhances the buying experience and the customer’s satisfaction.
There is an increasing localisation of malls in many neighbourhoods across Singapore, from Jurong to Tampines
The ongoing pandemic has influenced our retail behaviours. What are some shifts you are observing and what are some fundamentals that will remain?
Jack: There is an increasing localisation of malls. A neighbourhood mall is all about its neighbourhood and it is a key part of its civic centre. People are becoming more localised in their area in how they identify with their immediate living area as their town and their place. With more people working from home, it means more are also visiting and accessing their local areas.
More active placemaking can play a critical role in shaping this local identity and sense of place around the local civic and commercial hubs and areas. This could add richer layers to the local retail experience.
On fundamentals, I believe the strong physical retail shops and networks in Singapore will remain. This is because of how highly accessible the networks of malls and shops are across Singapore. There is a high density of the population able to support these, coupled with a strong eating and shopping culture. The extensive network of train stations also plays a part in encouraging people to visit malls and shops, where these are conveniently located.
Located within local retail environments are also food and beverage (F&B) outlets, wet markets, and supermarkets, all of which are fundamentals for Singaporeans. While many F&B transactions may have gone online, the production of food products remain at the physical shops and a lot of these transactions still support the brick and mortar F&B outlets.
Dr Kapil: Good quality service, good quality products, at great convenience, will remain critical. These aspects will not change. Beyond this, the current pandemic is also educating consumers and retailers on the potential use of technology. We will increasingly see a mix of more hybrid forms of shopping options and experiences, that has both online and physical dimensions.
One thing that people have figured out quite quickly and easily and come to expect in this new landscape is the ability to order online and pick up their products easily. Or to go into the store to check certain products and be able to order them online. Consumer behaviour will shift in embracing and expecting a closer integration and interface between online and physical worlds.
More retailers in Singapore and other cities are also already tapping on technology to offer a more frictionless consumer experience. For example, some are providing online waiting systems that minimise waiting time at shops.
Shaun: While shop and retail spaces may be further adapted and adjusted in response to changing needs, the retail landscape is likely to see more quality and diverse retail experiences for customers.
With access to data and technology, retailers can plan and curate more targeted options and possibilities for different customer segments in enhancing their retail experience.
Future plans will enhance the streetscape greenery along Orchard Road, continuing to make it a great shopping and lifestyle destination
What are you excited to see in the retail environment in future?
Jack: There is an increasing momentum in the recent years to shape and create a stronger public realm in our retail and other built environments.
I am looking forward to seeing more interesting and exciting ideas and efforts in this aspect, where you are visiting a place not just because of another new shop. There could be something new and surprising happening there and it is changing all the time.
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Top image: A scene in Orchard Road, taken prior to COVID-19