From left to right: Jack Backen, director, property economics and research, Cistri; Patrina Tan, senior vice president, retail, marketing, and leasing, OUE Limited; Terence Seah, director and head of Singapore Studio for Benoy; Wilson Tan, CEO, CapitaLand Retail; and David Fassbender, executive director, portfolio management, Asia, PGIM Real Estate, speaking at a ULI Singapore event.
E-commerce has finally arrived in Singapore in a big way. Amazon has appeared on the island’s shores, joining local etailers like Zalora and RedMart, and with meal delivery apps such as Deliveroo, FoodPanda, and UberEats, restaurant-grade food can come straight to your door. Nonetheless, the pipeline for brick-and-mortar retail remains strong, with a total of 509,000 square meters (5.5 million sq ft) of retail space of projects in the pipeline.
With excess capacity looming, the sector will need to adapt as competition increases. “Retail must undergo some very fundamental changes, and this is where we start seeing a need for us to go out and make retail very different,” says Wilson Tan, CEO of CapitaLand Retail, the retail arm of CapitaLand Group. It is no longer enough to be a convenient one-stop shop for a variety of products because online shopping already takes care of such needs, he says. What developers need to do now is to find the “X factor” to make both new and existing stock attractive to customers.
This X factor, according to the session’s panelists, is providing an experience rather than just a shop. And this might not be as “new” as one thinks: David Fassbender, executive director of portfolio management in Asia for PGIM Real Estate, argues that retail has “always been” about the experience.
That’s why, Fassbender says, malls in the United States are struggling more than those in Asia. Unlike their Asian counterparts, which often offer more options like dining and education resources, American malls have traditionally been designed simply to bring stores together, without further consideration of amenities and conveniences like transport links. “It’s just not interesting anymore,” he says.
Still, even tenants and landlords in Asia have gotten a little complacent. Terence Seah, head of the Singapore studio of Benoy, indicates a radical shift in mind-set with his practice’s decision not to use the word mall, preferring the term urban village instead. In his view, the shopping development of the future is going to be a porous experience. People no longer think of themselves as consumers, or of going to a particular place to shop. Developers are therefore increasingly focused on creating mixed-use spaces that allow for the creation of experiential activities.
To be effective, experiential retail requires extensive data and research. Patrina Tan, senior vice president of retail, marketing, and leasing at OUE Limited, described the groundwork needed before opening the Downtown Gallery in Singapore’s central business district. For two years, OUE worked with a futurist company to study how retail and consumer tastes are evolving by studying consumer habits and lifestyles.
“What we really want to know and reimagine in the brick-and-mortar space for shopping and retail is how to create the experience and space for the future self?” she says.
What OUE found was that customers are increasingly interested in the details—things like what goes into their food, where it has been sourced, whether ethical and clean practices are adhered to along the supply chain. These are the types of issues that will increasingly matter to consumers going forward.
As a result of their two-year study, OUE designed Downtown Gallery with three key themes in mind: eat well, keep well, look well. Services such as automated food and beauty bars were developed to increase convenience and efficiency, allowing consumers to cut down on waiting times and make more out of their 60-minute lunch breaks. At the same time, the space has been designed in a way that makes it “Instagrammable.” It is a consideration that Tan thinks mall developers will not be able to escape in the future – designing an attractive experience will necessarily involve the visual component and whether people feel the space was somewhere they would like to share on their social networks.
“It’s all about being able to showcase what’s going on in your life within the like-minded community”, she says. “So Instagram is here to stay.”
