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The dismay and even declining offline retailers' sales is due to online commerce, is it true?

If so, how do you explain the throngs of traffic that packed shopping malls during a weekend? They are not buying things online but shopping in the offline retail shops right? 

While, it is true that online commerce have taken a portion of sales from the offline retailers, the main problem is the change in consumption pattern. The shoppers are not shopping in the same way as they were a decade ago. 

If you look at the top 50 malls reports - a ranking of the best 50 malls in Singapore - some of the bottom malls are actually in prime locations that are seen as the best places to set up retail outlets.

One example is Parkway Parade. 

Parkway Parade is packed during the evenings and is extremely packed on weekends. So, is Parkway Parade immune to the declining sales, and are their retailers making good profits? No, the turnover (retail closure) is about the national average. There are shops that do not make money and if you walk around there, the traffic centers on a few areas. 

There are a few changes to the consumption pattern mainly due to the online and social media, in this article I will discuss one - routine purchase. Isn’t it interesting that the report that tracked sentiments (positive or negative) about this location shows such negativity but this location is still packed with people? 

Why would people want to go to a place that they don’t seem to like going? 


This article is an extract from a keynote for Malay Chamber of Commerce | 21 September 2016 


The reason is because this location is the most convenient despite the “inconveniences”. People are going there to do their routine purchase, their grocery shopping, sending their kids to enrichment classes or having their meals. Some years back, this is not the consumption pattern. Shopping mall is a destination and window shopping is an activity. 

With the many heartland malls that have sprung up over the years, going to malls have become a routine activity and this will impact some retail business. If you are in the consumption belt, e.g. supermarket, enrichment classes or food courts, you will still enjoy good traffic and “location, location, location” still works for you. 

But if you are a speciality retailer or a restaurant, this consumption might not increase your revenue. This change in consumption means that you have to relook at the traffic that location brings you. Your business must not depend on the location’s traffic,your marketing must be geared towards making your outlet a destination. 

I will share in my subsequent articles about the process in making your outlet a destination. Or, you can join us for discussion in one of the F&B seminar/workshops where we craft the process in making outlet into destination. 

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About the Author: Ebenezer Heng, has trained and consulted many F&B, FMCG brands in subjects such as Location Attractiveness, Right Price Framing, Narrative setting. He works with various tertiary institutions to assist their students in their entrepreneurship projects for funding.  He speaks regularly at Singapore Chinese Chamber of Commerce, Malay Chamber of Commerce and events such as Food Hotel Asia. 


Singapore Cafes Guide AR

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Posted by Ebenezer Heng on Monday, July 13, 2015

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