Where are the customers for retailers?

The dismay and even declining offline retailer’s sales is due to online commerce, it is true? 

If so, how do you explain the throngs of traffic that packed shopping mall 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, that rank the best 50 malls in Singapore, some of the bottom malls are actually prime location that are seen as the best place to set up retail outlets. One example is Parkway Parade. 

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Parkway Parade is packed during the evening and is extremely packed on weekends. So, is Parkway Parade immune to the declining sales, and that their retailers are making good money?

No, the turnover rate (shops closing down) is about the national average from my observation. 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 platforms made readily available to consumers.

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? 

The reason is that 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 mall have become a routine activity, impacting some retail businesses. 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 specialty retailer or a restaurant, this consumption might not uplift your revenue. This change in consumption meant 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. 

For folks that would like the full retail report

About the Author: Ebenezer Heng, have 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 at events such as Food Hotel Asia. 

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