Whereas shopping centres and malls in the United States and Europe have been closing or are being deserted by clients and retailers (vacancy rate of 9.3% in the U.S and 10.7% in France in 2018 – Source WSJ and Procos) , their future in Asia Pacific has never looked brighter, particularly in financial hubs Hong Kong and Singapore.
What are these shopping malls offering that their western counterparts aren’t? We’ve pinpointed three outstanding features all boiling down to a common factor: merging technology with data analytics.
A premium experience for all
Malls in Hong Kong deliver a premium experience to all customers regardless of their shopping budget, whether they’re shopping for fast fashion items at H&M, Zara or Abercrombie or for luxury goods at Chanel or Cartier. Where living quarters in the city are notoriously small and cramped, malls by contrast are vast and carefully laid out. They are pristine, diffuse perfume (each mall has its own signature fragrance) and play soothing music. Everything is done to ensure consumers associate malls with wellbeing and positivity intertwined, alongside their shopping experience.
Hong Kong shopping malls have understood that shoppers seek an experience to counter the convenience of online shopping (such as competitive pricing, items available only online or free delivery). To offer a positive experience, one can find concierge services and staff on different floors to help direct clients, manage restaurant reservations, lost & found and even lending of umbrellas.
To leverage this premium experience, brands should ensure they adopt integrated strategies that allow consumers to navigate seamlessly between their online and offline channels, such as by offering pick-up in store or reserve-and-collect options. By using data analytics to further their understanding of the consumer journey, brands can improve their value proposition to consumers.
Technology can be used by both brands and malls to enhance the shopping experience
Hong Kong is an internet-savvy city and malls have embraced this by having smart systems of their own, such as touchscreen maps and mobile applications which include updates on new stores, loyalty programmes and brand updates. Mall loyalty programmes in partnership with brands occupying their space make for a good omnichannel customer experience and help increase transactions per visitor and returning visits. Members of these programmes can collect points when shopping in the mall facilities and redeem offers from their favourite stores through gifts vouchers, coupons or even valet parking, depending on the amount of their spending and their shopping behaviour.
Because mall traffic is highest on weekends, the strategy adopted in Hong Kong has been to keep people inside shopping centres for as long as possible by offering a range of activities on top of shopping. Playgrounds, rooftops, cinemas, exhibits and events are common features in malls. They host Michelin starred restaurants, tea rooms as well as breathtaking views on the city all in one place. The red bar of the IFC mall or the free observatory deck of Harbour city for instance bolsters views of Hong Kong’s skyline. The Landmark in Central regularly organizes exhibitions in its main atrium.
E-commerce brands can also take advantage of opportunities to interact with consumers thanks to concept stores and pop-up exhibitions. In fact, 32% of retailers on the Asia market in 2018 indicated they would be considering pop-ups as part of their omnichannel marketing strategy (Source: Warc). Havaianas, for example, the Brazilian sandal brand which does not have brick-and-mortar stores in Hong Kong (it sells through distributors and online), has launched for a second time a two-month pop-up shop in the chic Pacific Place mall: offering a wide range of choice in products coupled with food and drinks.
This type of experiential marketing provides an excellent opportunity for brands to reinforce their value offering, allow consumers to touch and see their products, and provide exciting brand experiences that create long-lasting connections. These physical interactions also provide brands with a wealth of data insights which can then be used for retargeting consumers and for driving conversion.
Data analytics can benefit both brands and malls
A shared and combined use of analytics can benefit both malls and brands. By collecting data analytics on the behaviour of shoppers such as how much they spend and where, their walking flow, time spent in stores or in the halls, malls are able to readjust leasing prices to stores tenants accordingly while brands gain insights on how shoppers move around their store and where to put their display contributing to a consumer-focused business approach.
Additionally, malls in Hong Kong ensure solid monthly revenues from low-risk tenants by renting out space to offices. International banks, Silicon Valley giants and prestigious law firms can be found on upper floors. This secures the daily presence of high-earning shoppers in their space; employees just have to take the elevator down or walk across the hall to shop during their lunch break or before and after work hours.
This is not possible in the United States, where the location of malls isn’t attractive to such companies. American malls are often found outside of city centres on huge concrete parking lots near highway exits. Access to these malls requires a vehicle and a minimum twenty-minute travel time. Malls in Hong Kong on the other hand are transportation hubs. Major metro stops have exits that lead straight into malls, such as Admiralty for Pacific Place, Causeway Bay for Times Square or Central for the IFC. Airport and ferry connections also branch out from malls. The lack of local e-commerce sites in Hong Kong can be attributed by the geographical convenience of malls as a contributing factor.
In the United States, customers go to malls with a specific purpose, because they want or need to purchase something. In Hong Kong, they go for an experience: grabbing their favorite coffee with a view or checking out a pop-up store which might eventually lead them to enter surrounding shops and buy as a side result. While American malls are focused on functionality, Hong Kong malls tap into people’s emotions and pleasure. Investing in data collection methods from tools – such as email marketing, points of sale, beacons, cameras and wi-fi usage- is the future of continued business growth in-line with consumer habits and expectations.