Staying Afloat in a Shopper’s Paradise

February 22nd, 2007   •   17 comments   


Crowds thronged VivoCity when they first opened

Recently, quite a few shopping centres in Singapore seem to be left behind in the retail race despite our buoyant economy. Poor customer traffic, contractual spats, tenants going on “strike”, empty shop spaces, decay and disrepair seem to be some of their common woes.

Some are new and spanking. They include Dhoby Xchange, which is strategically located next to the Dhoby Ghaut MRT Station yet attracting hardly a soul. Another recent case is an unnamed shopping mall at Commonwealth Market (to be renamed Queenspoint) which apparently ran afoul of the law. Its owners Pagar Park did not have approval to sub-let its spaces but still went ahead, with 70% of its 150 retail outlets taken up. Now it is tangled in a messy litigation case involving multiple parties including the Singapore Land Authority.
Others have been around for longer like Liang Court, Central Mall, as well as Orchard Road’s Far East Shopping Centre, Orchard Towers and Orchard Emerald. Most would agree that these are faltering at best and hardly in the radar screen of shopaholics. Even the crowds at the almighty VivoCity – Singapore’s largest mall with one million square feet of retail space – are starting to thin barely 6 months after its opening.

Why do some malls fail while others survive and even thrive? Are there lessons that we can learn from the raving successes of malls like Parco Bugis Junction, Ngee Ann City and the evergreen Plaza Singapura?

First, you need to advertise and promote your mall aggressively. Sounds pretty obvious? Well, it isn’t just about sales all year round, but special tie-ups, loyalty programmes, festive deals, lucky draws, mall-wide promotions and other specials to attract the finicky consumer dollar. In the dog-eat-dog world of retailing, its all about generating the greatest top-of-mind-recall and mindshare as shopping tend to be a rather impromptu, spur-of-the-moment decision.

Second, you need to have a certain theme that can be easily identified with. What is your mall’s unique selling proposition? Convenience? Hip and funky stores (Eg Heeren)? Family friendliness (Eg Ngee Ann City and Raffles City)? Music and private schools (Plaza Singapura)?

Third, you need to collaborate with your tenants on mutually beneficial activities. Develop joint promotions and activities that boost customer traffic and earnings. Parco Bugis Junction does this exceedingly well, and have a performance-based element in their monthly rentals. This incentivises both landlord and tenant to work hard in attracting customers.

Fourth, you need to frequently organise mall events. Theme them according to the festive seasons – Christmas, Chinese New Year, Deepavali, National Day, School Holidays etc. You will be surprised at how effective meet and greet sessions with Mickey Mouse or Pokemon are in attracting the masses!

Fifth, you need to have the right tenant mix, especially good anchor tenants that are top draws. Ever since Daimaru closed down at Liang Court, business just didn’t seem the same anymore. Similarly, the forgotten malls of Orchard Road above lack any significant retailers that can generate mass traffic.

Finally, I always believe that there should be fairness and equity in any contractual dealing between landlord and tenant. Instead of calling the lawyers at the first signs of trouble, landlords should try to work out any teething issues with their tenants first. A little bit of give and take never hurts anybody. In the wise words of Mahatma Gandhi: “An eye for an eye makes the whole world blind”.

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17 comments

  1. posted on Feb 23, 2007 at 3:37 AM

    In direct contrast, what I’ve often wondered is how some neighbourhood malls like Tampines Mall and Parkway Parade are always packed to the gill no matter time or day.

    Is it their catchment area? Their tenant mix? Or simply good services such as free shuttle services from underserved neighbourhoods?

    I agree that traditional advertising is not the way to go. Vivocity has splurged on creative ads, but to what avail? The megamall still suffers from bad publicity over its perceived poor facilities such as signage and toilets. They are better served cutting down 2 FPFCs in a daily and using the money on a PR agency instead.

  2. posted on Feb 22, 2007 at 8:53 PM

    Hey Walter,

    Its interesting that you have observed the thinning of the crowd in these shopping districts, and it seems to me that the crowd is moving to the neighbourhood shopping centres. Drop by on a weekday and you will still see the crowd at Tampines Mall, Jurong Point or Hougang Mall.

    One other consideration (actually related to your fifth point), is the availability of famous food! For example, people may not go to Ikea for their furniture, but for their famous meatballs in the cafe!

  3. posted on Feb 23, 2007 at 10:54 AM

    When the malls are not bringing in the traffic, we retailers suffer as well. And the landlords are making excuses to raise our monthly rental despite us not getting much business. It takes two hands to clap.

    With so many malls opening, customers have more choices and competition is hotting up. Do customers get a good deal out of this? That’s for them to find out, hopefully not the hard way.

  4. posted on Feb 23, 2007 at 11:53 AM

    kian ann,

    Thanks for popping by! Yes, agree that the neighbourhood malls seem to be doing well, especially Tampines Mall, Tiong Bahru Plaza and of course Compass Point and Bishan Junction 8. I think the cinemas may have played a role there, and the tenants like NTUC Fairprice, Cold Storage, and major shops. Proximity to MRT also counts somewhat, although Dhoby Xchange is a mystery.

  5. posted on Feb 23, 2007 at 11:58 AM

    daniel,

    Interesting views on VivoCity. I have been there at least 7 times so far due to its proximity to my house. Each time, it seems to be losing some of its lustre. My family love some of the restaurants there so we go quite often (plus they are not that crowded!). Service failure is certainly a key issue. In fact, I blogged about it before here.

  6. posted on Feb 23, 2007 at 11:59 AM

    eastcoastlife,

    I agree with you completely. In my 4 years working in an SME promoting agency, I have heard lots of such stories before. OK, its certainly time to make an appointment to visit Adelphi and your hubby’s shop! 😉

  7. posted on Feb 23, 2007 at 7:50 PM

    Hi Walter, my observation is that the malls that thrive in Singapore share one common feature — there’s good food, or at least some semblance of variety. I think that’s key, in Singapore’s context.

  8. posted on Feb 24, 2007 at 4:19 AM

    yeah yeah I agree with Ivan tho…good food like food court and perhaps a cinema or like a supermarket can attract crowd. Look at The Cathay for example…I think the reason why they ain’t doing so well is because they dun have a good food court..and whenever I go watch a movie there…I M HUNGRY AND I WANT FOOD!! 😉

  9. posted on Feb 24, 2007 at 10:31 AM

    One thing that my wife and I observed is almost all the shopping malls here are offering the same products or services by the same big boys.

    Bigger, nicer malls may be attractive when it opens its door but the sustaining factors have to be there to convert those first time shoppers to someone that seek thrills to find out what new offers of products or services are there.

    I believe many will agree with me that in bangkok MBK, there are always a lot of different things to see, to be enticed with and just get it going for the shoppers. Here in Singapore, the scene is just the same for all malls. 🙁

  10. posted on Feb 24, 2007 at 1:16 PM

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    Protect children on the internet. Write a post on that leh! Go read my blog for details.

  11. posted on Feb 24, 2007 at 2:44 PM

    ivan and jason,

    Food FABULOUS food is certainly a numero uno reason for many people to visit the malls. The cinemas also help although sometimes the right combination and mix can be a tricky matter. I love to visit Ngee Ann City precisely for the food not only at the restaurants but at Basement two of Takashimaya where the food fair section always have something special – especially during Christmas!

  12. posted on Feb 24, 2007 at 2:48 PM

    paddy,

    I can’t agree more with you! As I blogged in a recent post about Bangkok here, our shopping centres just don’t have that same variety as what they have. Similarly, other Asian cities like Tokyo, Hong Kong, Kuala Lumpur and even Ho Chi Minh City in Vietnam have a more varied, eclectic and interesting mix of retail, F&B and service (massage, spa) outlets that we can ever hope to achieve. Their cafes are also much more chic and the cakes tastes better too!

  13. posted on Feb 24, 2007 at 2:52 PM

    eastcoastlife,

    I’ll go check it out.

  14. posted on Feb 25, 2007 at 2:24 AM

    The positioning of these malls have to be as clear as possible and be different from each others too.

    For example, when you wanna buy dinner and dance clothes … you should go to this XXX mall, cos it has many stores selling them and gives you choices to select from. And not the, lets go walk walk and see how lor. Which is the common problem where consumers are lost on which one to go to.

    If we want to get a printer and a place where there’s wide selection, does Sim Lim Square rings a bell? Or Jurong Point Entertainment centre comes into mind? I believe SLS is the place to be.

  15. posted on Feb 25, 2007 at 8:33 AM

    For drivers, offering free parking at least for the first hour during lunch time, is a very nice gesture and costs next to nothing to a megamall like VivoCity. Recently, I think it revoked this incentve. I drove there last week and ended up paying $2.20 for slightly over 1 hour parking. (It used to be free or $1.10 at most). That is one of the contributing factors to the thinning crowd at VivoCity, in my opinion.

  16. posted on Feb 25, 2007 at 3:19 PM

    paddy, agree with you on the positioning of malls. Sim Lim Square is certainly still packed to the gills with people. Similarly, Tiong Bahru Plaza focused itself on shoes and footwear and it is still doing rather well.

  17. posted on Feb 26, 2007 at 3:18 AM

    Interestingly Parkway Parade doesn’t have a cinema (but it has great food!).

    High rentals will spell the death small businesses in Singapore. Only big retail chains with deep pockets can continue investing in spaces in new malls.

    I’ve given up shopping for many things in Singapore. With $500 I can go to Bangkok over the weekend, stay in a decent hotel, eat good food and get great shoppoing loot to boot. And I get to buy from small retailers that offer unique and a wide variety cheap goods that I can’t find here in our malls.

    Just waiting for the retail scene here to implode. You’ve been warned. ^^

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