[TMG Exclusive]
by Elias Wee
NO DOUBT about it, Singapore malls are struggling. Headlines have been screaming about high rents, vacancies and questioning if perhaps the problem is that, ironically, we have too many malls.
But what about malls being too similar? Speaking to TODAY last year, Mr Kesri Kapur, head of business in Asia for the Al-Futtaim Group, said malls here offer “similar types of stores”. He added: “There is not enough differentiation in the stores. For such a small market, if it’s to be viable in the longer-term and sustainable, there has to be some differentiation [among] the stores.”
However, what does the real data look like? TMG looked up the shopping directories of 20 malls across the island to find out.
From the 20 malls, just over 2,000 shop brands were counted, and more than 30 per cent of them had appeared at least twice. Which shop brand is most ubiquitous? Starbucks appeared 20 times in 20 malls, with some malls carrying more than one Starbucks cafe.
Shops with the Cotton On brand came in joint second (with Watsons), at 18 times in 20 malls. According to ST, the Cotton On Group in Singapore looks set to further expand. Uniqlo has expanded rapidly over the last few years too, with 24 stores islandwide currently and a global flagship store coming up in the third quarter of this year.
Out of these 20 malls, 65 per cent of shops were of brands that appeared at least twice. About 50 per cent, appeared at least thrice. A whopping 40 per cent appeared at least four times. What do these numbers mean? If you visit different malls across the island, you’ll see that a significant share of shops are being repeated again and again.
Refer to the infographic below to see our findings:
Why do shopping malls carry the same shop brands?
Mr Gary Nonis, National Director of Retail for JLL, an investment management company specialising in real estate, said: “These brands have strong financial standing and proven track records. This provides landlords with income certainty from a risk management point of view.”
Sometimes, shops may be “staple brands, which can generate the pull of foot traffic due to a ready following”, said Mr Nonis. Staple brands – like Starbucks, Uniqlo, Cotton On – “appeal to a larger target market, being familiar to a larger audience”. He added that a brand’s business model could play a part too. “Some tenants operate a volume of business on thin margins, hence they would need to expand rapidly and extensively to gain market share.”
Some shoppers seem to agree. Mr Paul Wong, 41, a manager, said large organisations managing malls may duplicate proven concepts that can draw customers in. Mr Karthik Abirajan, 23, a university student, said: “I guess maybe they’re making profits, so they’re happy not to change. If there’s appeal for the same brands, then why change? Just stick to the game plan I guess.”
But what is cookie-cutter?
TMG’s findings grouped shops according to brands. This is one way to investigate whether malls are “cookie-cutter” – that is, similar, generic, without sufficiently distinguishing characteristics. But do you personally make a distinction between different chain brands – like Starbucks, Coffee Bean & Tea Leaf, or Spinelli, for instance? Would you group similar brands together, because they offer similar products? Or do you perceive them as being sufficiently differentiated?
For some shoppers, similar brands are fine. Take Ms Janet Lin, 44, a homemaker, for example. She said that she appreciated how “some brands made an effort to differentiate their merchandise”. She added that even different shops within the same brand may provide slightly different experiences too. For example, popular bubble tea brand Gong Cha’s Bugis+ store, called “Royal Gong Cha Cafe”, offers a more upmarket range of drinks and other foods in a cafe setting, unlike the regular, largely takeaway shops.
Other shoppers like Ms Yeo Xue Ting, a 21-year-old undergraduate, thought that in some cases, it is good to have some brands repeated across different malls. She said: “It’s good that established brands can be found in neighbourhood or heartland malls too, because it means I don’t have to travel all the way to town to do my shopping.”
Mr Allen Chan, 44, a chef, acknowledged that he has seen some shop brands “mostly repeat and repeat again”, but added, “as long as I can get my things, then why not?”
Not just tenant mix
There’s more to shopping malls than just the tenant mix. Mr Nonis said: “Yes, it does come across as cookie-cutter from a tenant range point of view. However, each mall typically focuses on a point of differentiation, which can come from a positioning, branding or even promotional standpoint.”
For Singapore’s largest shopping mall owner and manager, CapitaLand Mall Asia, the selection of retail tenants is not the only important factor. Ms Teresa Teow, its Head of Retail Management, Singapore, said that its “shopping malls are becoming one-stop lifestyle destinations”. In addition to traditional retail shops, different CapitaLand malls provide different “leisure and entertainment options”.
Ms Teow provided examples of CapitaLand malls that host different activities. Bukit Panjang Plaza will host interactive street art performances from Australia. Funan DigitaLife Mall will host the Funan Anime Matsuri, a week-long Japanese pop culture event. Westgate’s Kids Club conducts daily workshops that teach children bracelet making, bubble painting, and cookie baking. She added that different CapitaLand malls provide different “community facilities”, whether it be an Olympic-size ice skating rink, a dance theatre, or a public library.
Frasers Centrepoint Malls, which manages malls like Changi City Point and Waterway Point, agreed. A spokesman said that apart from shopping, malls need to create spaces for the “community to come together”. For example, the wet and dry play areas and “hang-outers zone” at Changi City Point; the community centre within the new Northpoint City; green spaces at The Plaza, and 24-hour boardwalk at Waterway Point. The spokesman added: “Ultimately, retail has to be a social experience that visitors can connect with.”
What’s coming up?
“Shoppers are likely to see more pop-up stores, which will refresh the mall mix over time,” according to Dr Lee Nai Jia, regional director of research for real estate consultancy DTZ Singapore. He said that these shops – with short term leases of typically three to six months – “inject vitality into the retail scene” and “keep consumers interested”. He added that the retail experience will be more interactive and customised.
Mr Nonis agreed and added that shopping malls here will continue to look for local and overseas “new-to-market brands” – like Hamleys (Plaza Singapura) and Rue Madame (Takashimaya) that opened in 2015 – because these brands can create hype and generate traffic.
As a shopper, what do you think? Tell us.
Featured image Singapore by Flickr user jo.sau. (CC BY 2.0)
If you like this article, Like the Middle Ground‘s Facebook Page as well!
For breaking news, you can talk to us via email.
The post Are shopping malls here too cookie-cutter? appeared first on The Middle Ground.