The secret to happiness is to spend money on experiences and not things, says Thomas Gilovich, a psychology professor at Cornell University. One of the enemies of happiness is adaption, he says, and new things are exciting until we adapt to them. Experiences, on the other hand, are said to linger in our memories, resulting in storytelling and conversation, and enhancing social relations. In fact, the anticipation of an experience can be gratifying by itself. Experiences also elicit fewer social comparisons than material goods.
Experiential retailing has been touted as the antidote for dying retail malls. Malls, as such, need to reposition themselves from the “places to buy” that they are now to “places to be”, says Stephen Lampert of retail and brand consultancy FITCH.
The responsibility of creating positive experiences for shoppers lies with retailers as much as with landlords. Lampert names Lenox Square in Atlanta, Georgia, the US as an example. The mall positions itself to attract well-heeled, active and affluent women in the northern Atlanta suburb and some retailers pull out all stops to engage them. Williams-Sonoma, a premier retailer in home furnishings and gourmet cookware, holds regular cooking classes while ivivva, a sports apparel label created by lululemon, has a list of fitness events on its Facebook calendar.
Boutique fitness studios, artisanal culinary workshops and halls of learning, plus instagrammable moments, would take shopping experience to a new height and bring some lustre back to jaded malls
Photos: Y7 studio (left) and Williams-Sonoma junior cooking class
This might pose a conundrum to mall landlords, who would be confronted with the choice of offering bigger space to a few retailers versus letting them out to more retailers, which could generate higher rents. The key, perhaps, is to work with retailers that Lampert calls “temples for devotees”. A classic example is the Apple store, a place dedicated to serving customers and where product sale is secondary. Apple also has a host of events and workshops on its calendar, including Discover Apple Music, iPhone Photography and Power Your Workday with iPad.
Malls with an Apple Store are said to rake in 13% higher sales per square foot than those without, according to a Bloomberg article, citing data from Green Street Advisors. A Tesla store is said to have similar effects and Lenox Square is home to both brands. The mall also features Neiman Marcus, considered a more productive department store compared with JCPenney, Macy’s and Sears.
Apple stores are a crowd-puller for malls around the world. Create “temples for devotees” to turn malls into places where people want to be, say Lampert
Turning e-commerce from foe into friend
A closer look at the Lenox Square website unearths other interesting trends. To engage shoppers online, the website features a lookbook page showcasing what is trending for the week and where to shop for the looks.
One of the posts reads, “Our fave gowns from the Oscars”, accompanied by a picture of Emma Stone in her Givenchy dress. Forever 21 has a beauty hack video on the page with an online link to show customers where they can purchase the products.
Another post, by Victoria’s Secret, reads, “Last Chance to vote Heavenly for Best Fragrance in the Total Beauty Awards!” along with an online link to the poll page. That same post, which features two Victoria’s Secret angels, has attracted 4,000 likes, 69 shares and 32 comments on the retailer’s Facebook page. Lenox Square could potentially convert the interests generated online into a higher footfall for the mall. The page is updated so frequently that the Oscars post no longer existed the following day.
A screenshot of the lookbook page on Lenox Square website
Source: Lenox Square
Back home, Singaporeans would be familiar with the CapitaStar app, which allows customers to accumulate STAR$ from purchases made in participating CapitaLand malls and exchange them for CapitaVouchers or other promotion gifts. The CapitaStar app is said to be more than just a reward programme to retain customer loyalty; it is also a tool to gain insight into customers’ spending profile and preferences.
CapitaLand has also stepped up its technology capabilities as bricks-and-mortar retailers continue to grapple with competition from e-commerce. On Nov 1, the group started an artificial intelligence “chatbot” called Sparkle on its CapitaStar platform, offering virtual concierge services such as making restaurant bookings and answering queries from customers.
Lenox Square in Atlanta, Georgia
Photo: Simon Property Group
Centre of learning?
From pop-up stores to augmented reality, a host of new retail trends from around the world are gaining traction among shoppers. Several trends, however, would resonate with the local retail sector more than others. These trends would be those that serve Singapore’s demographic profile and the immediate needs of the economy. According to Euromonitor, the “middle youth”, aged between 30 and 44, form the largest segment of the population. Many in this age group are on the lookout for better career opportunities, the report notes. To cater to this group, future malls can be positioned as a one-stop learning and leisure destination.
A survey by international recruitment firm Randstad found that 84% of Singapore respondents saw the need to acquire more digital skills to guarantee future employability, surpassing the global average of 64%. The latest data released by the Ministry of Manpower showed a total of 19,000 workers were laid off in 2016, the highest figure since 2009. Unemployment rate rose from 1.9% in December 2015 to 2.2% last December. On the other hand, organisations in certain sectors such as IT and healthcare struggle to fill positions, suggesting a skills mismatch.
To catalyse learning among working adults, perhaps malls should play a bigger role in education. Future malls might consider having a dedicated space for schools and free study area with charging stations and WiFi. With these in place, an adult learner need not waste time commuting to various places to fulfil his learning and leisure needs. This could be a public-private partnership project by mall developers and government agencies and the non-income-generating space should be exempt from property tax.
Integrating learning with leisure activities would also allow “chance encounters” and “informal gatherings” among students, which would promote collaboration and potentially innovation. In the same vein, universities have provided for generous public spaces and amenities where students can commingle and network.
The idea is simply an evolution of existing concepts. Funan and Downtown Gallery, for example, have injected co-working space into their tenant mix. Meanwhile, co-working space provider Spacemob has roped in General Assembly, a digital education provider known for spawning entrepreneurs, as its anchor.
Separately, Euromonitor projects that mid-lifers aged 45 to 59 and late-lifers aged 60 and above would experience the steepest growth owing to baby boomers entering these age groups. Boomers, particularly women, enjoy bargain-hunting as a thrill, according to a survey by Euromonitor. Owing to age-related health concerns, they are more conscious of the ingredients in the food they consume, compared with younger respondents. One in three female boomers is said to be attempting to lose weight, but when it comes to maintaining an active lifestyle, they prefer low-impact exercises such as walking and yoga. Meanwhile, an older study by Council for Third Age shows the top five activities for Singapore baby boomers during their free time are watching TV, shopping, reading, cooking and baking.
Perhaps global trends such as boutique fitness studios, artisanal culinary workshops and halls of learning, which resonate with consumers across age groups, would bring some lustre back to jaded malls in Singapore. Lastly, some elements of surprise should be thrown in for instagrammable moments.
Lampert says two trends dominating the cultural, social, and commercial landscape - the “Instagramming” of life and the renaissance of craft. "The two trends are symbiotic. The binge culture of social media is spilling-out into what consumers look for in their retail experiences. As a counter-balance, there is an equally-powerful trend towards craft – towards authentic, back-to-basics experiences - like old school barbershops, vinyl records, 'ulu' coffee shops, hand-stitched leather goods, yoga, and farm-to-table dining," he notes.
In Singapore, at least two malls appear to be stepping a similar direction. Funan DigitaLife Mall is being revamped into a live-work-play destination. When completed in 2019, Funan will take visitors’ shopping experience to a whole new level with an indoor cycling path, rock-climbing wall as well as an experiential cinema and a smart food court. The mall will also offer a drive-through click-and-collect, and hands-free shopping service, whereby shoppers can choose to either pick up their purchases from Funan’s concierge when they are done, or have them delivered to their homes. At Downtown Gallery, luxury, bespoke living and wellness will form the building blocks of the mall, which will feature a social kitchen, eight boutique gyms and a farmer’s market by The Providore.
This article appeared in The Edge Property Pullout, Issue 769 (Mar 6, 2017) of The Edge Singapore.