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HOW CAN PHYSICAL STORES IN ASIA BEST DESIGNATE AND FILL RETAIL SPACE ?
With the on-set of the covid-19 pandemic , there has been a massive uproar in online sales for a wide variety of retail sectors , which leads to the critical question of what role offline retail space can still play . Despite the Western term of “ retail apocalypse ”, this does not necessarily happen to the brand or retailer if they are creative and yet responding to consumers ’ latest demands when allocating their offline store space . There ’ s a good saying from Greg Maloney , chief executive for Americas retail at real-estate services firm JLL - “ In 2030 , you ’ re going to see most malls are going to be not considered a mall anymore . They ’ re going to be considered a mixed-use asset .”
In this article , we outline a few ways brands and retailers with offline presence can best utilize their offline store space , namely social responsibility , online fulfillment and experiential retail and education .
For brands and retailers to continue surviving through the covid-19 turbulence , they have to demonstrate to consumers that they are relevant and are caring towards the social community . In terms of relevance , their offerings have to pertain to consumers ’ daily needs . Interesting observations are seen among non-grocery retailers in Hong Kong , where they started having grocery aisles in offline physical stores . Among pharmacies , they are also shifting covid-19-precautionary goods closer to the shoppers when they enter the store , including but not limited to masks , alcohol and most recently covid-19 quick test kits .
Other aspects that brands and retailers can fulfill social responsibility is through offering discounted or free rent to their counterparts . Take US as an example , in Feb 2022 , Denver picked five businesses to open pop-up shops with free rent as well as services worth $ 20,000 . The initiative is designed to bring unused storefronts in the downtown area back to life .
On the other hand , also in the US , the Golden Triangle BID partnered with Mayor Muriel Bowser ’ s administration and landlords to start the Grow Golden program , which matches local small businesses with landlords willing to let them use vacant retail spaces for free for the short term . Very recently , in Hong Kong , the Swire Properties group is also waiving rent for its Cityplaza and Pacific Place retail talents as means of corporate social responsibility .
Increased instances of lockdown and social distancing measures led to more people online , leading to increase in e-commerce orders and constraints on timely fulfillment from distribution centers is having a significant impact on conventional retailers . For many
brands and retailers which often don ’ t have the resource or investment into large scale warehouses , they can consider devoting a portion of floor space into micro-fulfillment centers that can fill and ship e-commerce orders – including orders for same-day and next-day delivery – as well as buy-online and curbside pickup orders , which have increasingly been used by retailers such as Gap Inc . and JOANN Stores .
Given the lack of warehousing space has led to increase in warehouse centre prices over the past year , brands and retailers in Asia should really consider the micro-fulfillment option as an additional venue to fulfil online sales .
Experiential retail and education
It has been well documented that offline experience is still very prevalent to shoppers – they value the opportunity to try and touch products , and that can have a meaningful twist even during the covid period . For instance , pop-up installations put up by luxury brands can attract the young consumers with instagrammable experiences even without staff stationing . One good example is Dyson opening a Dyson Demo retail store in Vivocity , Singapore in early 2022 , which is the largest in Southeast Asia . Products being demonstrated cover the company ’ s main product ranges . Also has a Beauty lab with styling stations and Dyson experts for providing hair styling tips .
In May 2021 , Harvey Nichols ’ brought through a new experimental retail concept in Pacific Place Hong Kong , which playfully brings together fashion , lifestyle , art , and more under one roof . After the young consumers share their experiences on social media , they often create a community that acts as advocating voices for brands . In terms of education , Don Don Donki is definitely doing a good job , which somehow relates to Japanese retail quite generally – for almost category of goods , they outline clearly what the products are good for and how they should be used . During timings where verbal conversations should be limited , having written forms of communications to educate is surely not a bad way to navigate retail .
About the Author :
Terence is Retail Analyst at Hong Kong-based retail innovation company Tofugear . Over the last eight years he has worked at multiple market research firms , including Coresight , Nielsen and Ipsos , as well as at Hong Kong retail giant AS Watson . Terence started his career as Assistant Consultant in Cimigo .