PETALING JAYA: The Malaysia Shopping Malls Association has urged conventional retail outlets to leverage on material strengths that are not available on online platforms.
For example, malls could focus on socialisation, one of the key drivers in the growth of the food and beverage industry, said the association’s adviser, Chan Hoi Choy.
He pointed to experience-creating outlets such as artisanal coffee joints and hipster dining outlets that allowed a high degree of interaction among patrons.
Likewise, he said, engagement was an important factor that could be used to create a positive experience for customers.
Noting that malls had moved on from being just functional to being increasingly experiential due to consumers’ lifestyle changes, he said they should tap into the senses of sight, smell and touch to amplify customers’ visits and humanise or personalise the shopping experience.
Recently, economist Hoo Ke Ping said Alibaba’s logistics hub, which will be operational by 2019, would encourage the growth of online shopping at the expense of shopping malls in Malaysia.
Responding to this, Chan said there was no doubt that online shopping was gaining popularity in the country. However, he said he would like to see a combination of conventional and online shopping to give customers a more complete experience.
“There are instances of malls and shops, for example, amplifying their customers’ experience through the use of technologies like augmented reality and virtual reality.”
According to data from the 2016 Bain Brief and Google’s Consumer Barometer, 14 million people – almost half of Malaysia’s population – researched products and services online.
However, the main challenge faced by e-commerce businesses appeared to be a lack of trust in the platform. Only 29% of consumers converted research into online purchases.
However, Angela Ong, senior marketing manager at Christian Dior Malaysia, said customers usually had no problems purchasing products online if they were already familiar with the brand.
“Nowadays, there are also a lot of younger consumers who much prefer to shop online,” she said, attributing this to a lifestyle that didn’t leave much time for conventional shopping.
On another note, she dismissed the notion that mall tenants would move locations just because of competitive rental rates.
“It all depends on the direction of the brand and whether they need to position themselves in selected upmarket malls to elevate their brand in the industry,” she said.
Margaret Chin, who heads the Malaysian arm of South Korean cosmetic company AmorePacific, said tenants would go for the location’s traffic rather than just the rental rates.
“If the mall has a lot of foot traffic and sales, and I would have to pay a bit more of a premium, I would still pay,” she said. “I would not pull out and go to a cheaper or free rental mall which has less traffic.”
She cautioned that the problem with online retail was the throwing of prices. As online stores have their own sources from countries like China, Taiwan and Japan, price cannibalism would eventually occur, she said.
“But online and offline shopping channels have their own niches and loyal customers. So price cannibalism is minimal.”