INSIGHT

Today's malls, tomorrow's social spaces

Today's Malls, tomorrow's social spaces

With changing retail trends, and malls and brands competing for the consumer’s attention; how will the retail space evolve to address these consumer patterns and trends?
 
Traditionally, mall development in Singapore has been commercially driven; its primary purpose to stock and supply products to consumers in an idealised, conditioned indoor space – generating the highest amount of revenue with the least inefficiencies in cost or space. These were seen as a positive replacement of chaotic, unregulated marketplaces. In the context of an increasingly competitive consumerist culture, and the lack of differentiation between mass-market retailers, shopping malls can no longer simply focus on providing relevant consumer products in a controlled environment but must craft the user experience to entice multiple visits. Furthermore, market demographics are shifting, with shoppers become younger. They have more sophisticated demands and place a higher premium on individual identity. It is time malls revisit their social roots and origins which evolved out of marketplaces and souks, highly social in nature with much face-to-face interaction between visitors and sellers.
 
The Evolution of Shopping: Habits of the Millennial

Born between 1980 and 2000, millennials represent a key retail demographic as the 20th century’s first truly digital generation, ever-connected and raised on mobile phones and the Internet. As they come of age and enter the workforce, in terms of spending power, millennial buyers are projected to spend an annual $1.4 trillion by 2020[1], which poses new challenges to retailers if they wish to customise their marketing and sales strategies for this new age group, which in turn impacts the design and experience of a store.
 
Shop designs have to cater to the consumer’s changing needs. To provide them with an experience they desire, designers need to consider how millennials think, and what influences their decisions – from going to a store, to what they purchase. In the 2012 “Talking to Strangers: Millennials Trust People over Brands” study conducted by social media software service Bazaarvoice, in partnership with The Center for Generational Kinetics and Kelton Research, 84 per cent of millennials contemplating a purchase are likely to be influenced by online user-generated content and anonymous reviews by strangers, over recommendations from friends, family, and colleagues. Sixty-five per cent of millennials believe that user-generated content offers an honest view online, with 86 per cent believing it is a reliable indicator of quality. In contrast to the traditional baby boomers, millennials are digital natives who feel at home with the Internet, relying on it to make decisions that are part of their everyday routine, including shopping. 
 
This means that e-commerce will continue to grow in popularity, so the physical shop and mall would have to offer something that cannot be bought online or experienced digitally. Virtual changing rooms online can help you visualise an outfit in your size, eliminating the need for a physical changing room in a store. Increasingly, retailers and malls will have to offer differentiated experiences, and be more experience or event-driven to generate interest rather than simply focus on products.

[1] Accenture, Outlook Journal 2013, No. 2 https://www.accenture.com/us-en/outlook/Pages/outlook-journal-2013-who-are-millennial-shoppers-what-do-they-really-want-retail.aspx
 

Water display at Emaar Square
Paragon Interior
Wisma Atria
The Rise of the Individual

The millennial generation perceives brands differently compared to Generation X (people born between the 1960s and the 1980s) and the baby boomers before them. Concerned with individual identity and expression, there is a greater tendency for the millennial generation to display ‘identity loyalty’[1]. If a brand is able to make a deep connection with the millennial consumer, the brand will become part of who the person is, regardless of product. According to Boston Consulting Group, 40 to 50 per cent of U.S. millennials agree that brands should say something about who they are, their values and where they fit in, with 59 per cent of millennials reporting that the brands they bought reflected their style and personality[2]. Millennials do not want to wear the same label or collection as everyone else, which means product manufacturing and mass marketing will be more difficult for brands. Product designs, marketing campaigns and everything all the way down to the in-store experience will have to be tailored individually.
 
Cult or speciality retailers and brands will become more popular. Each store will have to be more customised and offer different product lines and collections, or experience.
 
[1] Americus Reed, “How Millennials Think Differently About Brands”, https://knowledge.wharton.upenn.edu/article/how-millennials-think-differently-about-brands/
[2] BCG U.S. Millennial Supplemental Consumer Sentiment Survey, 2013. httpss://www.bcgperspectives.com/content/articles/marketing_center_consumer_customer_insight_how_millennials_changing_marketing_forever/?chapter=3
 

 Going ‘Smart’ & Moving Forward with Concierge Consumerism
 
The continuing advancement of consumer technology will be a game-changer, particularly the rise of Big Data. Such progressive technology and analytics influences everything for brands – from reaching out to their consumers through marketing activation, decisions on store location and product inventory.
 
The age of Big Data will help to make marketing and sales more precise. Currently, lead generation is still reliant on the collection of leads via mailing lists. This means that each subscriber would get a generically designed email newsletter and marketing messages, only based on what the customer reveals about themselves on the subscription form.
 
With Big Data, consumer data will be much more sophisticated and detailed. Brands will be able to tell from transaction history and data what products and colours the customer prefers. Each store has the potential to create more personalised and customised experiences based on customer flow to the store, demographic data, purchase patterns, a customer’s product preferences and the types of consumers coming to the store, whether they are locals or tourists. Such data will help to streamline retail operations and optimise resources through targeted sales and marketing, by pushing out particular products in one store to that particular target segment. The store could evolve to cater to the demographic’s needs, stocking only particular products to suit their target audience. Creating novel, individualised and different experiences with different product lines at each retail branch will provide the millennial consumer with a reason to visit.
 
The shopping experience could also become more interactive to appeal to these digital natives, incorporating digital media with physical products, such as changing rooms equipped with the ability for users to capture and upload their outfits on social media to crowdsource comments and opinions.

The future of retail lies in enhancing the real-life shopping experience.

Mike Lim

 

A Designer’s Response: The Evolution of Retail Space
 
In the light of these developments, retailers face new challenges in rethinking their branding strategy. Both individual shop units and malls would have to establish a strong, differentiated creative identity in a competitive retail landscape, which includes the digital space, in order to retain footfall through repeated visits.
 
The Brick-and-Mortar Shop
In response to these changing needs and demands, display shop fronts will play an even more prominent role in attracting potential customers and footfall. Strong branding and an overt creative identity is essential in order to appeal to millennials instead of cookie-cutter stores.
 
Shop units will also become smaller due to high rental, which will cause retailers to consider more efficient use of space. Since the brick-and-mortar store will shrink in size, retailers would have to be more focused and targeted in their product offerings, as mentioned earlier. They would also have to capitalise on Big Data to do targeted, sophisticated customer profiling to derive a better idea of the inventory they truly require, according to what customers want, and maximise storage space.
 
One of a kind ‘flagship stores’ will grow in importance, to offer exclusive collections and products that cannot be found online, in order to draw millennials into the stores. Shop spaces will also become physical marketing platforms for new product launches, focusing on drawing people in through exclusive events to reward loyal customers, for example. Loyalty marketing will become critical in order to encourage and sustain regular footfall to the stores. As such, the interior design approach should also cater for customer-centric retail experiences.
 
 

There are five other strategies that the brick-and-mortar stores can use to differentiate themselves:

1. Telling the Story

Shops can shape and create experiences. The in-store experience can become immersive, through the staging of meaningful exhibitions and events by marrying art and storytelling with commerce. The store can be a physical space that can double up as a gallery, showcasing curated storytelling on the brand’s history, behind-the-scenes productions and serve as a knowledge-sharing platform. Brands need to go deep beyond products.
 

2. Physical & Digital (‘Phy-gital’)

This involves providing an integrated multimedia, interactive digital experience in retail stores, and using digital technology to beautify and differentiate products and displays.
 

3. Get informed

The retail store can be more than a physical space for sales and the display of products – it can be a place of information and education. It can be a place to learn, get real-time updates, explore possibilities and explanations of product design and share knowledge. For example, Apple dedicates their entire second floor of retail to one-on-one personal service and sharing, also known as the Genius Bar.
 

4. Be purposeful (Shared Economy)

See the store as a place to support and foster human creative talent. The physical store can be a platform for kick-starting a creative career in retail, business or design. Young talents from educational institutions could be given the opportunity to take over a physical boutique temporarily to showcase their collections and designs.
 

5. Get differentiated

Expand on differentiating the store’s identity above and beyond retail product offerings, by tying up with hospitality or F&B brands to provide unique in-store experiences and services. These can include roving retail concepts, trunk shows within hotels, drive-through and pop-up/pop-in concepts.
 
To challenge the success of e-commerce, shops must get back to the fundamental difference between the benefits of e-commerce and the brick-and-mortar retail experience, by capitalising on the physical experience, and the human possibilities of the brick-and-mortar experience that is irreplaceable. The future of retail lies in enhancing the real-life shopping experience.

The Shopping Mall
 
To help drive footfall and sales, digital and omni-channel eco-systems can be developed within a shopping mall, to better support the shopper’s experience and transform it to become more of a concierge retail experience. This covers everything from interactive wayfinding within a mall, to mobile apps, websites and Customer Relationship Management campaigns.
 
The shopping experience will become more integrated. In recent years, it is becoming commonplace to see F&B concepts integrated with retail, but moving forward, entertainment, hospitality, events and exhibitions options could also be included within retail.
 
Since millennials are comfortable with multi-tasking in a single space – the sight of students studying at cafés and fast food restaurants while texting their friends is a good example – spaces will no longer need to be so clearly defined for particular activities. The boundaries between F&B, shopping and lifestyle spaces are becoming blurred, and mall spaces have to become more multi-functional and flexible. Consumers no longer just go to malls to shop. As a result, the tenant mix within malls is becoming more diverse and includes more non-retail tenants, such as F&B, lifestyle outlets and social spaces.
 
The shopping mall space is fast becoming a place of gathering, where people congregate, eat, drink and meet loved ones. Malls are becoming more social, a place for interaction and networking rather than simply a commercial space. The layout of the mall thus has to be flexible to offer spaces suitable for social events, such as multi-label pop-up retail events, exhibitions, multimedia experiences, shows and performances. For example, Nike planned its pop-up events in physical stores to coincide with major sports events worldwide, and during the Grand Prix Season in Singapore, Tag Heuer held a promotional event in Paragon mall, while Ferrari held a special exhibition of its cars in Wisma Atria. Hermes also hosts breakfast and dinner events as a way to get closer to their consumers, providing them with unique experiences. Such concierge-like or bespoke experiences give malls and brick-and-mortar shops the X-factor over e-commerce. Instead of worrying about e-commerce, retailers can think about ‘s’-commerce – social commerce to appeal to targeted groups with interesting activities.
 
To support the social and lifestyle needs of consumers, malls should include the necessary F&B hangouts and retail outlets, but also make provisions for childcare, a library and elderly care facilities. Increasingly, a space that allows for convergence and integration of multiple needs is key. This also goes back to the mall’s origins as the ‘marketplace’, which is dynamic and social in context, as compared to the modern commercial space it has become.
 
With the rise of e-commerce, if big brands focus on expanding their operations online, malls have to become more creative in redesigning mall layouts to offer smaller shop spaces for local entrepreneurial brands to ensure a variety of retail stores and regular footfall. This is also in line with the millennial consumer’s preference for cult retailers and speciality stores.
 
Looking to the Future
 
Aesthetically, it is becoming important to optimise the retail experience with memorable elements or iconic, representative spaces to give character to a mall and appeal to a savvy young generation.
 
Both retailers and designers should foster frequent mutual dialogue and conversation to address these future needs and trends, in such a fast-paced industry.
 
Keeping in mind the shifting consumer demographics and patterns, retailers are encouraged to broaden the designer’s metrics for success to include non-commercial metrics and fulfilment of social objectives.
 
In a time when online shopping networks are seen as king, only fresh interpretations of the spatial experience of a physical mall that would attract visitors. And the conversation must continue.
  
The essayist is the director of DP Design, a subsidiary firm of DP Architects that specialises in interior design and space planning services.
 
Some of these ideas were reinforced at INSIDE World Festival of Interiors in 2015, the sister event of World Architecture Festival. A summary and follow-up Q&A with Interior Design magazine can be found here: https://www.interiordesign.net/articles/11167-10-questions-with-mike-lim-of-dp-design/


Author
Mike Lim
Mr Mike Lim is the director of DP Design and is responsible for the concept design and design development of a wide range of projects including commercial complexes, large condominiums, shops, restaurants and offices.