The changing landscape of retail demands multi-channel response

We cannot deny the unrivalled convenience of the Internet when it comes to shopping. 

The success of Alibaba, eBay and Zalora is solid proof of this. Online shopping is not confined only to online stores, but includes searching online for information before going to brick-and-mortar stores. 

Today’s fast-paced lifestyle has inevitably resulted in consumers spending less time shopping in physical stores. 

Going to malls can also become a chore because of heavy traffic. The Internet provides an ideal alternative where you can do your shopping at any time, anywhere.

There are consumers who do not shop online as they prefer to see the actual product before making a purchase. 

These consumers typically search for the websites of brands and department stores or shopping centres online, then visit the physical shop to see the current merchandise. 

This means any shop or brand with a mobile application or website showing its comprehensive product offerings and prices can improve sales at its physical outlets. 

The growth of online retail has urged brands to broaden their operating model by offering online and offline sales channels. It is now also crucial for landlords, retailers and department-store chains to develop websites, apps and their own online stores to reach, retain and even expand their clientele. 

Take top luxury brands such as Gucci and LV – their websites are probably the most dynamic among leading brand names and have helped push their sales to the top. 

Leading fashion retailers such as H&M and Zara also have easy-to-use apps and local websites detailing their latest collections and prices. Although they do not have online stores in all the countries they serve, their apps and websites very likely increase offline sales by creating a desire to purchase their products. 

International brands and shopping malls are leading the change, but we see limited activities by Thai retailers. They have their own websites, but these lack depth, information and merchandise range. Most of them have a store directory online, but details are limited. 

This is contrary to European or US shopping-mall operators such as Harrods, Selfridges, Neiman Marcus, Bloomingdale’s or Saks Fifth Avenue, which offer a full range of merchandise online. 

Almost all Thai food-and-beverage and other retail businesses have a Facebook page, but the page is good for sharing experiences, not selling. 

With the growth of online retail, tenant mixes in large global shopping malls have changed. Developers are now putting more emphasis on experience-based retail. The food-and-beverage sector remains upbeat with strong demand for more cafes, restaurants and casual dining spots. 

The entertainment element is becoming more prominent. Shopping centres are holding more events and exhibitions to increase foot traffic. This is in line with the changing city lifestyle where homes have become more compact and people now spend more time outside and prefer to dine out, so the need for entertainment and recreational public space is growing. 

The presence of brick-and-mortar stores is still a priority among top-brand retailers. But with the changing retail landscape, a multi-channel approach is certainly the way forward. 

 

Aliwassa Pathnadabutr is managing director of CBRE Thailand.