E-commerce has made a significant impact in various industries including retail. With the growing appetite for convenient online shopping, a number of brick-and-mortar stores have been disrupted — with some even being forced out of business.
To illustrate, PricewaterhouseCoopers (PwC) said in a recent report titled “The new retail ecosystem: From disrupted to disruptor,” that the retail store of the past may well be dead, as evidenced by the ongoing trend of thousands of store closures over the last decades; and that more announcements of closures are expected as the pace of digital change continues to accelerate. Moreover, according to their Total Retail survey, PwC cites the prevalence of online shopping with 90% of US respondents saying that they are Amazon shoppers.
While traditional brick-and-mortar establishments in other countries are being challenged by the digital revolution, the local retail scene seems to continue to thrive. Robinsons Malls, for example, have performed creditable–with tenants’ sales consistently growing every year, as what Arlene Magtibay, General Manager-Commercial Centers Division of Robinsons Land Corporation told BusinessWorld.
However, admittedly, digital innovations have significantly impacted the industry. Ms. Magtibay noted, “E-commerce has changed the dynamics of the shopping center industry. Whereas before, people would have to go to a physical facility to shop, today, they can browse hundreds of items with their gadgets and get to make their purchases in the comforts of their home or wherever they may be. E-commerce provides that flexibility and convenience.”
“Just as significant to note is the fact that anyone can now be a retailer without having to put up a physical store. The traditional shopping center has literally thousands of competitors–from the giant e-commerce companies like Amazon to a student who sells clothes online.”
Apart from providing a pleasant environment, what seems to be the edge of malls—and where they are banking on—are relevant services and unique experiences that are not available online. In relation to this, Ms. Magtibay said that they have noticed a slowdown in the expansion of apparel stores in malls and conversely, there has been an increase in number of restaurants and food shops.
“Unlike clothes which can be bought online, the experience of dining out with family and friends is not something that can be done virtually. Thus, you will see that in almost all shopping centers today, a big percentage of space is now allocated to restaurants and food outlets which, aside from the supermarket, are now the biggest driver of repeat visits to a shopping center.”
These changes were reflective of the aforementioned PwC report, which noted that retailers are already adapting to a new retail ecosystem. It said, “In this retail ecosystem of the future — a combination of physical, digital, and complementary service offerings — stores tailored by location and demographics become part of the consumer’s broader shopping experience.”
“The physical store is a key component of the new retail ecosystem. It has to provide a reason for the consumer to leave the comfort of home to shop — an experience within its four walls that not only competes with the convenience and ease of online shopping but also offers other options consumers might choose to spend their time on, such as movies, sporting events, or dining out,” the report continued, and added that retailers have to step up and provide experiences that engage shoppers and entice them to linger.”
To retain engagement and keep their patronage, Ms. Magtibay shared that Robinsons Malls have evolved their tenant mix by increasing the percentage of restaurants and by bringing in first-in-the-market concepts. Moreover, the general manager added that they also have more entertainment options through expanding amusement attractions apart from cinemas.
Adding value and relevance to their malls, Ms. Magtibay also mentioned that they pioneered in bringing government agencies into their malls (such as DFA, NBI, SSS, etc.) under Lingkod Pinoy Centers.
Instead of faltering from being disrupted by the digital revolution, most malls including Robinsons are also utilizing digital technology to enhance customer experience.
“We have embraced digital technology to provide convenience to both our shoppers and merchants. Our Robinsons Movieworld has the most number of online platforms for buying tickets. We have digital directories, a Robinsons app, a self-ticketing kiosk for Movieworld, and we constantly engage our shoppers through marketing campaigns on social media,” Ms. Magtibay said.
“Recently, we launched Playlab in Robinsons Galleria Cebu. It is the first digital playground in the country with 14 highly interactive, educational, and fun attractions. It has been very warmly received as it integrates kids’ love for the digital with active play. In a few weeks’ time, we will also be launching Aqua Fun at Robinsons Place Pavia. This is the first water playground in the country and will feature 12 attractions that children will surely enjoy.” — Romsanne R. Ortiguero