Experiential retail: Trendy buzzword or new norm?

Experiential retail: Trendy buzzword or new norm?

Shopping centres are offering cooking classes and virtual closets to reach out to shoppers and improve their experience. Is it working?

SINGAPORE: With the rise of e-commerce, changing customer behaviour and competition from heartland malls, shopping centres and retailers alike have been trying to create personalised and engaging experiences to draw shoppers.

From providing free Wi-Fi to offering Instagrammable moments for shoppers, more malls are jumping on the experiential retail bandwagon.

Downtown Gallery at Shenton Way is doing just that, with its 4,000 sq ft co-cooking space which opened on Monday (Sep 18).

There is communal dining area and 10 cooking stations which shoppers can rent for S$45 an hour. Shoppers can bring their own ingredients or buy pre-packed ingredients on the spot. There will be an option to buy them through an app in the future.

An in-house chef will also be at hand to guide shoppers who need cooking tips.

Cooking space 1
Downtown Gallery's co-cooking space includes 10 cooking stations and two "VIP rooms". (Photo: Wendy Wong) 

At The Shoppes at Marina Bay Sands, its experiential retail includes a virtual closet which showcases the latest fashion trends by luxury brands.

Using interactive digital mirrors, shoppers can have a 360-degree view of an outfit on a model and try on different styles - with just a touch.

"This helps me to browse one or two floors, and select an outfit or dress or shoe and then go find exactly where it is. So it saves me a lot of energy and time," said tourist Cheryl Paul.

Virtual closet 2
The virtual closet at The Shoppes at Marina Bay Sands, which showcases interactive displays showing the latest fashion trends and "curated looks". (Photo: Wendy Wong) 

Amid a competitive retail landscape, experts said it is no longer enough for malls to offer the same products.

"In today's environment we're seeing falling footfall in almost every single mall, because most of the malls are cookie-cutter malls and are replicated around the island," noted Cushman and Wakefield’s research director Christine Li.

It’s a view shared by Ms Esther Ho, deputy director of the school of business management at Nanyang Polytechnic: “What malls have done is to move away from products and essential services like laundromats and banks … to have more value-added services like tuition and libraries being built into the malls themselves.

“It’s a two-way dialogue with customers, and meant to be an interactive process where shoppers feel involved in the entire exchange.”


Funan mall, for instance, plans to integrate smart tech such as spaces for shoppers to test products when it opens in 2019. There are also plans to use video analytics to track footfall and traffic data, which would be shared with tenants.

It will also house an urban farm on its roof, and host talks and workshops.

In the case of Downtown Gallery, the mall wants to be "a place to commune" where shoppers can interact with like-minded people, rather than merely carrying out "transactional, regular shopping", said Patrina Tan, OUE senior vice president of retail, marketing and leasing.

The mixed-use development also houses a co-working space and a boutique fitness space, where gym instructors can rent to hold classes, ranging from yoga to boot camps.

"When we were looking at the Downtown Gallery project, we did a trend study ... and in one of the trends that we focused (on) was the fact that the new generation, your millennials, are all looking at more real-life experiences," said Ms Tan.

"So knowing this behavior, the evolution of consumerism, we felt that providing a (kitchen) space like this - and we call it Social Kitchen because it’s all about connecting and making friends and creating community - will provide them with a platform for them to come together and start to make friends, engage and connect with like-minded people,” she added.

Cooking space 2
Downtown Gallery's co-cooking space will have an in-house chef at hand to guide shoppers if they need cooking tips. (Photo: Wendy Wong) 


But is experiential retail really worth the hype and are shoppers willing to pay a premium for such experiences? Preliminary studies seem to suggest so.

According to a 2015 report by consumer financial services company Synchrony Financial, more than half of shoppers surveyed said they would shop at a retailer more often because of a positive experience – and pay a higher price for customer experiences they value most.

"It has been shown that experiential retailing can help businesses improve their bottom line," said Hannah Chang, associate professor of marketing at Singapore Management University. "Previously, retailers believed that if you offered a very compelling price, you can attract the customers to buy from you instead of from your competitors."

But this is no longer true in today's competitive retail landscape. Now, the more important driver is to offer good customer experience, said Ms Chang.

"Studies have shown that when retailers have one poor customer service or offer below expectation customer experience, this customer is very likely to leave."

For malls along Orchard Road, creating immersive and social experiences is one way of drawing people back to the iconic shopping belt.

ION Orchard, for instance, has been experimenting with tying entertainment and technology to its retail offerings, such as pop-culture events and an art gallery.

In September, the mall organised a 10-day Star Wars festival to coincide with the school holidays. It also has plans to revamp its 56th-floor observatory, ION Sky, to offer a multimedia walkthrough of the history and transformation of Orchard Road.

Heartland malls are also tapping the trend, such as Century Square in Tampines which closed last month for refurbishment works.

More than half of the 218 shops in the upgraded mall will be taken up by new tenants when it reopens in the second half of next year. These include a 24-hour gym, an incubator space for local designers to showcase their products, and lifestyle grocer Mahota Market where shoppers can buy their groceries and have the option of them cooked on the spot.

“To keep up with the rapidly changing retail industry, we are aware that to stay relevant, one needs to evolve and adapt with the times,” said AsiaMalls managing director Tan Kee Yong.

“Hence, we decided to renovate the mall and transform it into a retail space that places customers at its heart, with curated shopping experiences that will help shoppers create a sense of belonging.”

"It gives companies a sustained competitive advantage," said Ms Chang. "Because the retail landscape is becoming increasingly competitive, it will no longer help you win the retail battleground. But without it, you will just have a hard time surviving."

Source: CNA/ad