The New Retail World

It’s a new retail world out there. When was the last time you went to a mall? Not just popping through to catch a movie, pick up some sushi or grab something from Coles, but to actually shop? That’s right. You have to have an actual think about it, don’t you? The days when people would congregate in a mall to hang out are starting to fade. With the advent of online shopping, brick-and-mortar retail is at risk: and can even seem incongruous. In its latest update, David Jones sales were down 4 percent, a “death spiral” echoed in Myers, and even overseas in US juggernauts such as Macy’s. Is it the end? Are sprawling malls soon to be a dinosaur of the past?

There have been nine retail bankruptcies in 2017—as many as all of 2016. J.C. Penney, RadioShack, Macy’s, and Sears have each announced more than 100 store closures. Sports Authority has liquidated, and Payless has filed for bankruptcy. Last week, several apparel companies’ stocks hit new multi-year lows, including Lululemon, Urban Outfitters, and American Eagle, and Ralph Lauren announced that it is closing its flagship Polo store on Fifth Avenue, one of several brands to abandon that iconic thoroughfare. –The Atlantic

We’re Not Exactly Swimming In Money Here, Genius

2017 Christmas spending in Australia slumped:

Australia’s December retail sales report has come in well under expectations, partially reversing a strong lift in November.

According to the Australian Bureau of Statistics (ABS), sales fell by 0.5% to $ 26.261 billion in seasonally adjusted terms, missing forecasts for a smaller decline of 0.2%.

According to APAC Economist Callam Pickering, with low wage growth and high debt in Australia, this doesn’t come as much surprise. Similarly, it might just be cheaper to buy things online, or overseas. Books, for example. A book in a brick and mortar store is quite likely to cost twice as much as the same book off an aggregator site like, or an ebook. The launch of Amazon Australia, while rife with hiccups and so far not quite the disruptor that it promised to be, also tends to charge less for the same thing.

Improved employment conditions in 2017 might lead to a retail boost in 2018, but we’ll have to wait and see.

Modern Retail Ecosystems

The world has changed rapidly since the dawn of the digital age, and often malls have struggled to keep up. Outside of offering integrated digital features like new payment systems, click and collect, free wifi and such, malls haven’t exactly moved the needle far beyond that. Malls have been closing down as brick and mortar stores struggle. Why would you go to a mall, when instant gratification purchases can be made out of your phone? Food? There’s an app for that too. Movies? Film tickets are increasingly expensive, and there’s always Netflix. Clothes? If you’re not into fast fashion or high priced fashion, chances are you’re already buying your stuff online, in thrift shops, or at select shops. In a time-poor world, why cut out half of your day to drive out and worship consumerism?

Kmart’s Director, Ian Bailey, had some insights:

“We are failing to deliver on what customers really want. They want more information from us, they want a super shopping experience, they want better products, and they want lower prices – pretty much they want the lot. […] Newness is very important, Australians respond extraordinarily well to new things.”

For younger generations, there’s been a shift away from materialism to experiences. That beautiful brunchy avocado toast shot might be “worth” more to a millennial than a new shirt. As consumer value systems shift, modern retail environments will need to shift with it. That’s partly what Mr. Bailey might have meant by “new things”. Some malls have been trying to adjust in this direction. Melbourne Central, for example, regularly hosts lifestyle events like Donut Fairs that attract visitors. Chadstone has inbuilt attractions like Lego Land, which even has “adult” nights for people without kids (No, it’s not what you’re thinking). Such features give customers a reason to make the time to go to the venue, one that’s above and beyond providing products that they can access on their couch.

In Asia, malls have tried to readjust by offering great F&B options. Food courts in malls from Singapore to Bangkok are great. Nothing like the oily, sad, highly franchised options available in most Aussie malls. (Other than Emporium in Melbourne, but that mall is Asian-owned, and looks suspiciously like a tiny version of Singapore’s Ion.) David Jones food court? Expensive, overpriced. If you’ve ever been to a basement in a Tokyo mall, you won’t forget it. A mecca of quick food, cheap food, food gifts and more, that’s one thing that you’d be willing to go to a mall for. Malls in Asia often also host higher end restaurants and cafes, reorienting their shopping offers around such embedded draws. It’s something that Australian retail spaces can catch up on.

“[M]alls in the United States are struggling more than those in Asia. Unlike their Asian counterparts, which often offer more options like dining and education resources, American malls have traditionally been designed simply to bring stores together, without further consideration of amenities and conveniences like transport links. “It’s just not interesting anymore.” –David Fassbender, executive director of portfolio management in Asia for PGIM Real Estate

Omnichannel is another way to go. By providing shoppers with a seamless transition from online to physical, certain malls in Asia, such as Seoul’s Shinsegae, have been offering shoppers personalised suggestions through their apps. Intrusive? Maybe, in this increasingly privacy-conscious world, but if handled well, personalised integrated shopping can help boost conversion and customer loyalty.

Accessible to Everyone

This might be an obvious one, though it isn’t as obviously implemented. Want more foot traffic? Make sure your retail space is highly accessible. Not just for families, but also for people with disabilities. Are there facilities that make it easy for them to visit and use the retail space? Public space design often lets down entire swathes of people. Try to make sure your space isn’t one that does.

An Urban Village

With people increasingly thinking of themselves less as consumers, developers have been creating more mixed-used spaces in retail spaces. Still, experiential design needs a lot of thought, research, and branding. As does the implementation of Omnichannel offerings and other cutting-edge retail strategies. Retail isn’t dead, it’s just in the process of trying to keep up with the brave new world. Want to know more? Give us a buzz.

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