Article by Jun Ting, CEO and Co-Founder Aimazing, on LinkedIn. View original article here.
I am writing this article as a response to a report by EDMUND TIE & Co., as seen on The Business Times, with regards to the changing retail landscape in Singapore. The key argument is that physical retailing is not dead, so long as retailers are coming up with innovative ways to create a memorable experience for consumers.
With my headline, one might assume that we believe that physical malls and retail in general will die, but that is the opposite of our position. We do however believe that malls will die a slow (or fast) death, if the following foundations of transparent, real-time, data, and synergy between stakeholders, are not made a reality today. For this to happen we need 3 factors to be true:
An operating model of win-win relationships between all stakeholders, including landlords, merchants, with consumers in the centre
A fundamental shift from silos and distrust, to trust and cooperation
A data infrastructure (hardware and software) that enforces trust and provides superior business insights and step changes in productivity
Image from: Pexels
Some elaborations:
The retail mall of tomorrow will not succeed unless they have full real-time data visibility and sharing, just like e-commerce marketplaces.
Shop in any online marketplace today, from multiple stores. This marketplace has real-time and itemised information of every single purchase that you made. Step into any mall today to buy your latte and bagel, your pair of shoes and your dress - the mall doesn’t have this information.
A key edge that e-commerce marketplaces have over physical malls is the visibility of granular sales data in real time. Ecommerce marketplaces can tell you how many people shopped at midnight and how many transactions were made, and what that average basket size was per transaction. Malls cannot.
Systems, contracts and approaches in offline retail today is outdated, and thus the physical retail ecosystem cannot keep pace with the exponential growth of e-commerce. True omnichannel retail with malls requires having full data visibility, and no one has achieved this before because of POS fragmentation, difficulty of Integration, and a non-data centric approach.
Take a look at any POS system in any shop, in any mall in Singapore. Right this minute, POS machines all over the island are clocking in thousands of transactions concurrently.
The problem?
Malls today are not equipped with the systems to view, analyse and use this data to grow with merchants, and delight customers. Again, ecommerce marketplaces are able to, and they routinely tell the market, and each of their merchants, how many people shopped at what time, how the merchant did on the day compared to their competitors and the whole market. Malls on the other hand - are unable to provide this information in real time.
Inability to respond to crisis
Surely during a lockdown, for example of 14 days, a mall must be able to understand how sales fare day to day, before, during and after the lockdown? Again, this is information that the vast majority of malls do not have, and therefore, no merchants receive as insights. It makes it difficult to negotiate subsidies and waivers in tripartite discussions, turning to pictures of empty malls and ‘he-said-she-said’ back and forths.
With our extensive discussions in the industry, it is commonly known that landlords and merchants as a rule of thumb, distrust each other. They doubt the data that each present, they doubt each others’ intentions and actions, and each party claims that the other does not share data transparently. You only have to look at any social media post within merchants groups, business publications, and the conversations and comments that unfold to understand the intensity of these feelings.
Is this the only way to operate? With distrust and keeping our cards to our chest?
Workable Models For Data Transparency & Synergy
Why is it that merchants are more than happy to share all sales data with e-commerce marketplaces? Why is it that retailers routinely for loyalty and retargeting purposes sync their customer database with tech giants like Facebook and Google?
These business relationships are underpinned by the 3 principles I’ve shared above. An operating model of win-win, trusting relationships, and an automated, scalable data infrastructure.
E-commerce is new, shiny, and revolutionary. Physical marketplaces, on the other hand, has been around for centuries. With this, it is crucial for malls to disrupt themselves and meet evolving consumer demands and behaviours. We already know that tech giants like Amazon, JD and AliBaba are moving towards owning their own retail stores, and sometimes complexes. Perhaps it is time for big tech to disrupt and best landlords at their own game?
Transformation involves not just upgrading physical systems, but also changing hearts and minds of the people within these organisations, and maintaining open mindsets surrounding legacy SOPs and beliefs, such as data sharing between stakeholders. Building alignment, consensus and trust is close to our hearts, which is why we created The Future of Retail Asia Podcast interviewing retail ecosystem leaders from all around Asia.
Unlocking Value, Revenue & Investments Into The Retail Ecosystem
As more retailers are opting for the omni-channel approach, the question arises of how this value-adds to the consumer, and drives higher sales and revenue. Ultimately, it all boils down to creating a seamless online to offline shopping experience for the customer, and that can only be enabled with data - data that lay latent and trapped in the fragmented Point-Of-Sale systems market in Singapore’s retail scene. For retailers and brands, showing data is the ‘proof of the pudding’ - driving more sales effectively and harnessing data to do that predictably and efficiently, is what will save the retail ecosystem, not arguing about rents.
Interestingly, it will also be the reason that the largest brands in the world, FMCG brands like PepsiCo and CocaCola, P&G and Unilever, would invest more money. Do you think they would be interested to know how their SKUs move every hour, day and week in the mall or retail ecosystem? Understanding demand flow so they can plan marketing, manufacturing and distribution better saves brands billions of dollars a year if achieved - this unlocks tremendous value.
FinTech partners like banks, card issuers and e-wallets would love to understand customers, purchases and how they perform in the market, and predictable and measurable ways to acquire and have users spend more with them.
Show your partners the data of how spends can be increased, and you will see money flow in like a gushing river - all because you can show these partners how they can increase ROI and decrease costs - while all other competing malls struggle to calculate rental on a monthly basis.
Image from: Pexels
The Great Singapore Sale (GSS) has died, and the only honourable way is to recreate a new, data-centred and customer-centred version of it.
When was the last time you saw a GSS print ad, and specifically went to town to catch the sales?
The popularity of the GSS has dwindled sharply in recent years, and this has been prominently replaced by catchy (and mostly irritating) online ads and jingles shouting every double number you can imagine (11, 22, 33, 44, 55, 66, 77, 88, 99, and the rest I can’t remember :) )but that doesn’t have to signify its death.
Could the Great Singapore Sale be reincarnated and brought back to life with real-time data, omnichannel marketing and engagement? We believe, and we know so.
Want to give people real-time sales figures in the malls? Top selling brands and shops for the day?
You need aggregate real-time data.
Want to challenge your shoppers to shop all day and if the mall hits $10M spend for the day everyone in the mall receives a $10 voucher?
You need aggregate real-time data.
Want to run mall-wide 2-hour flash sales and see the results?
You need aggregate real-time data.
Want to work with payment partners and show how their transaction share in your mall increases from 10% to 25% before-after your campaign?
You need aggregate real-time data.
I think you catch my drift. Any omnichannel future, customer-centric future, experience innovated future - requires aggregate real-time data. Can you see the future? We do, and it’s beautiful.
The best part is that the technology, the processes, and the steps already exist to make it happen.
The Fair Tenancy Framework, while a good start, will not work by itself, as rental calculation isn't exciting for retailers and even malls. Growing topline is.
If there is one thing that retailers care about, it is sales. Growing whole retail ecosystems, whether it is a mall, or a precinct, requires every party working together in the ecosystem, for the good of the ecosystem. This interestingly applies to malls, but to also precincts (for example 600 merchants in Kampong Glam, or in Chinatown).
And you MUST. HAVE. FULL. REAL-TIME. DATA.
If data can unlock how to double or triple spend in a mall - that's what will work, and you only need to look at e-commerce use cases to see how to bring it into the mall.
The future of offline retail is an exciting and promising one for landlords, tenants, and shoppers alike, if and only if these happen;
An operating model of win-win relationships between all stakeholders, including landlords, merchants, with consumers in the centre
A fundamental shift from silos and distrust, to trust and cooperation
A data infrastructure (hardware and software) that enforces trust and provides superior business insights and step changes in productivity
At Aimazing, we’re not here to talk about ideals, but to show that these systems and solutions can work.
Here is our challenge - any mall, any precinct, in any city in the world.
Share with us your challenges in growing and we will show you exactly how to map up all the data, work together as a collective, and identify the growth map for the future - from discussion to real data and solutions on the ground, in 3 months or less.
See more of what we think in our White Paper.
Jun Ting,
CEO & Co-Founder, Aimazing
The World’s Preferred Mall & Retail Ecosystem Data Platform