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The refurbishment of retail
By Vivek Kaul | September 6, 2019
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SINGAPORE (EDGEPROP) - Experiences pervade retail. Especially here in the Asia-Pacific. What does this mean though? Simply put, as consumers become more sophisticated, so too do the retail offerings they seek. Landlords and retailers, in turn, have to upgrade their malls and physical stores into experiential hubs where sensory stimulation and memories are born.

The proliferation of online retailing has allowed consumers to access countless products at the mere click of a button, so the need for retailers to deploy new strategies comes as no coincidence. The function of a retail store, then, now extends beyond providing an outlet through which purchases can be made, to quenching shoppers’ thirst for entertainment and pleasure. This fusing of shopping with entertainment is known as retailtainment.

Retailtainment, not dissimilar to other marketing initiatives, sits on a spectrum. An instore yoga class for an athleisure line serves as one example on the low end of the spectrum, while an indoor theme park is a more drastic marketing effort on the high end.

The function of a retail store now extends beyond providing an outlet through which purchases can be made, to quenching shoppers’ thirst for entertainment and pleasure (Pictures: CBRE)

The interactive experiences offered by retailtainment allow brands to occupy mental real estate in the minds of potential and existing customers in a way that online shopping cannot achieve. Retailtainment efforts, then, provide a necessary counterpoint to e-commerce’s disruptive influence. There is no war between technology and retail, though – one needn’t upend another. Through leveraging data-driven insights on competitor performance and consumers’ behaviour and preferences, retailers can tailor optimal marketing strategies to increase footfall and revenue. For example, identifying which areas a shopping mall’s patron frequents after office hours can help a landlord in determining which tenants should be part of the F&B mix.

The rise of retailtainment in the region (over 200 retailers have incorporated activity-based leisure in Tier 1 Chinese cities since 2018) points to an evolvement in consumers’ pursuit of pleasure. This is not to say that in the past, shoppers did not enjoy leisurely experiences – but they are now more willing than ever to spend money on entertainment. Euromonitor data projects an additional spending of US$825 billion ($1.15 trillion) by 2030 on experience-based retailing. This trend is particularly pronounced in this region. In Hong Kong’s Pacific Place, AMC Cinemas houses a VIP section called “The Oval Office” offering leather reclining seats, food delivery at the push of a button, and free-flow beverages.



Activating a space to incite a positive emotional response is how retailtainment generates value. Take the 32,000-sq-ft Starbucks Reserve Roastery in Tokyo, for example, which offers augmented reality elements and a craft-oriented experience. This capitalises on shoppers’ increasing inclination to spend on personalised, premium  experiences, while also expanding Starbucks’ imprint in the minds of store patrons and anyone who has scrolled through Instagram recently. Two birds, one stone.

A virtual reality station taps into the same desires as a gaming arcade. Technology will be an enabler in the growth of retailtainment in terms of widening the scope of activities.

New retail formats have arisen as a result of retailtainment. This applies to both the tenant mix in a mall and the mall itself. One of the largest occupiers in square footage are indoor theme parks/entertainment centres – think Legoland Discovery centres across Japan, China and Australia, which replicate Legoland theme parks. Aside from weaving new, entertainment-based retailers into the tenant mix, shopping mall operators are looking into placemaking methods to breathe life into physical spaces – giving visitors a reason to return. This can range from something as simple as a fountain, to a more interactive immersion like an outdoor cinema. All are investments in experience. All entice us to a retail space for reasons other than purchasing.

From our current vantage point, the scope to which retailtainment can grow is broad. Technology will be an enabler in terms of producing behavioural insights through data as well as widening the scope of activities. For instance, Seoul’s Gangnam district has a 4,000-sqft virtual reality station which allows players to interact through racing, biking and surfing games. This is a testament to the reactivity of retail to consumer trends. A virtual reality station taps into the same desires as a gaming arcade. But the increase in shoppers’ disposable incomes, together with new technologies in retailers’ arsenal, has allowed retail spheres to push new frontiers.

In this new retail landscape, individual retailers and shopping-mall landlords need to be more consumer-centric than ever. The force of their marketing efforts will be more heavily charged towards shoppers’ experience rather than single products. While this may require a heavier capital outlay, big data will help to determine what works and what doesn’t. The connection shoppers have with retail spaces will deepen, as both grow in sophistication.

Vivek Kaul is head of retail, Asia, at CBRE.

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