Malls need to strategise amid glut in retail space
Among the strategies include having own specific identity, effective mall management strategy, strategic combination of tenants mix and capitalisation on e-commerce
by NUR HANANI AZMAN / pic by MUHD AMIN NAHARUL
LOCAL retailers should strategically plan their presence in the respective target markets and locations in order to capitalise on the right market and consumer groups.
KUB Malaysia Bhd chairman Datuk Seri Johari Abdul Ghani (picture) said there is a glut in retail space resulting in brand owners making demands on shopping malls and duplicate stores becoming available across various malls, thus cannibalising consumers.
“The same number of consumers who frequent these stores are now split in numbers as the same stores are available across various malls.
“Hence, retailers are then no longer able to obtain large numbers of consumers. In retail, you need numbers, and without numbers, you do not have throughput,” he said in an interview with Malaysia Retailer, the official magazine of the Malaysia Retail Chain Association (MRCA).
Johari also advised malls to have their own specific identity, effective mall management strategy and a strategic combination of tenants mix that can cater to the needs of the predominant consumer groups in a particular area or locality.
At the same time, he also called on retailers to capitalise on e-commerce and bridge the gap between purchasing online and in retail outlets.
“Retail shops and e-commerce have to complement each other and co-exist,” he explained.
Johari maintained that despite the wonders of e-commerce, physical retail outlets will always be there.
The only difference, he said, compared to 10 and 20 years ago, retail outlets were the only option for customers, but today consumers can enjoy the convenience of online stores.
“One of the main advantages of e-commerce is convenience. It has the ability to disrupt the normal retail ecosystem, however, for good e-commerce, you need a strong and efficient ecosystem which includes logistics partners, infrastructure and warehousing, among others.
“This calls for digital technology advancement,” Johari said.
He noted that retail shops have limitations in customer reach unlike e-commerce but the million-dollar question is “which platform” can scale-up to cater to millions of customers.
On digitalisation and IR4.0 in Malaysia, Johari explained that the country is on the right track, although at a slower pace.
The government, he said, has to actively drive digitalisation and IR4.0.
“This requires good and efficient infrastructure and the Internet of Things spanning, artificial intelligence, cloud computing, robotics and augmented reality.
“All this can only work with well-distributed infrastructure both in the urban, suburban and rural areas,” he added.
Johari said despite small and medium enterprises (SMEs) driving the Malaysian economy, these industries are still labour-intensive.
“Without foreign workers, many SMEs are handicapped because they rely heavily on foreign workers. As long as we continue to rely on foreign workers, Malaysia’s progress into IR4.0 will be at a slower pace,” he said.
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