I sat down with Ricardo Ferrer and Paul Burke from Asian Horizon, two seasoned professionals in the Retail and Shopping Mall industry before the Golden Week to pick their brains on trends and how they think shopping mall and retail will have to evolve with the changing climate in China 's digital revolution.
They both had different starts in their career, in 2015 Ricardo established his e-commerce platform for luxury brands with the approved products along with an offline store, this allowed him to tailor their experience for O2O.
Paul, however, started in the brick and mortar industry of retail. He was astounded by the changes especially in China’s online business over the last 5 or 6 years was phenomenal as it makes a huge difference in the market and makes the experience better for the consumer because it is all about understanding who the consumer is. He referred to Lane Crawford who introduced “Click & Collects” in Shanghai 3 or 4 years ago which increased their customer satisfaction because they got what they wanted, when they wanted. It also made LC accessible to consumers in different cities that could not visit their stores.
Paul “The retailers that are embracing technology, innovation and digitalisation will be the winners in the future, and the losers are the ones that don’t understand or will be left struggling.”
It was having the best of both worlds in one room as both men experience the Industry from distinctive points of view but still find the right mix to flourish together in this fast pace industry.
Same Same but Different
When asked about the comparison of the West and China innovation was the keyword
Ricardo “China is moving faster forward in change than their western neighbours.” He pointed out big players of the industry like T-mall and WeChat that have bridge the gap between O2O purchased for customers. “There is a critical area where China which needs to address, the human aspect, more specific staff training or lack there as well as retention. As for the west, they are being eaten by the online market and have not reacted as fast as China did because they don’t have online users pushing the industry for this change.”
Paul seconded the statement made by Ricardo, “The innovation that China has gone through for the last 2 or 3 years matches the millennial customers, the young customers in China are much different from the young customers in the West. They jumped the computer and went directly to cell phones which had a defining impact, whereas the West is catching up through PC, laptops and the development of the mobile phone business, China is already leaps ahead with apps, WeChat, Alipay etc. These innovations have made it easier for a person to purchase. Shopping starts with your mobile phone, but in the Uk & US, it starts with your laptop. Shopping through a mobile device provide options to the consumer on the go, this mobile phone phenomenon is what is driving the change in the China.”
I raised the question of West not requiring or have caught up with China, Paul “you have to ask yourself what is after the mobile phone it may be the West jumps over the mobile payment, there might be something else in 5 - 10 years that we don’t know. Now the mobile phone is a little bit old it has been around for some years, so what is next?
The thing about the West is that the brick and mortar properties are antiquated and require a lot of investment, lifts, warehousing, escalators. Whereas in China the shopping malls are relatively new so they are flexible to introduce technology initiatives into it. However, in the UK, for example, the retail property is quite old, so the entire infrastructure of the business needs upgrading because it doesn’t make sense having significant innovation in the store but the lift doesn’t work, changing rooms are dirty etc. However, China, we are talking about department stores and brands that are thinking about the next 5 to 10 years, they have already had it in their minds regarding people, investment and what they are trying to accomplish for the future.”
Ricardo “In the west, people use their phones are for a different reason: maps, browsers and communication. In China using WeChat for example, you are paying for goods, booking services for travel, connecting with your friends, etc. all in the same App. What we spoke before is only possible because a platform exists and that type of platform doesn’t exist in the west.”
Malls with a Future
As we spoke, it was apparent that malls/retail will have to evolve. Ricardo: “Small shops and Malls will focus much more on personal experience, and recognise you when you come into the shop.”
Paul “I Agree, I think shopping malls will be smaller and more of a multipurpose space, there will be doctors, dentists, hospitals everything you need so customers can go to that one place.” He pointed an excellent example in the Portman which housed the food, housing and medical services in one area. Although it is not a mall, it is a community area.
“People like this type of area because you can go there spend all day and get all the things you need to do done. If I could go to one place on my day off and there was something for my wife, son and myself that is the place I would go to spend my day.”
I asked if this would form a centralised shopping mall, but their vision is more of a shopping neighbourhood.”
Ricardo “The mall should be a place that listens to what consumers want and information, communication has to be more targeted.”
Paul “That is why Pop-ups shops are becoming more popular, they rebrand themselves and change their products every month this makes visiting the mall more exciting and can attract consumers to come back as they want to see what new things are happening.”
How will this vision come to be?
Ricardo “The driver of the mall is technology, not a physical space, in the right way of mixing Technology and marketing, this is what will make it successful.”
Paul “The landlords, need to know that they are no longer just landlords, there needs to be a change in the way how they understand what the consumers now want and what they expect regarding service and experience from the mall.
The technology being introduced by shops of the future need to be supported by the Mall owners, they are the ones that must buy into it, sell it, and push it. They have to realise that technology is a critical element the mall, by working together with the brand and fight together, but for now, brands and Malls don’t tend to share information or work together.”
Need to know
Ricardo summed it up in three words “Focusing on the Human Factor: What the consumer wants.”
Paul “Service varies between malls and brands, there has to be a consistency in service, and that is what a consumer wants, they want to go in malls and feel loved, cherished, understood.
Service cannot vary from place to place because that overall experience will be ruined. The customer is KING, and while many retailers understand this they don’t practice it. I know “customer is king” can be a bit blasé but what it means is to understand your customer. Who they are, what they want because there is a vast difference between a 16, 20 35 and 50-year-old, they all want something different, they all want respect, service, personalised service. They must understand each consumer needs something different therefore customised service
Take as an example Alibaba's use of big data, which can help with really understanding the consumer. By taking all the data, available retailers can personalise the experience for a consumer.”
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