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Smart shopping: how brick-and-mortar retail is changing

Here are 3 places re-inventing the physical shopping experience.

Funan

  • Funan

    The new Funan boasts a 200 metre bicycle track and 166 bicycle bays.

All-in-one mall

Funan has completely reinvented itself into a town square for sports, lifestyle and social experiences. But it hasn’t forgotten its tech retail roots either. Besides inviting former IT tenants to return, the entire mall is set to be powered by an ecosystem of sensors, data analytics and facial recognition tools to understand consumer shopping habits and preferences. The carpark uses a video system that can scan licence plates so shoppers can find their cars. There’s also a 24-hour drive-through that lets you pick up your online orders should you be busy during the day.

There are nine storeys of millennial-centric co-living serviced residences by Ascott’s subsidiary lyf and a 70,000 sq ft co-working office space by WeWork. The high-tech hub has attracted several government bodies to lease office spaces including the Department of Statistics, the Attorney-General’s Chambers, the Smart Nation and Digital Government Office (SNDGO) and Ministry of Culture, Community and Youth.

(RELATED: Why are milennials flocking to co-living spaces in Singapore?)

How did Funan manage to reinvent itself as a magnet for such a wide variety of activities? While other mails struggle to attract and retain tenants, Funan had secured 98 percent pre-leasing commitment before it opened. Like many malls, Funan had been on the decline since the late 2000s when e-commerce sites made shopping cheaper and more convenient, particularly for electronic products. There were repeated attempts to upgrade and rebrand the mall, but the closure of several shops led owner CapitaLand to demolish the building in 2016 and overhaul its concept completely.

CapitaLand’s managing director of retail, Chris Chong, says: “It wasn’t an overnight decision. Discussions for a new concept mall may have started as far back as a decade ago. Although CapitaLand announced its plans to redevelop Funan only in 2016, we had already embarked on a long and robust process of engaging the community, speaking with different stakeholders, and seeking out opinion leaders in sports, F&B, fashion, the arts and other areas.”

(RELATED: CapitaLand Retail deputy managing director Chris Chong on personal style and strategies for saving retail)

New ideas for retail

Carolyn Kan, founder of homegrown jewelry brand Carrie K which has a space in Funan, says: “Their representative came to me as early as 2014, talked to me at length, and really listened to my ideas and aspirations… And when they finally unveiled their plans in 2016, I really felt like they’d taken a lot of our feedback on the retail landscape. Their plans were fresh and forward-thinking.”

Mr Chong says: “Ultimately we envision Funan as the place to express your passion. Whether you’re into sports or the arts, tech or fashion, there’s a space and a community for you here. It’s diverse, inclusive and welcomes all”, a contrast to the former Funan which specialized in tech and IT.

It’s no accident that diversity, passion, community-building and sustainability sound like buzzwords from the now generation. Funan’s management team is populated with millennials in the 20s and 30s who want to do things differently. For instance, contrary to old-school marketing ways, the marketing team posts just about anything that interests them on Funan’s official social media accounts – including pictures of toys, movies and artwork they happen to like, that aren’t related to Funan. As a result, Funan’s social media accounts are a hit even before the mall opens, with Instagram followers numbering over 18,300 and Facebook followers exceeding 280,000. By comparison, the 10-year-old ION Orchard has over 21,900 Instagram followers and 366,700 Facebook followers.

“It’s about having a fresh perspective, a sense of humour, a bit of daring, a bit of cheek,” says Mr Chong. “That’s how we envision Funan.”

(RELATED: How businesses can adapt to Singapore’s evolving retail scene, according to OUE senior vice-president Patrina Tan)

Al-Futtaim Group

  • Marks and Spencers

    Marks & Spencer will open a digital store for its F&B offerings.

Brick-and-mortar stores will never go away, as far as Simon Naga, vice-president (Asia) of Al-Futtaim Group, is concerned. The question is how to reinvigorate these spaces beyond their transactional roles to become playgrounds for fun, social experiences.

“Customers need to touch and feel the products. That aspect of shopping will remain,” he says. At the same time, there are ways to deepen a brand’s relationship with the customer while she is in the store.

Al-Futtaim is a Dubai-based conglomerate which owns a large stable of retail brands such as Robinsons department store, Marks & Spencer, Inditex fashion labels (such as Zara, Bershka, Massimo Dutti and Pull&Bear), and sports brands such as Royal Sporting House and Reebok.

Though online shopping continues on its growth trajectory, Mr Naga says that Al-Futtaim’s online business makes up only 4 to 5 percent of sales. Most customers still want to walk into the store and try on the product before making the purchase. “That’s why we stay focused on our best stores in every city, to make sure they give consumers the experiences they expect.”

Technology-driven experiences

Last year, Al-Futtaim’s Zara store in ION Orchard offered a unique Augmented Reality experience. Shoppers could scan a barcode using their smartphones and watch models sport the latest designs. Meanwhile, online shoppers who opted to have the goods sent to their homes would find a barcode on their gift boxes that they could scan, to see miniature models cat-walk on the boxes.

(RELATED: Unusual retail concepts around the world)

In London, Milan and Tokyo, Zara introduced fully-digital stores dedicated to Internet orders. Designs that could only be purchased online could either be delivered to customer’s homes or collected at a digital store within the same day or the next. The stores feature interactive mirrors equipped with RFID (radio frequency identification) that can detect the designs you’d like to try on and make other outfit suggestions in the mirror.

While all these experiments are deemed successful, Al-Futtaim continues to see the traditional in-store experience as its bread and butter. Mr Naga says 2019 has so far been “a challenging” year: “We had a good 2018 for some of our brands, but 2019 has been tough almost from the start… Still, we see this as an opportunity to continue investing in our staff and thinking up new ways to improve our customer experience.”

The company remains committed to its digital transformations: Coming up in Singapore is a digital store for Marks & Spencer’s food and beverage products. At the same time, it stays alert to hot-button issues such as sustainability versus fast fashion: Zara’s Join Life label, for instance, uses only sustainable raw materials for its garments.

“But it’s still the full experience of retail that shoppers are after – the enjoyment of being in the store,” says Mr Naga. “That’s why we’re spending a lot of money on designing and expanding our stores. We want the customer to feel and experience the products in the right way. Yes, online engagement is crucial. But we’ve been in business for 90 years, so we always take the long-term view. And we know physical retail is here to stay.”

(RELATED: Why malls and brick-and-mortar stores may beat online shopping)

INSPIFY

  • INSPIFY app

    INSPIFY app for the smartphone.

Picture this: You walk into your favourite luxury watch boutique and start admiring all the exquisite Swiss timepieces. After some consideration, you pick out three beautiful timepieces to try. You take a seat while the client advisor prepares them.

Where you are seated, there’s an iPad loaded with content on the various collections in the boutique. You click on the video that shows you the craftsmanship that goes into each timepiece. You click on the links to read expert reviews and see the social media posts. All the information you need is conveniently presented in one place: price, movement, size, strap options and a detailed description.

(RELATED: How these brick-and-mortar stores keep up with e-commerce)

In the age of ubiquitous information and data, there’s no reason why you shouldn’t have all these facts at your fingertips when you go shopping. Thorsten Walther, the CEO and founder of INSPIFY, spent three years with his team innovating and developing the technology tailored for the luxury sector that would allow customers to enjoy a seamless brick-and-click experience.

Since April, Swiss luxury watch brand IWC Schaffhausen has partnered with INSPIFY to integrate their technology in all of its high-end boutiques across the world. Other brands in the parent Richemont group have also signalled their interest to come onboard. Apart from Richemont, INSPIFY is currently working with Ermenegildo Zegna, MaxMara and Manolo Blahnik, while discussions to work with another “major client” are in progress.

Information at your fingertips

“As any retailer will tell you, consumers today are incredibly well-prepared. They walk into stores knowing a lot about the product. When unsure, they’ll just whip out their phones and search for the information right there and then.” says Mr Walther. “INSPIFY wants to simplify that, such that the consumer can walk in and the work has been done for them. Even if they have done their research beforehand, INSPIFY can package the information into an educational and entertaining version for the end user.”

So far, the closest alternative that exists in the retail space are QR codes. “But let’s face it, QR codes can look out-of-place in classy establishments. INSPIFY integrates our technology discreetly so it’s almost invisible to the customer.”

The experience doesn’t have to begin or end at the store. INSPIFY – a portmanteau of “inspiration” and “simplify” – has an accompanying app which curates a flipboard of luxury products that serves as an inspiration for your next purchase. Each product is linked to its description, availability, size, colours, and price. And if you wish to see it in the flesh, you can do so by making a reservation directly through the app. Upon arrival, the product in your preferred size and colour will be prepared for you, saving you precious time and potential disappointment.

“INSPIFY started because I was tired of going into a store, asking for a product and being told that they didn’t have one in my size, and that I had to go to another store to find it. In this day and age, why shouldn’t a consumer have access to inventory data and enjoy a hassle-free shopping experience?… It’s especially crucial for tourists who are here for a limited time, having travelled to Singapore specifically to shop for certain products.” says Mr Walther.

In future, INSPIFY wants to streamline the shopping experience down to three simple steps: Discover, Reserve, Collect. After “discovering” the item on the app, one can “reserve” it and “collect” it immediately from the store. There’s no longer a need to queue at the check-out counter or wait for the store assistant to process the payment – it’s done digitally as soon as the consumer says: “Yes, I’ll take it.

(RELATED: How retail brands are utilising technology to lure shoppers back to brick and mortar malls)

A version of this article was originally published in The Business Times.

Photos: Lim Yaohui/BT, CapitaLand, Al-Futtaim, INSPIFY and IWC