What cost less than paying rental at a IT centre in the heart of the city where rates can be used for down payment for a four wheel sedan, well…open an online retail store on Lazada of course! The trend is picking up as online shopping in the country continue to see double digit growth, and with these centres charging exorbitant fees for floor space, more IT vendors are moving online to sell their wares leaving retail lots vacant and at the same time a significant drop in footfall is also reported at these malls.
Slow to react and stuck in their own ways as one retailer highlighted when asked by PC.com about the operators of the mall, the management of these IT centres continue to raise rental despite complaints from shop keepers about slowdowns who are double whammied with higher rental and reduced business. Once a vibrant destination, customers fought through traffic and paid expensive parking to purchase anything small from thumb drives to larger items like monitors or desktops. But walking through the floors at Low Yat today the evidence is clear as one will see less movement of people and outlets omitted of customers.
It was reported that we have over 148 million sq feet of retail mall space in the country with 64 million sq feet just in Kuala Lumpur alone. And there are still more malls being built and a few about to open their doors anytime soon. However, none are dedicated to just IT with developers sensing the outlook for single purpose mall are no longer viable. Even popular multi concept shopping malls are starting feel the heat from eCommerce platforms as they start occupying mind-share of consumers, but the developers try to offer lifestyle concepts with residential packages in their malls promising a steady stream of customers to the shops.
But buying a thumb drive or router online, outweighs any reason to drive to Bukit Bintang. Apart from convenience, by cutting the middle-man and rental overhead price of items are cheaper on the net. The reason we still don’t see huge price disparity for large ticket products is because manufacturers or distributors continue to practice protectionism, this is in order not to antagonise their main source of sales which is still generated by the brick and mortar retailers. But we suspect this will change when eRetailers out sell them by leaps, that’s when the table will turn. (alibaba has already done this)
The advantage lies on shopping online, in the past skepticism on quality of goods and fear of credit card fraud was a deterrent, today the platforms are more trustworthy, offering money back guarantee and have sizable catalogue equivalent to offline. For those in need of tech products the avenue on the internet is wide and broad, from the likes of well established complete eCommerce sites, many vendors are setting up payment platforms on their own website for ease of users. Writings are on the proverbial wall and is only a matter of time before we see the demise of dedicated IT product malls with developers keen to make better use of the buildings.
But There is Hope
If you had been to Funan Digital mall in Singapore that closed its doors last year, the place was like Imbi plaza of yesteryear ran by grumpy oldmen and unfriendly shop attendants. Gone are the days the shop-owners knows best, with the internet young consumers do all their activity on the net and prefer the fuss-free non human interaction when purchasing their IT gadgets. But should the city be devoid of places where maybe one day, one can go and browse floor by floor of all the latest technology gadgets, watch drones fly in the concourse and walk into experience zones with virtual reality zones? While they don’t exist at the moment, this is what they should aspire to be, customers can touch and feel the products before they make their purchase either online or at store. If they choose online give them a coupon for special discount or reward points, online to offline and vice versa is a trend retailers have to embrace.
Stop the way you operate your hard-sell business now and establish an online store, give your customers the pleasure of buying from the digital channel and offer an unforgettable experience if they step into your outlet. To the management of the malls, you will have to support your retailers with an online presence and move away from being just a gadget pick up store to a more fun filled exciting destination for everyone. Disruption is inevitable and there shouldn’t be losers.