With the advent of e-commerce and online shops selling anything you could ever think about buying, some fear for the safety of the shopping malls that have made Singapore the shopping haven that it is famous for.
There have been a number of cities where e-commerce has overtaken the physical means of shopping. However, in-depth research into the shopping behaviors and statistics of Singaporean shoppers prove that the physical shopping stores’ performance has improved and that they are here to stay with e-commerce actually augmenting sales.
There are 4 main reasons why experts think that shopping malls will still be standing strong in Singapore.
Online and Offline Retail Worlds are not Really Competitors
Singapore is no different from all other countries in the world. With the advent of the digital age, its e-commerce sector is booming. Boasting staggering growth of nearly 50% in the past two years, the online retail market in 2015 is estimated to be SG$4.4 billion.
The much smaller e-commerce retail scene might be showcasing incredible growth rates, but the physical in-store sales comes out to be the champion in this matchup.
An enormous market valued at SG$52.4 billion in 2015, in-store retail sales have shown strong CAGR growth of 8.3% over the past two years and shows no signs of stopping.
To put things into perspective, at this moment, only 4% of household spending is done online in Singapore
Singapore’s E-commerce is Still at a Premature Stage
Singapore is home to a very late e-commerce scene. Relative to other countries such as US and UK, much fewer things are done online. The research looked at three key metrics to measure how advanced a country’s e-commerce is.
First, only 49% of Singaporeans book their flights online, falling way behind the UK’s 80%.
Secondly, the proportion of hotel bookings was examined. In comparison to the US’ 73%, only 40% of Singaporeans are using the internet to book their hotel rooms.
Lastly, apparel purchases online are at an alarmingly low 4% of all purchases. This is a significant indicator because the majority of online shops on the market are selling apparel.
Shopping is a Huge Part of Singaporean Culture
According to Letty Lee, CBRE’s Retail Director and an expert on real estate in Singapore, “Singapore is a shopping nation. Shopping isn’t just about buying something, it is about socializing and experiencing.”
Singapore as a nation has developed its shopping culture to an extent that many of its citizens prefer spending the time in malls rather than just quickly browsing on the internet. It is not only about the purchases consumers are making but the experience of “shopping” they’re after.
85% of all Singapore denizens shop in stores at least once a month compared to 49% of those who shop online.
In fact, to put things into perspective, Singapore has twice the retail space per person than Australia even though it is 10,000 times smaller.
Physical Stores Have Irreplaceable Features
There are some things that the internet and all the technology in the world will never replace. And those are the advantageous features that malls offer.
In addition to physically being there, malls offer the shoppers the opportunity to socialize with their fellow shoppers, dine with their friends, and enjoy the atmosphere of a mall which cannot be replicated for a person just browsing through the net.
The Omnichannel Shopping Experience
The management of the malls themselves are aware of the fact that they will still be here to stay for some time and are looking for ways to augment the strength of the malls with the technology of the online shops to create an “omnichannel” integrating both online and offline shops.
Some of the things that they have started include but are not limited to, Magic Mirrors where a shopper can virtually try on items, and “click-and-mortar” stores in which store items are tagged with a QR code that shoppers can scan and add to their online shopping carts for later buy.
E-commerce may be disruptive to physical stores in other places, but in Singapore it’s here to improve the shopping experience in both online and offline stores.