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3 Retail Trends Investors Should Be Watching Out For

This morning, CapitaLand Limited (SGX: C31) announced its brand-new “phygital” (the coming together of physical and digital) retail concept at Plaza Singapura, named NomadX.

NomadX has 11,000 square feet of space showcasing a plethora of online retailers and a multitude of brand names. This really excited me as I envision a phygital concept to be the future of retail, where customers make use of technology to engage with retailers (and vice versa), and where customers can also experience a product or service before purchase. Here are three retail trends I managed to tease out from CapitaLand’s announcement which I think would define the future direction of retail.

Omni-channel presence

Online retailers such as Alibaba‘s Taobao, as well as online fashion brand Style Theory, will be opening their first physical outlets in Singapore through NomadX. The trend now is for online businesses to have a physical presence so that customers can see, feel, and try out products. This trend has been gaining momentum in many malls with previously online-only businesses starting to extend their reach into brick-and-mortar locations.

What I’ve described above is known as omni-channel marketing and many brands and companies are embracing both online and offline (O2O) elements in order to provide a satisfying consumer experience. Previously, brands with physical outlets were keen to go online, but now the trend is both ways – online brands also want a physical presence to imprint themselves in customers’ minds, while offline brands are going online to be able to reach a wider group of customers.

Pop-up stores

More malls are increasingly looking at pop-up stores and pushcarts to drive shopper-traffic and to allow consumers to try out new and refreshing retail concepts.

CapitaLand’s announcement mentioned “short-term leases with plug and play features.” This allows for quick rotation of new brands and concepts, all of which appeal to discerning millennials who have more fickle tastes than their parent’s generation, as they are exposed to social media and the Internet from a young age.

Millennials are the next generation of big spenders and they embrace a wide variety of different styles and concepts, hence pop-up stores make sense as it allows a mall to curate its retail offerings to suit a particular customer-demographic. Malls will experience better occupancy rates (as open space is better made use of), higher traffic (which leads to a virtuous cycle of attracting more customers), and are also able to adjust the tenant mix more quickly if need be.

Experiential shopping

Experiential shopping is the new buzzword now. It replaces the concept of staid old malls with ageing infrastructure and dated brand names. CapitaLand mentioned that NomadX will use facial recognition technology, interactive touch-screen televisions (customers are able to interact with product walls using QR codes), and surround-sound technology for an immersive aural experience.

The use of such technology not only enhances the shopper experience, but it also enables a retail concept to customize its product offering according to customers’ likes and dislikes by capturing pertinent shopping information. Though some of these technologies are only just being implemented in malls and are still in their infancy, Plaza Singapura is not the first mall in Singapore to announce such developments –  Funan, another mall that is part of CapitaLand’s umbrella, will also incorporate fresh new technological features. Funan is currently under development and is slated to open in the second quarter of 2019.

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The Motley Fool Singapore contributor Royston Yang contributed to this article. Royston does not own shares in any companies mentioned.

The information provided is for general information purposes only and is not intended to be personalized investment or financial advice. The Motley Fool Singapore writer Chong Ser Jing owns shares in CapitaLand.