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Despite the advent of online retail, Filipinos still love the mall

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By Michelle Anne P. Soliman, Reporter

IT IS SUNDAY. EDSA — typically heavy with 350,000 vehicles per day — finally breathes. The traffic, instead, moves indoors, where people flock inside the mall.

To many Metro Manila residents, it is family day, and family day is spent inhaling the cool, crisp air-conditioned breeze in the comforts of the mall. It starts with Sunday mass happening in the mall’s chapel, followed by lunch at — you guessed it — one of the restaurants that have set up shop in the mall. The entire family then troops to the top floor, where the cinema is located, but not without a quick trip to the boutiques which lure customers with a glaring SALE! sign at the door. The day is capped with a lingering pit stop at the coffee shop — again, also in the mall — before the family heads back home and gets ready for the coming week. The largest shopping mall chain, SM, wasn’t lying when they said they’ve “got it all.”

Shopping malls have become an integral structure in country. What is simply a place for shopping to Westerners is a place for leisure for Filipinos. It has evolved into a destination for hosting business meetings and operations, as well as a venue for government transactions through satellite offices. Commercial development has grown and is no longer exclusive to urban areas, as it is slowly branching out to the provinces. Despite the advent of online retail, Filipinos are still in love with the mall.

In May, SM Prime Holdings, Inc., the country’s largest shopping mall operator, recorded a 15% profit increase with a net income to P7.6 billion in the first quarter of 2018, compared to the reported P6.6 billion during the same period in 2017. The shopping mall business generated a 59% revenue at P13.9 billion.

According to data published by the Philippine Statistics Authority (PSA), “The Philippine economy grew by 6.8% in the first quarter of 2018,” compared to the 6.5% growth in the same quarter of 2017. GDP growth indicates an increase in disposable income among Filipinos.

“Significantly, GDP is driven by consumer consumption or spending. So as GDP increases, demand for more retail shops in malls increases as well. With the government’s massive infrastructure program, accessibility stimulates business activities in the countryside. These pave the way for our mall development, expansions, and re-development,” John Nai Peng C. Ong, chief finance officer of SM Prime Holdings, Inc. and Steven T. Tan, chief operating officer of SM Supermalls told BusinessWorld in an e-mail.

THE MALL AND MALL-GOER: THEN AND NOW
The idea of leisure dates back from the Spanish colonial period with the introduction of the plaza the community converges. These included the city hall, a church, and a law court.

According to Dr. Rolando B. Tolentino (Sa Loob at Labas ng Mall Kong Sawi, 2001), professor at UP Film Institute in Diliman, Quezon city, the plaza was the place for socialization within the community. “The idea of leisure is Spanish with the [introduction of] plazas. It’s a democratic space that allows [you] to promenade. There is a playground or field, and there you can sleep under the trees or [have a] picnic. It is also where you do your political speeches or civic duties,” he told BusinessWorld in an interview.

“It was intensified by Americans because they added onto the plaza the music grandstand for the band. They also made beauty pageants. They also introduced sports — basketball, [and] baseball. You had a kind of multi-facetted space for community, [and] social life to manifest itself,” Dr. Tolentino said.

It was during the American period when shopping malls were first introduced in the Philippines with the construction of the Crystal Arcade in Escolta, Manila in 1932. It was the first enclosed airconditioned establishment with its interior having glass covered display windows.

At present, malls are a part of the modern metropolitan landscape with many of them in almost every city and situated in Manila’s major highways.

The early designs of the mall, as we know it now, were “[in the shape of] shoeboxes. [There was] maximum optimization of space,” Dr. Tolentino said.

“Then, you had the kind of malls that mimic[s] that kind of a beehive mode,” he said citing Trinoma and Edsa Shangri-la Plaza as examples. “[Those kind of] malls that you would really get lost [in], not just with the immensity of space. It’s calibrated to make you lost — to lose yourself, literally and figuratively. The more you lose yourself, the more tendency you will spend.”

The location where a mall is developed also contributes to the idea of a “citified culture” in cities. Dr. Tolentino added that the development of commercial areas is “purporting to be a more progressive city than the actual city itself.”

In the case of SM Prime, malls are developed according to market capacity. “We consider the market capacity based on population size, market potential, and market needs. Knowing the area profile and demographics is the basic data needed but understanding the community’s daily grind and concerns, inherent values and priorities will help us provide the correct mix of potential tenants who may be able to address the market demands. We also consider strategic property location. Accessibility to foot traffic and potential business trade centers are a few determinants of a strategic location,” Messrs. Tan and Ong wrote.

Environmental planner and landscape architect Paulo Alcazaren said that the location of malls in the Philippines originated from location model patterned in the United States. “The center of towns (in the United States) was expensive and the most efficient place to put them (malls) because they are a car-based society, they situate big box malls near the interchanges of their highway systems,” he told BusinessWorld in a phone interview.

“The mantra of commercial development is ‘location, location, location.’ If you’re in retail or anything that involves people buying goods or services, well mostly goods, restaurants where people eat, it’s really [about] location. Development companies that are involved in retail make studies as to where the best place to locate this (commercial establishments) and that depends on like they said, pedestrian traffic or gravity modeling depending on which determines catchment area of the mall or lifestyle center where it is located,” Mr. Alcazaren added.

The developers’ continuous revenue growth gives opportunity for the rise of more malls in cities and expansion in rural areas. Over the years, malls have also changed their design and have evolved to cater to the consumer’s needs.

“Even the oldest mall needs to regularly renovate and refurbish itself. It needs to update its look. Look is very important because it’s a culture of images in malls — culture of first world image of things that we can aspire for,” Dr. Tolentino said.

Messrs. Tan and Ong describe the “2018 definition” of a mall as a lifestyle destination. “Malls used to be known just as a shopping place. But now, it has evolved into a lifestyle destination, offering unique and fun-filled experiences for customers from all walks of life.”

SM Prime recently recorded from May 11 to June 10, 2018 that the average daily foot traffic in SM Megamall alone is 179,139.

“Change is an inevitable constant. It brings about challenges to spur growth. Amidst this scenario, SM Supermalls espouses the value of positive disruption thereby challenging ourselves to come up with solutions and innovations that meet and uplift our customer needs and wants,” Messrs. Tan and Ong of the unique SM malls’ characteristic. “The traditional shopping and food retail are still present in our malls, but their service offering and concepts are evolving in response to the changing style preferences, values, and palettes of our customers. We have seen how they evolved and grew through the years. With the rise of technology, virtual reality and experiential concepts are now in stores.”

“On top of offering more diverse retail store formats, integrated developments like the office and BPO towers play a part in the viability of our malls. Malls that anchor lifestyle cities will be the new norm as more people realize and feel the need to live, work and play in the same community. A roof deck that will house a FIFA grade football field, a live performing arts theater, a botanical garden — all these will soon rise as we continue to commit redefining malls,” Messrs. Tan and Ong wrote on the innovations done to make malls relevant to visitors.

MALLS AND TRAFFIC MANAGEMENT
A balance of efficient city planning, infrastructure, and mass transport system is necessary to manage density in the city.

“Each SM Supermall team is tasked to collaboratively work with the local agencies to ensure smooth traffic flow. Traffic planning is a must before we build a mall. Pre and post mall opening are mapped out ahead of time. SM Supermalls was also the first to adjust its mall hours in response to the changing lifestyle and schedules of its shoppers. Our malls in high traffic districts have been adjusted to 10 am to 10 pm. On Christmas holidays, we adjusted our closing hours to 12 midnight in anticipation of the holiday rush,” Messrs. Tan and Ong wrote on mapping out traffic flow within the mall’s vicinity.

“The rule of urban design or city planning is to manage this process within a larger context of infrastructure development. So, you don’t locate where there is not enough infrastructure to support an increased level of traffic, either foot or vehicular,” Mr. Alcazaren said.

“That’s where a lot of the things are not entirely satisfactory when the context for the locations for these malls, centers, or mixed used development are not thoroughly thought out by the large private development that they’re in or LGU that hosts it. Beyond the large private developments of metro Manila which involved areas/districts like BGC and Ayala, or the smaller extent Araneta and Eastwood. There’s a bit more support from infrastructure because private development has shown that it understands that it needs a support location with infrastructure,” Mr. Alcazaren added, citing the proximity of the given mixed used developments to the railway transits, and other means of public transportation.

“But once you get out of the developments themselves, that’s when you have problems like say when you step out of BGC District or Ayala’s District into the larger mess that we call Metro Manila, then, you hit your problems,” he said, pertaining to one’s change in attitude from the feeling of security in malls or developed districts to a shift in cautiousness when navigating the streets. “In outlying areas in the provinces, the magnitude of the problem is a bit less, but it still affects anything past the within where they developed or LGUs that host them,” Mr. Alcazaren said.

A mass transport system is a necessary solution to alleviate traffic in the business districts in urban areas.

“The solution to symptomatic issues like traffic is really the mass transport systems that should have been thought of even before we tried to densify our cities. If there is an efficient integrated mass transit system like the MTR in Hong Kong or MRT in Singapore where infrastructure can support larger densities of both business, commercial, and residential development. If we had those systems beforehand, then we wouldn’t have the traffic which comes mainly from vehicular traffic,” Mr. Alcazaren said, noting that despite the availability of public transportation options, many still depend on private vehicles.

Despite awareness of an architect’s practice, there is limited knowledge of urban planning among Filipinos. “Filipinos understand what buildings are, but most of them don’t know what an urban designer or landscape architect or environmental or city planner is, because there are not many of us…In the Philippines, there is a limited number of firms that specialize in urban design and planning,” Mr. Alcazaren said.

Mr. Alcazaren also suggests that schools should understand urban planning and how it has affected economic life. “Some concepts of urban design have no translations. Our educational system [has to be] more urban-oriented.” He also urges higher institutions of learning and schools of architecture “to produce more research and accumulate more knowledge on how urbanities affect Philippine socioeconomic life.”

MALL INTERIOR
In terms of the mall’s interior design, convenience is taken into consideration when in the space planning of malls which drive sales growth. “Like for example, SM Hypermarkets are strategically located either on the ground floor or basement parking areas for easier transport of goods to the customer’s car. The all-day dining and cafes are most likely to be found at the entrance of the mall when customers are in need of a waiting area when meeting someone or when waiting for their ride to arrive. Food and beverage establishments (F&Bs) are located at the Skyparks on the roof deck to where customers/shoppers can find a more relaxing place to enjoy quality time with family and friends,” they wrote.

“A smile and happy experiences are what needs to be fulfilled when a customer goes to SM Supermalls. We meticulously focus on providing the best customer service and convenience to each customer. That is why we provide full-service offerings making our malls a one-stop-shop. Feeling the pulse of the market, we ventured into pioneering the introduction of unique services such as fitness gyms, ambulatory clinics, government agencies, and chapels for worships — everything in one place,” Messrs. Tan and Ong wrote.

“Filipinos go to the malls for various reasons — as a destination, as a transient, as part of their daily routine. There are so much to mention but one thing is sure — our SM malls allow people to get together and engage with each other as they enjoy the space, the activities, and the entertainment all in one roof where a safe and comfortable respite is freely available to all. Being inside this safe haven gives one a sense of happiness, relief — a relaxed feeling that encourages them to shop, to eat or do errands before going home or the next destination.”

Dr. Tolentino notes changes on mall design interior. “Malls have midday sun lighting, until ang thinking mo maaga pa, hindi pa gabi para mawala yung notion of outside at ang mahalaga lang yung inside na mall experience. Things have changed nung mga 2000s nang ma-realize na the outside should be incorporated (Malls have midday sun lighting, until one would think that it is still daytime and not yet evening to lose the outside notion and focus on the inside mall. Things have changed around the 2000s when they realized that the outside should be incorporated,” he said, citing that malls have added gardens inside the malls. “Malinaw na gusto nilang mag-create din ng space na yung outside pwede nilang gawin na mas maganda inside. (It is clear that they want to create outside space which can be achieved better inside).”

As for strategic location of amenities, Dr. Tolentino noted the presence of movie houses in the malls’ topmost floors, “Movie-going is no longer a mass experience. It is now a middle-class experience because the ticket is costly,” citing that it costs half the daily minimum wage in the work force.

In addition, Dr. Tolentino commented that as consumers, nowadays, “You go to your own mall,” stating that practicality and being purposive in terms proximity and taste are considered when visiting malls.

“It also takes cognizance of the fact that we have no public spaces other than the malls. We have more malls than parks in Metro Manila. Part of the ‘malling’ experience is [really] just walking around in a kind of leisurely way until you tire, head home, even without making a purchase. The mall is an embodiment of a first world site that is very sterile, very safe [supposedly]. It’s a utopic universe wherein the things might work if the Philippines just might become first world,” he said of the kind of environment malls have cultivated for consumers.

THE RISE OF ONLINE SHOPPING
Online shopping and e-commerce has also affected the shopping behavior among Filipinos.

“Online shopping may be the future of retail in the global scene. But Filipinos by nature are known to shop until they drop, to eat or munch on something every 2 to 3 hours, to entertain and be entertained, to be around people or to be seen by others,” Messrs. Tan and Mr. Ong wrote.

“We’re not affected by online shopping. I think the way to go is to embrace them and to co-exist, because with the growth of the economy, there is room for everyone,” Mr. Tan said in a separate interview.

With the advent of online shopping and e-commerce, SM has developed an online portal which is set to be operation this year. “Our business task is to connect online purchases with physical store experiences through omni-channels, using our “click and collect” concept, they wrote.

THE MALL EXPERIENCE
Due to the growing population, increasing remittance consumption generated by OFWs, and city developments, malls have become a necessity.

“Urbanized areas are expanding on all locations. Of course, the mall has become the modern market place; there’s a need for them. The thing we have to look at is how to we properly integrate a mixed used development into the fabric of this expansion areas and how are these expansion areas for urban development better configured,” he said, noting that developments should be part of an efficient transport system, serviced by infrastructure other than transport such as water and power, a place with a sense of community.

An enlightened developer, according to Mr. Alcazaren, will study the effects of what they have done in the previous years, the right and wrong, repercussions, and how to build better in the future to make contributions to community building alongside business profit.

The rise of social media has also influenced consumer behavior as visitors have treated mall activities as experiences to be shared.

“Today’s shoppers have evolved. They have higher demands and expectations — they want to be informed, entertained, and want to be constantly presented with new concepts, entertainment, activities, service offerings, products, in a fresh, exciting way. We have seen how technology has changed the way they shop and dine,” Messrs. Tan and Ong wrote.

“Social media like Facebook and Instagram have influenced consumer behavior tremendously. These have become a platform for sharing experiences, opinions, and ideas engaging and encouraging consumers to try a lot of new things and experiences. People just go online to search for what is in and they get more from the readily available feedback and comments from the buyers on their products/services,” they added.

Dr. Tolentino equated the behavior in mall-going to the use of social media. “It (mall-going) is like [how we use] Facebook. We spend a lot of time in the mall, but it has not enabled us to create actual public spheres. Marami man [sa] atin ay nagmo-mall, pero hindi naman tayo nag-uusap. There are many of us in Facebook, pero wala naman talagang communication na nagaganap other than [mag] ‘like.’ (Many of us visit malls, but we rarely talk. There are many of us in Facebook, but no communication really happens other than liking posts).”

“The propensity to spend a lot of time, even if you will not do anything — just to fight off boredom, at least you’re not at home, you do not think of your problems, or you’re passing time — you’re at the mall. It’s similar with social media,” he added.

“I think our malls have been integrated into our culture with which we have now produced inter-generations of ‘mall-ers.’ We now socialize infants, [and] kids, even our lolos and lolas into the mall experience,” Dr. Tolentino said of the regular weekend gesture of visiting malls where everything is available.

Likewise, Dr. Tolentino also believes that malls will continue to develop as “governance has come into the malls,” citing that one may visit the mall to process documents such as clearances, birth certificates, and licenses. “Even the state has recognized the viability of malls as a kind of alternative site in governance. Though it’s no longer going to be a mall for consumerism, it’s going to be a mall to contain all aspects of our social life or needs.”

“It’s becoming more integrative because it enters all our experiences…Hindi nalang siya for shopping. Pumupunta ka na rin doon for a lot of services na dati wala sa purview ng isang mall experience (It’s not only for shopping. You go there for a lot of kinds of services that were not previously in the purview of the mall experience),” he said.

Five more SM Supermalls are set to open in the provinces. It is not unlikely that the mall will remain a fixture in Filipino culture in the years to come.

But why could they be so fixated?

Lahat ng ito (All of this) is really designed towards creating an alternative universe of first world modernism,” Dr. Tolentino said. “Samantalang, sa labas (Meanwhile outside), immediately, if you notice, you snap out. [Ka]pag pumasok ka ng (Once you enter the) MRT, mas mabantay ka na (you become more cautious).”

After all, in a city where the daily commute is a nightmare, a Sunday where pleasant new memories can be created is a saving grace. — with reports from Zsarlene B. Chua