By Keren Concepcion G. Valmonte, Reporter
BRICK-AND-MORTAR stores are expected to remain relevant to the consumers’ shopping experience despite the ongoing digital shift brought about by the pandemic, property services firms said.
“Despite the emerging e-commerce industry, mall-goers were observed to still shop in brick-and-mortar stores,” Santos Knight Frank Head of Research Jan Paul D. Custodio said in an e-mail to BusinessWorld on Dec. 15.
“Seeing the actual product may have become a factor brick-and-mortar stores to remain relevant nowadays,” he added.
Leechiu Property Consultants President and Chief Executive Officer David T. Leechiu noted that across the globe, brick-and-mortar stores remain king.
“Even in the entire world combined, the total online retail is less than 20% or 30% of total shopping in the world and that’s despite all the advances that we’ve made in the online experience,” Mr. Leechiu said in a virtual call on Dec. 15.
However, VR (virtual reality), hologram technology, and the metaverse may change the way people shop in the future.
“Those virtual platforms will change the retail experience without leaving your home, and I think that is the bigger issue with shopping malls,” Mr. Leechiu said. “This whole transition into digital space is going to be outdated very soon as the metaverse steps in.”
For now, retailers are expected to continue investing in their digital platforms to complement their physical stores, KMC Savills Co-founder and Managing Partner Michael McCullough said.
It is expected that retail space take-up in malls may not recover to the pre-pandemic highs.
“The tenant mix will evolve, incorporating a diverse set of essential goods and services, which are more proximal to the communities,” Mr. McCullough said in a separate e-mail on Dec. 15.
JLL Philippines noted that the tenant mix of malls has already shifted since the pandemic began.
“We also saw more participation from (stores offering) gadgets and technology, as well as healthcare facilities in the pipeline for upcoming stores, which mirrors the increasing demand from these categories brought about by the pandemic,” JLL Philippines Research Manager Karisse N. Garcia said in an e-mail on Dec. 7.
Meanwhile, food and beverage (F&B) stores took up less space, JLL Philippines said, making up 26.7% of the mall’s tenant mix versus 40% prior to the pandemic.
Ms. Garcia said they are expecting F&B outlets to rebound and once again lead the tenant mix of shopping malls.
However, Santos Knight Frank’s Mr. Custodio said they did not see “significant changes” in the shopping malls’ tenant mix amid the pandemic.
“Mall operators are more open in accommodating potential tenants to fill in the abundant vacant spaces inside malls,” Mr. Custodio said.
In its Dec. 20 report, Colliers Philippines said it expects retail space vacancy to rise up to 17% in 2022, with the addition of 523,700 square meters in new space.
Colliers also recommended that mall operators be flexible with space usage by converting some areas for pop-up stores and turning activity centers into COVID-19 (coronavirus disease 2019) vaccination areas. It also suggested that malls increase al fresco dining areas and introduce park-and-dine services.