It’s a mall world, after all

A mall isn’t just a mall. It’s also a lifestyle destination with a waterpark, a football field, an open-air amphitheater, a botanical garden, and many other things.

WORDS ZSARLENE B. CHUA | ILLUSTRATION TONE V. DAÑAS

As early as 2015, The New York Times sounded the death knell for malls and the rise of online retail in the US saying that while “premature obituaries for the shopping mall have been appearing since the late 1990s, but the reality today is more nuanced, reflecting broader trends remaking the American economy.”

The January article quoted the Co Star Group, a Washington-based provider of data for the real estate industry, saying that 80% of the 1,200 malls in the US are considered “healthy” (those with vacancy rates of 10% or less) but comparing it to the numbers nine years before when 94% of malls were considered healthy.

Nearly 15% of the stores in US are 10%–40% vacant, up from 5% in 2006, said the article. Now, malls in Europe and the US are taking an even bigger hit and chains like Macy’s, a department store in the US, announced in 2016 that it will close 100 of its 728 shops while The Economist reported in 2017 that nearly 10,000 stores in the US are to close that same year according to Fung Global Retail & Technology, a consultancy firm with offices in London, New York, and Hong Kong. “And there will be more to come,” the article said ominously.

And many would blame online shopping as one of the main culprits of the decline of physical malls with Amazon, considered one of the largest e-commerce sites in the world, posting US$178 billion dollars in 2017 in net revenue according to statistics portal, Statista. This number is set to grow to US$201 billion in 2018 and US$356 billion by 2022 homing in the point that more and more people are gravitating towards the convenience of shopping using their mobile devices and waiting for it to be delivered to their homes or offices.

While malls and physical retail stores might be faltering in other parts of the world, the same is not the case in the Philippines according to two of its largest mall operators—SM Supermalls with more than 70 malls nationwide, and Robinsons Malls with 50.

Of note: SM Mall of Asia enjoys 97% occupancy. “Business remains bustling,” said Steven T. Tan, chief operating officer of SM Supermalls, in an e-mail interview with High Life in September.

Both mall operators noted that the definition of malls is changing from merely shopping spaces to social spaces, said Arlene G. Magtibay, senior vice-president and general manager of the commercial centers division of Robinsons Land Corp.

“Today, a mall is not just a place to shop but a place to watch people, relax, connect, rejuvenate. It is a place where you can get your errands done, attend religious services, a place for multi-generational families. Shopping centers now strive to be more entertaining and engaging. We [now] view them more as social spaces rather than just places to purchase goods,” Ms. Magtibay said in another e-mail interview with High Life in September.

‘FOOD IS THE NEW FASHION’
And one of the more prominent changes malls have seen in recent years is the proliferation of dining options with Ms. Magtibay noting “food is the new fashion.”

“In the 1990s, food establishments accounted for roughly 10% of the total number of shops in a mall. Today, depending on the mall’s positioning, the number has increased to around 20% with some malls having as high as 30% of their spaces allocated to food,” she said.

“Filipinos, in general, are a very social people. We like to gather as families, or as a group of friends, officemates or org-mates, etc. and food is usually at the center of such gatherings. Given the convenience that restaurants offer and the increasingly hectic pace of modern life, it is not surprising that more people now prefer to dine out rather than host dinners at home,” she added.

Restaurants also function as an “accessible luxury,” said Mr. Tan.

“Food is no longer just for sustenance or celebration, but an experience for the taste buds that reflects your personality and can be shared digitally. By sampling different cuisines, you can travel vicariously. There is so much renewed interest in food. It’s accessible luxury. People now go to the malls principally to eat out. It is their impetus to go malling,” he said.

According to both Ms. Magtibay and Mr. Tan, malls have become lifestyle destinations that should provide more than just shopping experiences.

Robinsons Land opened its third mall in Iloilo (and 49th mall in all) in Pavia. Its signature feature: its own waterpark. Meanwhile, SM Mall of Asia is set to introduce a roof deck with a FIFA-grade football field, an open-air amphitheater, and a botanical garden “to complement the Manila Bay sunset,” said Mr. Tan. (SM is no stranger to introducing these amenities. Remember when SM Megamall opened the country’s first skating rink?)

Mr. Tan also noted that there is now a new trend of introducing hybrid retail where “strict formats are giving way to hybrids for a seamless lifestyle experience.”

“People now are expecting products and experience. So you have stores that have café components, barber shops serving cocktails, themed restaurants like DC Café that serves DC Comics-branded limited-edition collectibles, and vinyl record stores that serve coffee,” he explained.

‘OMNI-CHANNEL RETAIL’
The evolving definition of what constitutes a mall also prompted both mall operators to introduce new experiences in their respective spaces. SM Mall of Asia—a sprawling 406,000-square-meter space in Pasay City—is, according to Mr. Tan, undergoing a “redevelopment more than just a renovation” until 2022. This includes the construction of a third level to accommodate even more brands that wish to open boutiques in the said mall.

On the other hand, Robinsons’ flagship mall, Robinsons Galleria in Ortigas, is undergoing a multi-year renovation as a response to the market’s changing tastes and preferences. The expansion includes more dining establishments, a VIP theater, and PlayLab (described by Ms. Magtibay as “the country’s first digital playground”).

She also observed that more and more retailers will offer experiences that leverage technology (virtual reality content and immersive experiences) while restaurateurs will create “experimental dining [options] such as farm-to-table courtyards, gourmet food halls and cook-your-own-food facilities.”

“There will be a lot more interface between online and offline shopping as retailers move towards omni-channel retailing. People will be able to research online and buy offline, or browse offline and buy online, or buy online and pick up at the store,” Ms. Magtibay added.

Meanwhile, in a 2017 interview with BusinessWorld, Lazada’s then-CEO Inanc Balci, said that the goal of the Southeast Asian e-commerce site was never to replace malls in the Philippines because they recognize that malls for Filipinos are more than just places for people to shop. He said that the company is only looking to get a percentage of the Php60-65 billion retail industry into e-commerce.