The retail property market in Thailand remains a challenging environment. Sluggish retail sales and flat rental growth are contributing factors. Elsewhere, e-commerce—although in its infancy—is drawing millennial shoppers online. Coupled with the fact that consumers in Thailand have become more sophisticated and demanding, the traditional “bricks and mortar” shopping malls will remain stretched.
These factors have made ‘Placemaking’—like ‘Retailtainment’—a frequently-discussed topic and hot trend in the retail industry in Thailand, despite floating definitions.
Placemaking is about creating an environment that people choose or prefer to visit, and return to by incorporating and integrating several potential elements into a mall.
Thai retailers have been taking notice. So have developers, with a focus on placemaking now a genuine retail trend.
One of the key elements of placemaking is the scale—the bigger, the better! Some smaller malls are declining simply because they cannot offer diversity and variety. We are now witnessing the trend of making a place a ‘destination’.
For example, Em District in Bangkok combines three shopping malls: Emporium, EmQuartier and the upcoming EmSphere. The concept is being undertaken by the same developer, using different concepts which complement one another. For convenience, all three locations are linked by a skywalk.
Another example is Gaysorn Group, who is combining three retail centers: Gaysorn, Gaysorn 2, and Amarin Plaza. These are to be linked by pedestrian bridges and named Gaysorn Village. Completion is expected around 2020.
Other elements which are being emphasized are experience, entertainment and excitement. New concept tenants such as Bounce Inc., an indoor trampoline park. are embracing this idea. B2S, a local bookstore chain, has opened its first “Think Space” concept at Central EastVille with a total area of 30,000 sq. ft. as a place for new ideas, inspiration and networking.
Many landlords are allocating and improving public and green spaces in their malls in order to organize more social and marketing events such as F&B fairs, art exhibitions, charity events, fashion shows, and concerts.
We are also seeing that the proportion of F&B outlets in malls is greatly increasing as gourmet and savory experiences cannot be replaced by the online shopping experience.
The last key element happening in retail centers in Thailand is innovation and technology. Thailand’s first smart car parking system at EmQuartier is one example. A leading coffee chain also implemented the “E-Wallet” mobile application where customers pay for their orders and collect points. The brand uses it to inform customers about new products and promotions. Many restaurants are now using tablets as a menu instead of traditional paper ones. Moreover, hi-tech IMAX theaters, digital-integrated lounges, and online booking are available for the convenience of movie lovers.
Although online sales are rising, people still prefer to shop in-store as it gives real life interaction and new experiences. While online retail continues to pose a challenge to retail centers, real estate owners and developers are more and more adopting the placemaking concept and strategy into their malls to ensure continued appeal to the consumers.
Jariya Thumtrongkitkul is the Associate Director, Head of Retail Services for CBRE Thailand. She is responsible for coordinating with local and international retailers, and selling and leasing retail premises in Thailand. She has been involved in the retail industry since 2003 and has successfully handled many retail projects.