Located in Kuala Lumpur’s iconic Petronas Twin Towers, Malaysia’s Suria KLCC mall ended the year 2022 on a high note, experiencing a 4.5 percent rise in revenue in the fourth quarter alone to RM125.4 million (USD28.2 million), in its first year since the country lifted its border restrictions.
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Suria KLCC’s executive director and chief executive officer, Andrew Brien, attributes these positive results to an increase in foot traffic and stronger tenant sales.
Amid challenging times in retail, the mall welcomed a number of new brands such as the Hong Kong multi-brand fashion house, I.T., London restaurant chain Burger & Lobster, luxury watch and accessories brand Boucarad, and Japanese home brand Nitori, while retaining its exclusive partnerships with brands including Alexander McQueen, Bally, Blancpain, and De Beers.
Here, Retail in Asia sits down with Andrew Brien to discuss the mall’s tenant strategy and the evolution of Malaysian consumers’ preferences.
RiA: How are you approaching Suria KLCC’s growth following the pandemic?
Brien: We recognise the importance of both local and international visitors to our business, with a typical day at the mall seeing 80 percent local visitors and 20 percent foreign visitors. Our targeted efforts to create an inviting shopping experience and offer incentives have realised a 64 percent increase in footfall to December 2022 when compared to 2020, and a 70 percent increase in the first quarter this year compared to 2022. While international tourist arrivals have not fully recovered, our marketing campaigns and strong local support led to turnover in 2022 surpassing pre-pandemic levels.
We are excited about the anticipated return of Chinese tourists, who were one of our top five foreign visitors pre-pandemic. According to Tourism Malaysia, we are expecting the number of tourists from China to surpass the pre-pandemic level from July onwards.
RiA: What developments can you share on your broader operations strategy?
Brien: Our market position is maintained through our in-depth understanding of our customers. Our tenant strategy is focused on curating a blend of international and local brands to cater to the diverse needs and preferences of our customers. This is achieved through our unique research approach, which has enabled us to build a trackable base of consumer trends over the last 15 plus years. With this knowledge, we transcend the bricks and mortar and digital marketplace, ensuring that our customer experience evolves with unique experiences that keep customers coming back to our mall.
Suria KLCC also recently completed the reconfiguration of its previous food court area, creating 12,000 square feet of additional retail space set to fully open in mid-2023. This new space features an exciting array of dining options which add to Suria KLCC’s already impressive line-up of restaurants, catering to the diverse tastes and preferences of its patrons.
Adding on to the exciting news, one of our anchor tenants, Isetan KLCC, will undergo a major renovation starting in July 2023. This renovation is a pivotal part of our long-term plan to revitalise the retail segment and will have a positive impact on Suria KLCC once it is successfully rejuvenated.
Overall, Suria KLCC’s commitment to innovation and curation of its retail mix continue to attract new and exciting brands while retaining its exclusive partnerships, providing shoppers with an “always something new” shopping experience.
Suria KLCC consistently conducts targeted marketing campaigns and rewards shoppers to boost foot traffic and drive sales for its tenants. As part of efforts to provide a more targeted and seamless shopping experience, the mall has introduced the Suria KLCC shopping e-vouchers. These e-vouchers offer a paperless and convenient way for customers and businesses to purchase and spend across the mall, while also enabling Suria KLCC to gather valuable data to enhance its services.
RiA: Are you seeing any emerging trends when it comes to mall culture in Malaysia?
Brien: As Malaysian urbanites continue to experience a rise in income, there is a growing expectation that spending on leisure and entertainment will significantly increase, with a particular focus on experiential categories such as restaurants and hotels, as well as recreation and culture.
This trend suggests that mall culture is likely to thrive in the future, as people seek out more opportunities for leisure activities and entertainment. This statement highlights a key aspect of the future trend of mall culture – the desire to offer a diverse range of experiences for people of all ages.
By offering a range of activities and experiences, malls can become more than just a shopping destination, but a destination for leisure and entertainment. This can include attractions such as cinemas, indoor play areas and more. By providing a range of options that cater to different interests and age groups, malls can attract a wider audience and increase foot traffic, making them more appealing to both consumers and retailers.
Ultimately, this trend reflects the growing importance of experiential retail, where the shopping experience is not just about making a purchase but also about creating lasting memories and building connections with customers.
RiA: What other opportunities are you seeing for malls?
Brien: In addition to offering leisure and entertainment activities, another aspect of the future trend of mall culture is the inclusion of education centres. As people continue to prioritise non-essential spending, they may also place a greater emphasis on educational experiences for themselves and their families.
By incorporating educational exhibits and programmes into malls, they can become a place where visitors can learn, discover and explore. This approach aims to cater to the diverse needs and interests of different age groups, providing a complete and well-rounded experience for the whole family.
Another trend we have observed is the increasing demand for personalised experiences and digital integration in the shopping process. With the e-commerce segment predicted to grow significantly over our forecast period, there is ample room for retailers to expand their reach through online retail channels.
RiA: What are your thoughts on the future of malls?
Brien: As technology continues to advance, we expect to see more innovative solutions to enhance the shopping experience and improve operational efficiency. However, we also believe that brick-and-mortar stores will remain an important part of the retail landscape as they provide a physical space for customers to interact with products and brands in a unique and engaging way.
As the retail landscape continues to evolve, tenants are becoming increasingly selective in their choice of retail expansion plans and site locations. However, established malls with a curated mix and a loyal customer base can still afford to be discerning when choosing tenants. While established brands are always a safe bet, there is a growing receptivity to considering new players who offer a unique concept or have a strong team with solid retail experience and financial backing.
Landlords must be more inventive in their tenant mix, cultivating a collaborative relationship with their tenants to ensure a thriving retail ecosystem.
RiA: What have you observed in Malaysian shoppers’ habits following the pandemic?
Brien: One notable trend that we have observed is the increased adoption of digital technologies in the shopping process. With the pandemic restricting physical interactions and movement, many consumers initially turned to online shopping, this growth has now tempered whilst digital payment methods to fulfil their shopping needs is proving to be a significant advantage for the retail industry.
Most consumers still value the in-person shopping experience and are looking for ways to do so safely.
There has also been a growing focus on health and wellness among consumers, leading to increased demand for products and services that promote well-being. We recognised the importance of mental health, especially during the pandemic, and launched a month-long mental health awareness campaign called “We Are With You” in 2021. The campaign aimed to raise public awareness of mental health issues while promoting an environment of acceptance and compassion.
One of the highlights of the campaign was the creation of the Safe Space at Suria KLCC, which is the first safe space of its kind in Malaysia nestled within a mall. This space was created by devoting valuable retail space that would otherwise be rented out to create a corner that addressed mental health head-on.
Suria KLCC has pledged to make mental health a long-term focus in addition to its mission to support impactful organisations in building inclusive communities through collaborative high-impact programmes.
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We believe in providing our customers with a dynamic and engaging environment that goes beyond just shopping, and we will continue to pursue this goal in the years to come.