In the highly competitive retail space, retailers are scrambling to reshape and redesign the way they market and sell everything from food to cosmetics to ensure they are able to remain relevant and grow their market share.
For many this is solely focused on perfecting the customer experience, especially across channels. For others it is all about cutting costs and optimizing performance.
Landlords with vacant space on their hands have turned to pop-up stores and short-term leases to draw attention to store locations.
Retail in Asia met with Hilda Wong, Head of Customer Experience Management at Link Reit, to better understand the strategies landlords can use to attract customers and boost their tenant’ activity.
Link REIT is continuing its expansion into Mainland China with RMB 2,560 million acquisition of Beijing Jingtong Roosevelt Plaza, marking the company’s second acquisition in Beijing and fourth acquisition in Tier-1 cities in mainland China.
RiA : Link Reit is the first real estate investment trust listed in HK, you have a portfolio comprising retail facilities, car parks, and offices across HK, Beijing, Shanghai and Guangzhou. It seems that you specialize in shopping malls aimed to redefine urban destinations that are quite different from central areas. Which areas are you focusing on in the different cities?
Hilda : The majority of our portfolio is in HK and most of the malls are located near public residential areas. We own 10% of the retail space in HK, so we are not progressing in a specific district per se but covering the whole HK at large.
In terms of our expansion to China, we have recently acquired 3 shopping malls in Guangzhou, Shanghai, and Beijing, all Tier 1 cities well-served by extensive transport networks.
RiA : Who is your customer profile in general?
Hilda : As 100 of our 130 malls are located next to residential areas, our customers are mainly those nearby.
For some, the malls serve the immediate neighbourhoods with a relatively smaller catchment area, and inside, shops focus on daily essentials.
Others are larger, and serve not only those living in nearby public housing but also those living in privately owned residential area, and, for some, the malls are positioned as a hub in the district.
Most of our marketing programs provide crowd-drawing experiential activities and are meant to build traffic and boost our tenants’ businesses.
The app that Link Reit launched 3 years ago called “Park & Dine” addresses the younger and tech savvy segments as well as the drivers’ segment.
As we annually run research to understand our customers, we discovered drivers are bigger than average spenders as they usually come to our malls in a group — with friends and families. Even though the HK public transportation service is very efficient, people like to drive.
Thus, we saw the need to develop a digital platform to ease their experience to facilitate them to find where to park or dine at our shopping malls and discover which products to shop around.
RiA : How are you addressing the need of the younger generations?
Hilda : Mongkok in Hong Kong, for example, is a top 10 attraction for both local and tourists, two segments we target, but T.O.P is our first strategic property located in the CBD area targeting young generations.
From the trade mix to the in-mall experience and the digital platform we developed to engage with them, we really tackle the younger segment.
They are a generation used to online shopping and the two key elements that can attract them back to the physical world are experiences and F&B.
F&B is one thing that you cannot replace by online shopping since you need to go out and eat. Most of the F&B at T.O.P is a first in HK which appeals to the younger segment as they grew up with the internet and social media and are very much aware of what is going on around the world.
Another essential feature to attract younger customers which we focus on are social elements.
At T.O.P, we are using the app to build a community. The app allows people to hook up with others interested in coming to T.O.P and set up a lunch, dinner, or shopping trip, even though they do not know each other.
RiA : In terms of tenants, what are you focusing on in your malls?
Hilda : It all depends on the location and positioning of the mall in question.
As most of them are in residence areas, most of our tenants offer necessities such as food or fresh market goods, and basic items that residents need.
However, for a mall located in the CBD area, the mix at T.O.P for instance will be quite different. In addition to the latest F&B offers, we focus on fashion accessories and cosmetics.
One example is Aland, a popular Korean fashion brand which has their flagship store at T.O.P.
We also introduced a new retail concept at T.O.P as some of our retail space is reserved for pop-up stores. We often change our offering (in pop-up stores) so that our young shoppers can get new and interesting stuff coming in every now and then.
This summer, for instance, Nike had their world cup jersey shop here.
RiA : Which trends are you able to spot among the categories in your mall?
Hilda : One major trend is the growth of digital engagement with our customers.
Digital devices are a key to integrating customer experience which is why we developed our e-platform.
Our Park & Dine app offers e-queuing for people to efficiently queue up for F&B spaces. We also leverage our digital platform to distribute e-Coupon for our tenants so that customers are incentivized to get to the shop and purchase more.
Given the audience at T.O.P, which is younger and more tech savvy, we introduced a merchant app to our tenants to help them improve touchpoints with their customers.
Instead of investing heavily in system upgrades or integration with the tenant’s POS, we introduced our merchant app to their frontline operation staff to facilitate the entire customer interaction process with our loyalty program platform.
RiA : There are a lot of initiatives aimed at enhancing customer experience but some are not necessarily focusing on transactions such as exhibitions and brand activations so what is the strategy behind and what type of events are you focusing on?
Hilda : Due to the rising digital device usage and social media popularity, we introduced many selfie spots for people to take pictures for sharing.
When we first launched T.O.P, we engaged a Hong Kong graffiti artist, who had grown up in Belgium. She created many eye-catching graffiti art around the mall which have become one of our most popular selfie spots.
We also have music shows, broadcasted live on our app, to attract youngsters to come regularly.
RiA : Do you solely focus on local artists?
Hilda : Mostly but some are a cross over.
For instance, we introduced Mr. Do Nothing, originally from Korea, but we used a local artist to do the lighting around it.
We aim to be a local musician incubator. We offer all the equipment needed so that people can just come, plug and play, sharing their music with us as well.
RiA : What do you think is going to be the impact of the Greater Bay Area on your business?
Hilda : We are already expanding in the Greater Bay Area region with our latest acquisition in Guangzhou.
I believe the launch of the high-speed rail will bring much more traffic, which will benefit our malls, T.O.P, among others.
RiA : What is next?
Hilda : We are focusing on building more O2O, leveraging the digital platform to enhance customer experience.
We also want to better equip our tenants as we have a huge range of occupants, from large chain international tenants to local mom-and-pop shops.
If the large international chains have their own strategies and resources to ride on this digital trend, the mom-and-pop stores are in greater need of support. That is where we step in.
In addition to our digital platform, we offer a lot of trainings and networking for these smaller businesses. We want to assist them and help them to work with us so that we can all grow together along with this trend.