5 Strategies for “Thai Retail” to undergo the pressure from Digital Disruption, being ready for a change to “Shopping Center 4.0”
From not many years ago until today, Chain Retailers’ branches like shopping centers – malls in USA have been closed down, including fashion brand shops. The main reason was from the economic condition having an effect on financial stability of the organization and the confrontation with Digital Disruption which has e-commerce as a channel for consumers to purchase the main products.
When looking back at what is going on in Thailand, it is no denial that “shopping centers” in Thailand have confronted the same challenges including gloomy economic condition, sluggishness of consumers’ purchasing power and the growth of “E-commerce” which tends to grow more in the future. At present, “”E-commerce” has become the necessary channel to purchase. Moreover, “Smart phone” has been main platform in connecting consumers’ online world anytime and anywhere making the trade so easy to use; just a tip of the fingers.
Among the challenges surrounded, the situation for “shopping centers” in Thailand is opposite to USA’s as they can be expanded in both Bangkok and other provinces outside. It is shown in the information from THAI SHOPPING CENTER ASSOCIATION (TSCA) stating that
– Retail industry in Thailand is 15% of total GDP. Its business size is the second to manufacturing industry. In 2017, the growth is no less than 4-5%.
–In 2017, Retail GFA of all shopping malls in Thailand is at 19 million square meter and it is expected that within 2019, the area will expand to 20.9 million square meter.
–Before the end of year 2017, there will be 97 shopping centers which belong to TSCA members and it is expected to be 107 shopping centers within 2019.
–Total investment budget of TSCA members (including new project and projects for improvement and expansion). It is forecasted that in year 2017-2019, the investment budget is no less than 57,000 million baht.
–Central Plaza Korat and Central Plaza Mahachai will be the new project in 2017. In 2019, 4 projects will be launched, that are CentralPlaza Phuket, ICON SIAM, The Market Bangkok and Terminal 21 Pattaya.
5 strategies strengthening “Thai Shopping centers”.
“Shopping centers” in Thailand are still growing consistently because its evolution has been further developed and it is considered as the place to gather everything necessary for everyday life. Plus, Thailand is the hot country so, people like to stay in shopping centers to get away from the heat. However, the world is now fully turned to digital age so, “Thai shopping center business” must not be careless and ready to adjust to the changes. The retail business needs to turn around its image to become “Shopping Center 4.0” using 5 strategies to encourage Modern Trade. 5 strategies are as follows;
Customers are centered. Shopping center is designed and its form of service is adjusted to suit all ages’ and genders’ fast-changing life style in digital age. It is because customer behaviors and their expectation are different from before: “To purchase” is not the only thing they come for but, “to live a life” and “to update new trends and open for new experiences”. Therefore, the shopping center must include products and services that can support customers in each segment and their different life style, for example, the design and services of Disabled parking area, restrooms and lifts for Aging-society and trend for new living style like Co-working Space, services for family in new age, services for health lovers and sports and services for pets. Moreover, the design is also the mix of green area within the shopping center for city people to relax.
Focuses on marketing that mix all channels together to seamlessly connect shopping experiences and respond to personalized needs by using customers’ Big Data such as The 1 Card, M Card, Viz Card. Niche Marketing is therefore focused by dividing customers according to purchasing behaviors, life styles and preference in order to accurately capture target group better than random marketing. The example are using “Smart phone” to provide prompt notices such as promotions to target group and drag them to purchase in shopping centers. At the same time, the shopping center must create events that can customize according to each life style segment of consumers using the most out of Big Data. Moreover, Shopping Center 4.0 must provide the system that support Cashless Society such as payment via mobile phone and cards.
3) Build Partnership
To change from competitors to trading partners as the most challenging competitors currently are consumers themselves. All shopping centers will come to cooperation to support government policies and encourage to build shopping area both within Bangkok and other cities in order to urge economy and travel.
4) The structure of retailers in Thailand is strong because of big capital group with expertise and availability in capital and personnel resulting in the consistent investment. In addition, government has invested in Mega Project: transportation system including Motorway project, Double Track Railway and High-Speed Rail in main provinces. The example is transportation system travelling to Nakhon Ratchasima Province in order to place Korat as the central city of North-Eastern part of Thailand. So, the opportunity is seen by “Thai Retailer Group” to invest in shopping centers according to government’s Mega Project, for example, Central Plaza Korat, Terminal 21 Korat and the expansion of The Mall Korat which is to support Korat as a gateway of North-Eastern.
Besides, the investment is also in Special Economic Zone EEC such as Chonburi Province (Pattaya) and Rayong with the projects like Terminal21 Pattaya, Central Marina and Central Plaza Pattaya. There is also the investment in East Bangkok: Bangna-Suvarnabhumi which is connected to Special Economic Zone EEC, for example, Mega City project, Seacon City, Bangkok Mall and the new look of CentralPlaza Bangna. All these projects will support completeness and the fast- growing economy in the future as well as respond fully to new generation’s life style in such area.
5) The direction of real estate development for commerce in Thailand is moving towards “Mixed-use Development” where there are more than 1 types of estate within the area, for example, shopping centers, office buildings, hotels and residences. The composition of each type of real estate in Mixed-use Project is different depending on location and consumers in the area, for example, some projects include shopping centers, office buildings, and condominiums while some projects include office buildings and shopping centers or some projects include shopping centers, office buildings and hotels etc.
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