Hong Kong, 17 November 2014 – CBRE launches its first-ever Asia Pacific Consumer Survey—compiled from interviews with 11,000 consumers in 11 major countries across the region. Respondents were asked how and where they shop; how they value and perceive the shopping experience; and how they see the future of shopping in Asia Pacific. The report found that Asia Pacific consumers have high expectations for the overall shopping experience and that tailoring venues to match consumers’ preferences is vital for retail venues to be successful in the evolving shopping landscape.
Findings showed that consumers across the Asia Pacific region shared very similar preferences—affordability, cleanliness and security were ranked as the most valued factors among all age groups. Landlords and retailers should also take note of the need for convenience, with consumers indicating that accessibility and parking are important—especially the requirement for free parking—due to the lack of mass transit infrastructure in markets such as New Zealand. Around 80% of survey respondents preferred travel time to shopping destinations to be under 30 minutes.
“The key message from consumers is clear—landlords and developers need to get the basics right. Aside from price, the most important factors that consumers look for are cleanliness, convenience and security. By attending to the basics, shopping center operators will be able to help consumers focus on the main objective of visiting a retail destination—shopping,” said Jonathan Hsu, Director, CBRE Research, Asia Pacific.
The report also reveals some significant cultural differences and preferences within sub-regions and sub-groups. For example, the report shows that consumers in emerging retail markets, including Greater China, Southeast Asia and South Asia have high expectations of the overall shopping experience, whereas in mature markets, including North Asia and the Pacific, consumers place less importance on the overall shopping experience, valuing convenience instead.
What do Consumers Look for?
CBRE’s report revealed that consumers in Asia Pacific overwhelmingly prefer large shopping centers—defined as those with over 50 stores.
“With 65% of Asia Pacific consumers preferring large shopping centers over smaller shopping centers and high streets, this confirms the fact that consumers in the region highly value the overall shopping experience and variety provided by large shopping centers,” said Mr Hsu.
On the other hand, other findings show that low income groups and the younger generation tend to favor local high streets, whilst 20% of respondents still like to go to smaller shopping centers. However, over 40% of consumers believe that smaller shopping centers are unable to compete with the online retail market.
CBRE believes smaller shopping centers still have a future in this region. Joel Stephen, Head of Retailer Representation, Asia said, “if they are to succeed, developers must perform a high-level analysis of consumers in their catchment area; adopt the right price positioning; and consider focusing their trade-mix on food and neighborhood services.”
Consumers in emerging retail markets reported that significant improvements had been made to shopping centers in their region over the past three years. These improvements are aiming to provide consumers with a more complete “retailtainment” experience which has been shown to drive foot traffic and increase the overall time shoppers spend at a retail destination—this can be seen in a number of shopping centers in Hong Kong, and more recently Singapore. Yet some emerging markets in Greater China, India and Southeast Asia are still catching up with developments. This is partly due to the strong growth in shopping center construction witnessed over the past decade, resulting in many poorly managed and improperly positioned malls.
“Whilst the outlook for the bricks-and-mortar format remains upbeat, shopping center operators must be alert to the challenges posed by online retail. 80% of survey respondents said they would continue to shop as often or more in a physical store however 85% said they would also shop online, half of which said they will shop even more online in the future than they do now. The use of online shopping is increasing rapidly across Asia Pacific and retail landlords will have to integrate this platform into their overall strategy to remain competitive and, ultimately, to survive,” Mr Stephen added.
Making Shopping Centers More Appealing: Adapting to Changing Behavior
Competition will continue to be fierce in the retail environment with consumers increasingly browsing and shopping for goods online—45% of respondents will use their smartphones to shop over the next two years—meaning that landlords and retailers must work together to find a way to interact and connect with consumers. CBRE recommends landlords to adapt their online strategy in order to ensure they remain successful.
“Shopping center landlords must focus on understanding emerging retail trends, technology and consumer behavior. Landlords will have to develop fresh and innovative ways to understand and reach their audience in order to counter the growth of the online retail market,” says Sebastian Skiff, Executive Director, Retail Services, Asia.
- Using big data - Big data can measure and track levels of consumer engagement but is still underutilized by retail landlords in Asia Pacific. With many social media platforms providing data that can track “likes” and “check-ins” for products and locations, landlords and retailers now possess the ability to analyze consumer behavior in great detail and should use this to formulate a more tailored strategy to enhance their overall shopping experience.
- Creating simple and useful apps - Shopping center apps are a great way to access consumer data but are often mismanaged and ineffective in driving consumer engagement. Landlords must engage with software developers to find innovative ways to engage with shoppers for example providing incentives such as special offers and contests.
- Building your brand - Survey respondents ranked the presence of entertainment facilities and events relatively low in importance on the list of factors related to their shopping experience. However, CBRE strongly believes that these elements are crucial to ensuring the long-term competitiveness as a powerful tool for shopping centers to hold onto their customers for longer and maximize dwell time and spend.
In short term, holding special events at shopping centers does not always generate sales, however, one example of an effective event was at Harbour City—one of Hong Kong’s largest shopping centers—in May 2013. The internationally acclaimed artist, Florentijn Hofman, was invited to exhibit his famous 16.5 meter high inflatable “Rubber Duck” at Victoria Harbour. It attracted up to 8 million visitors, becoming at the time Hong Kong’s most popular event. According to Deutsche Bank, Harbour City reported a 16.3% year-on-year increase in retail sales in May 2013, compared to a 6% year-on-year increase in April. The success of this exhibition proves that landlords who invest in the right type of events, in line with their target and positioning, can achieve great returns not only in terms of branding, image and exposure, but in revenue as well.
“To attract new shoppers; retain existing consumers; and lure back old customers, landlords must create outstanding retail destinations in top locations; implement high standards of property management; and provide a wide and dynamic trade-mix backed by a strong marketing campaign,” said Mr Skiff.
In 2015, CBRE will publish a second report in this series focusing on reaching bricks and mortar consumers through Online to Offline (O2O) commerce channels.
Survey Definitions
The survey was conducted using online consumer panels. The findings therefore represent the emerging behavior of this important and fast-growing segment of all markets, but may not fully represent consumer behavior in markets with low online penetration. The survey is based on shopping trips for non-food items such as clothes, shoes, jewelry etc. but is referred to as non-food in this report.
Asia Pacific Average
Each country has an equal weighting
Country Groupings
Greater China: Mainland China, Hong Kong and Taiwan
North Asia: Japan and South Korea
Pacific: Australia and New Zealand
South Asia: India
Southeast Asia: Malaysia, Singapore, Vietnam
About CBRE
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2013 revenue). The Company has approximately 44,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through approximately 350 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
