Thursday, December 31, 2009

Impact of Orchard Road’s new malls on older malls appears mixed

There is much to attract shoppers to Orchard Road this year-end shopping season. With three new malls open this year in the prime shopping district, retailers have pulled out all the stops to attract customers.

And while the new malls enjoy the novelty factor, the more established ones appear to be holding their own.

For instance, Palais Renaissance said it saw an initial drop in traffic of between 10 per cent and 20 per cent, after the new malls came up. However, it noted that shoppers are returning, thanks to its strong niche positioning.

Corinne Yap, deputy general manager, Leasing, City Developments (for Palais Renaissance) said: “Initially we had a fall in traffic, but we hear from the tenants that business is coming back because our customers are very different.

“They don’t really like shopping in a mass market situation. They like the hassle-free environment of a more quiet mall, more exclusive mall, which is more hassle free. You can get better level of services – more one to one.”

Going forward, Palais Renaissance is reducing its joint marketing activities with neighbouring malls. It is seeking to focus on its own promotions to target high-end customers.

The mall rewarded shoppers with vouchers and gifts to draw them in over Christmas. Over the next year, it plans to continue developing partnerships with credit cards, like the UOB Lady’s Card, and upmarket lifestyle magazines.

Meanwhile, other malls are targeting the families, especially the kids. Shopping centres like Centrepoint brought in popular children’s shows over the festive season.

Centrepoint is also enjoying a spillover effect from the two new malls across the road – 313@Somerset and Orchard Central. The mall believes it has a unique place along the prime shopping belt, which will help it attract new brands.

Wendy Low, general manager, Frasers Centrepoint Malls said: “Centrepoint has been around for the last 26 years and we are quite an icon.

“In terms of positioning, we have been attracting a lot of locals, especially those who grew up with us, as well as tourists. It is a must-visit destination for many tourists.”

With the new malls bringing new life into Orchard Road, industry watchers said the older malls can stay competitive by renovating to improve traffic flow, and to enhance the shopping experience for customers. And they can also capitalise on the familiarity they enjoy with shoppers.

Going into 2010, industry watchers said the competition will only get more intense, not just along Orchard Road. Shoppers will be spoilt for choice, with the new malls coming up at the integrated resorts.

Source: Channel News Asia, 31 Dec 2009

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