Hong Kong nightlife district pioneer and Lan Kwai Fong Group’s chairman, Allan Zeman, suggests that malls should stop focusing on selling people things and start selling them experiences as entertainment meccas. Will the retail space development community heed his call?
Zeman was in attendance at the MIPIM real estate conference in China last month, where he commented on the continued decline of the “traditional” model shopping center. As Forbes reported earlier this week, Zeman remarked that “online shopping has become a very big problem for most traditional shopping malls. In the last year, every shopping mall in China has been going down; I have had calls from so many developers asking me what they should do.” He went on to note that the traditional mall format — where 70 percent of the spaces are dedicated to retail tenants and the other 30 percent being food and beverage venues — no longer works.
Today, shoppers can find products online faster and cheaper. Take the one-day shopping event, Singles’ Day, hosted by eCommerce behemoth Alibaba, which generated a record-breaking $14.6 billion in sales this past year. This, Zeman says, is a prime example of the seismic shift that has occurred in how a younger generation prefers to shop.
But, as Zeman notes, “[Shoppers] still have to go out for entertainment and restaurants.” He suggests that the next incarnation of the shopping mall should be a reverse of the old formula. Around 35 percent to 40 percent of mall tenants should be retail, and up to 65 percent should be dedicated to entertainment and food and beverage spaces.
The future Zeman is imagining paints malls as showrooms for clothing and other luxury products. Shoppers will be able to browse but will likely look to the Internet to find the same item at a lower cost, as is already happening in stores today thanks to mobile devices. “They go online to find out if they can get it cheaper; if [so, they will buy them online] the next day,” says Zeman.
His latest project is the Shanghai Dream Center scheduled for completion in 2017. The venue will be aligned with the new mall model Zeman is suggesting, equipped with an animation studio courtesy of DreamWorks, an IMAX movie theater, a Broadway-style theater for live performances, food and beverage venues and a select number of fashion-orientated retail offerings. Consider it a beta test for Zeman’s theory, on the grandest of scales.