New Trends - Successfully branding retail centres
Issue 29 - June 07

Asia has become the hub for the biggest shopping malls in
the world. In mature markets, the ‘build it and they will come’
approach is no longer an option, we look at how branding influences the creation of successful retail centres.

Today’s consumer is a sophisticated creature, who owes no loyalty to a shopping centre unless it meets their high expectations and offers a unique shopping
experience. An innovative approach giving rise to a new trend is incorporating branding strategies from the design stages of the shopping mall up to where the
end product delivers top customer experience. Saxone Woon, Managing Director, Immortal The Design Station Pte Ltd, highlights that a successful retail centre adopts a two tier strategy taking into consideration both “the shoppers and its shops.” Planning is a crucial factor, “you need to plan and determine the vision of your shopping centre,” understanding the needs and wants of your consumers.

Rachel Vickerstaff, Consultancy Director, Lloyd Northover, says that “success comes from recognising that branding is not a cosmetic overlay with a cool
logo and swish banners and billboards, but is instead a strategic positioning exercise influencing every customer touch-point.” She believes that a successful
shopping mall has to clearly articulate an offer that is not only relevant to and valued by target customers but which sets it apart from other retail centres. This offer has to meet the customers’ expectations not only through its logo and marketing but it has to create a branding experience through its physical facilities and the right tenant mix, and as Vickerstaff points out, through “its management style and excellent customer service approach.”

mixing and matching
The right design plus the right tenant mix that matches the customers’ experience are the best ingredients for any mall’s success, points out Phil Kim, Senior Vice President & Managing Director, Jerde Partnerships, looking back at one of his company’s projects. When his company designed Langham Place Mall, Hong Kong, the retail portion was specifically geared towards a young audience. Langham Place is a physically challenging project and is designed for heightened excitement “so if you are 15-25 years old you will certainly find a lot of products matching your needs and wants” says Kim.

“It’s always the collective work that strengthens the retail centre’s position in the market,” says Kim, referring to the fact this depends on the collection of
tenants which have the ability to portray the specific overall brand and not so much on the choice of individual tenants.

Matching the retail centre according to the demographic of its visitors is essential. “Your audience is critical” says Vickerstaff, further pointing out that “it’s not just
the demographic of people visiting the centre, but their psychographic profile (their lifestyle, brands they relate to, their rational and emotional drivers, usage habits)
that is key.”

Don’t let the brand intimidate your audience, advises Woon, create an experience that matches the shoppers’ personality.

planning carefully
Different companies employ various methodologies during the planning stages to determine who will comprise a mall’s demographic. For example, Lloyd
Northover, an international brand consultancy, uses the services of a professional research firm to conduct a “Usage and Attitude” study for given catchments
areas, explains Vickerstaff. “This provides us with an insight of who the target audience is, how they might use the centre and what they might want out of it.
When combined with information from other sources on retail trends, the competitive environment and market circumstances, the audience profiling becomes the inspiration for developing alternative positioning
scenarios”. The various scenarios are then tested with the public, and the one that seems best suited for that audience is selected.



emerging vs. developed markets
During the Retail Space Asia Conference, 2006, Christian Wright, Director of Retail Planning, Knight Frank Hong Kong, discussed the key issues for retailers
in emerging markets. He pointed out five issues that need to be considered:
• The vast majority of existing and planned centres
have fundamental design flaws
• Lack of transparency
• Oversupply of malls
• Landlords have limited experience, lack of management skills with little knowledge of the retail sector
• Long term interests of landlords are often at odds with retailers.

In order to overcome these issues, developers and landlords in emerging markets need to use the same methodologies of audience profiling as the ones
in mature markets. Vickerstaff’s opinion is that all elements will need to be tailored to suit the local market where appropriate, but in general these studies
do not differ from developed markets. She highlights that branding is not well understood in emerging markets and often a copycat approach is taken.
However, “transporting a brand from a mature market“ is not always appropriate for the local circumstances.

role of government
Governments can play various roles in terms of offering land use or zoning restrictions. Kim is of the opinion that mixed use is better than the traditional single use zoning of land and that an economy’s performance allows for greater flexibility to develop the best kind of uses. He points out that Hong Kong’s less developerdesirable areas are warehouse districts and suggests
that the Hong Kong government has not encouraged alternative uses for old warehouse districts, which have been unpopular or abandoned. “If you look at European cities, US cities, that’s where the greatest activity has been generated. Without a warehouse district, the idea of having a Silicon Valley would never have
existed.” Kim believes that warehouse districts are great laboratories that act as a testing ground to see what people actually want.

re-launching the brand
What strategies can one employ when a retail centre is losing ground? Ian Thubron, Executive Vice President, TBWA Asia Pacific says that you need to
renew awareness of the brand. He gives Pacific Place as an illustrating example. When it was launched about 15 years ago, people believed that it would be
an unpopular place to shop because of its “remote” location. However, it soon became Hong Kong’s leading mall as the Admiralty area grew to be a busy
transpotation hub and the mall and surrounds had plenty to offer: conference centres, office space, exclusive retail stores. However, over the years it
began to fade into anonymity as other shopping malls gained popularity. In 2004, TBWA helped to re-launch the brand, “raising awareness of what Pacific Place
stands for.”

Thubron explains TBWA’s strategy. In principle there had been no huge changes at Pacific Place over the years, so the task wasn’t to say anything major. Instead, TBWA launched a strategy tagged “RECONSIDER” that involved changing peoples
perceptions of the mall. The previous tag line for Pacific Place was “The Place to Be” but ten, fifteen years later this was no longer relevant for the mall’s target
audience. In fact, there was a glut of new competitors such as IFC or Festival Walk aggressively promoting themselves. Instead, TBWA tried to use Pacific Place’s
previous position as Hong Kong’s premier shopping centre, developing the catchphrase “Expect the Unexpected” to excite people and make them inquisitive
about changes at the mall.

new trends, new shopping experience
Vickerstaff highlights that ‘lifestyle malls’ are another fading concept. New generation malls are no longer about shopping but “are destinations in their own
right with a requirement to provide a broad range of entertainment.” She says that attracting the right anchor tenant can set the tone for the entire trade mix.
However, in order to attract that tenant, you need a sophisticated operator who knows how to market the overall project and employs smart advertising strategies
to maintain it. This is especially the case with the likes of premium brand tenants such Gucci or Prada, points out Kim.

Malls these days need to know how to market their resources better, for example, enable the additional utilisation of space such as paid carparks and bring
consumer groups into play, comments Vickerstaff. Developers are now concentrating on how to maximise their non retail revenue (NRR), by using brands to create unique customer experiences beyond shopping and dinning. She says that ultimately, trends in shopping centre development can open up new possibilities in retail branding but this involves developing clear points
of differentiation from competitors.

advertising and positioning
The positioning of a shopping mall needs to be thought about carefully, especially in already mature markets. Vickerstaff advises that positioning should depend on
three core factors:
1) The usage habits and motivations of the target audience
2) The level and type of neighboring competition
3) The neighborhood in general

In terms of advertising methods, Vickerstaff says that shopping centres often
employ a combination of thematic advertising (image driven), supported by tactical
promotions which can be either thematic (food festivals) or seasonal (Christmas).
Other methods for raising a mall’s profile are to host events or art exhibitions to grab customers’ attention. Loyalty card programmes can sometimes work but they do cause administrative hassle. In general, advertising media selection will usually involve TV, press and magazines with some billboards in the vicinity of that mall, says Vickerstaff.

With a huge number of new retail centre offerings entering the market, and the
existing players bolstering their position, branding has become a vital tool for
developers and owners of malls to attract footfall and increase retail revenues. A
fully integrated strategy must involve all areas of the centre, from tenant mix to
facilities management to overall marketing and communications strategy. The key is understanding the market, and positioning the ‘brand’ to appeal to the right tenants and consumers. The right branding strategy will go along way to securing occupation rates for many years to come. RFP

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