WHILE brick-and-mortar stores rush towards the online marketplace to prep themselves for a new generation, Amazon seemed to be going against the tide when they extended their online business to an actual physical store.
However, this is no anomaly as many e-commerce behemoths are following that route.
Does this trend offer a lifeline to brick-and-mortal businesses?
Is brick-and-mortar shopping really an outdated existence as predicted by some who heralded the supreme reign of online shopping?
Henry Butcher Retail managing director Tan Hai Hsin said the disruption of online commerce in Malaysia has not been “killing” shopping malls for the time being. While Malaysians are active in online shopping, the transaction amount is low compared to the entire retail industry.
“Online retail sales only accounts for less than 2% of total retail sales in Malaysia,” he said, adding that more online retailers are setting up local physical stores.
In his list, Zalora.com.my has a permanent premise at Mitsui Outlet Park, the well-known Christy Ng Shoes has set up a showroom in Damansara Utama, while popular Facebook Fatbaby ice cream has set up an ice cream parlor in Subang Jaya.
Coincidentally, CBRE Research’s latest report on Asia Pacific millennials has offered interesting insights on the social and spending habits of the Gen Ys.
Experience is everything
Based on the study, online shopping are millennials’ most frequent method of purchasing goods. However, they still enjoy visiting physical stores such as shopping centres and high streets.
Millennials visit physical stores to experience goods first hand.
The report stated around one-third of respondents see shopping as a leisure activity, while 23% said that they shopped as a way to spend time with friends and family.
As such, CBRE suggested successful shopping centres should create the right atmosphere and ambience for people to socialise and relax.
Source: CBRE Research
Eating out and live entertainment are key
In comparisons to other region, Asia Pacific millennials are bitten by the lepaking (hanging out) bug. They spend an average of 9.7 days a month going out for activities such as dining, movies, concerts and theatres.
The ever-growing gourmet culture within this region, coupled with long working hours, contribute the trend of eating out. Although most millennials live with their parents, they prefer to eat dinner with friends.
Source: CBRE Research
Millennials are spenders and savers
Compared to their global counterpart, Asia Pacific millennials have the luxury of spending more on leisure activities. They spend lesser on basic living expenses, which enables them to save an average 18% of their income. European and North American millennials, on the other hand, manage to save 11%.
Source: CBRE Research
Saving rates projected to rise
Economic uncertainty and slower wage growth have prompted millennials to hoard their cash. 33% of the respondents indicated their intention of saving more in the next three years.
Apart from economic uncertainty, many millennials are saving up to own a property in the future. This dispels the notion that millennials have little intention of owning a property.
Source: CBRE Research
The findings displayed millennials’ willingness to forgo going out and sporting activities to cut out their discretionary spending.
In conclusion…
Millennials enjoy spending their time and money on experiences such as travel, entertainment and dining out.
Despite being digital natives and displaying strong confidence in online shopping, millennials still enjoy visiting physical stores for experience and social reasons.
While brick-and-mortar retail is not passé, there is a need to move towards an omni-channel business.
Background
Last December, CBRE Research conducted a global survey of 13,000 young adults aged between 22 and 29 to examine how they live, work and play, and what this means for real estate.
The findings were used to produce the Asia Pacific Millennials Survey covering 5,000 respondents in Australia, China, Hong Kong, Japan and India (1,000 respondents in each market).
By Jonathan Roberts jonathan@propwall.com
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