Fashion
CapitaLand Mall Trust, an owner of retail malls in Singapore, is the largest listed real estate investment trust (REIT) in Singapore.
But, mere size alone does not guarantee that shoppers will keep coming back to its portfolio of malls. To ensure a steady stream of shoppers, the REIT has to keep itself plugged into the latest consumer trends.
One big retail trend is online shopping.
In my view, shopping online has three major benefits. One, there may be a wider variety of products. Second, the cost of similar products may also be cheaper online. Finally, there is the convenience of having items delivered to one’s doorstep. All three benefits could lead to lower shopper traffic to retail malls in general and thus potentially pressure CapitaLand Mall Trust.
Threat or opportunity
For malls, online shopping could be seen as a threat. But for Wilson Tan, the chief executive of CapitaLand Mall Trust’s manager, it is also an opportunity. He shared his thoughts on ecommerce in a recent interview conducted by bourse operator Singapore Exchange Limited (SGX: S68):
“We need to be digitally more savvy. We could consider the Internet as a threat, but the issue really is how we harness and ride this horse.”
With the above in mind, Tan shared two key initiatives that CapitaLand Mall Trust is working on. The first one is a loyalty program that comes from CapitaLand Mall Trust’s sponsor and manager, the real estate outfit CapitaLand Limited (SGX: C31). The report of the interview explains:
“CapitaLand’s CAPITASTAR loyalty programme – which boasts over 2.6 million members across the five Asian countries where CapitaLand malls operate, and includes more than 800,000 members in Singapore – is one approach to better understand shopper behaviour.”
The CAPITASTAR loyalty program allows members to accumulate points and thereafter, claim discount vouchers to use in CapitaLand’s family of malls (this includes CapitaLand Mall Trust’s malls). This could encourage shoppers to shop at the REIT’s malls. Tan also said that the loyalty program gives the REIT deeper insight into shopper preferences.
The number of CAPITASTAR loyalty card holders in Singapore – over 800,000 – can be considered impressive, given that Singapore has a population of only around 5.5 million people.
There’re more plans on the way. CapitaLand Mall Trust is also testing an online delivery platform at Raffles City Shopping Centre, as the interview report mentioned:
“Its online order and delivery platform Food to Go, which involves participating food and beverage outlets at Raffles City Shopping Centre, is another initiative. The current beta programme runs until 30 June, and plans for enhancements are underway.”
Tan feels that this digital effort could help the REIT’s tenants increase their sales. Helping tenants achieve higher revenue could be beneficial for the REIT as it could lead to better rental rates down the line.
Foolish takeaway
In my view, online shopping is here to stay and might take up a bigger share of the retail market over time. It is up to Singapore malls to decide whether the trend is a threat, or as Tan sees it, an opportunity.
