Surviving The ‘Clicks Vs. Bricks’ Era : Who Can Be The Best?

clicks vs bricks

The boom in the eCommerce industry is also a worrying factor for the retailers and the shopping mall owners around the world. However, according to BNP Paribus, some of the prominent shopping hubs are tackling this risks better than the others.

According to Wee Liat Lee, Head Of Property Research at BNP Paribus, “Our view is that the threat of e-commerce is inevitable but malls that embrace this trend will remain highly relevant.” Wee further added that the multi-channeling environment is led by the retailers and this trend is expected to move from UK / Europe to Asia. This is with reference to the market strategies that provide consumers with a choice for buying products online.

It’s no secret that eCommerce is one of the fastest growing sectors worldwide. The online sales projected on Cyber Monday (A USA shopping event) were $1.5 Billion in the year 2013. Meanwhile, China’s equivalent was projected to $5.7 Billion. According to the UK eCommerce industry body IMRG and advisory firm Capgemini, the total online sales in the United Kingdom are estimated to 107 Billion Pounds ($180 Billion).

However, irrespective of the increase in online shopping, the analysts at BNP Paribus sate that many shopping-dominant cities around the world will prove to be resilient in the long term. For example, Europe and UK are key countries for how the concept of ‘clicks and bricks’ can co-exist. According to BNP, the consumer decisions consist of a combination of online channels and physical channels for research, shopping and financial purchase.

According to the BNP analysis, at times the physical stores are superior to the online channels when it comes to establishing a brand, ensuring quality of service and creating a unique experience. Some prominent online retailers have also expanded their business to physical stores. In the mean time, the mall operators who have been thriving on the physical stores are adopting the digital strategies.

In Asia, most of the top malls of China / Asia have been configured for the arrival of the multichannel retailing era. A wide range of food and beverage outlets, large malls, flagship stores and the event-driven malls are extremely encouraging factors. The smaller shopping malls found in the lower-tier cities of China might be negatively impacted as the retailers cut down on the physical experience. BNP Paribus had a conversation with the individual mall operators present in Asia and discovered that Hong Kong’s Hysan Development Company and Hang Lung, China’s Longfor Company and Singapore’s CaptialLand Company were among the best prepared companies for multi-channel retailing. These companies were equipped with the perfect teams and plans for rolling out the digital strategies.

Along with a boom in the eCommerce industry, the other risks that might have a grave impact on the shopping malls include supply risks, talent retention and the ability to acquire land at an affordable price.


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