Are Retail Malls Dying?

THROUGH AN F&B LENSE:
SHIFTS IN THE FOOD LANDSCAPE
MERRILL PEREYA
QSR PROFESSIONAL, AUTHOR, CONSULTANT,
MOTIVATIONAL SPEAKER & IDEA GENERATOR
© 2016 Expand Your Brand

WHO AM I?
I expand and commercialize franchise
operations, specifically in Quick Service
Restaurants (QSR).
Brands include:
• Domino’s Pizza (Indonesia)
• Healthy Habits (Australia and New
Zealand)
• McDonald’s (Saudi Arabia,
Pacific Islands and SE Asia).

WHO AM I?
ASIA PACIFIC
INDIA
SAUDI
ARABIA
AUSTRALIA &
PACIFIC
ISLANDS
A strategic and performance-focused
executive with more than 25 years of
leadership in Asia, the Middle East,
South Pacific and Australia.
Expertise lies in leveraging global
resources, capabilities and
relationships to gain advantage in
growing brands in new countries.

WHO AM I?
Whether your business is a small business wanting to grow into
new territories, you want to franchise or you want to move
globally, Expand Your Brand will provide you guidance and
valuable tips on how a business can benefit, avoid the pitfalls
and fast track to expanding the brand.

July
1998
ARE MALLS REALLY DYING?
“The retail guys are going to go out of
business, and e-commerce will become the
place everyone buys”
– Marc Andreessen, American entrepreneur,
investor and software engineer

THE GROWTH IN E-COMMERCE
2014 2015 2016 2017 2018 2019
China 12.4% 15.9% 19.6% 23.8% 28.6% 33.6%
S. Korea 10.3% 11.2% 12.1% 13.0% 13.9% 14.7%
Japan 5.9% 6.7% 7.5% 8.2% 9.0% 9.7%
Australia 5.6% 5.9% 6.3% 6.6% 6.9% 7.2%
India 0.8% 1.7% 2.6% 3.6% 4.4% 4.8%
Indonesia 0.8% 1.4% 2.2% 3.1% 3.9% 4.4%
Other 3.0% 3.2% 3.4% 3.4% 3.7% 3.8%
Asia-
Pacific
8.2% 10.2% 12.4% 14.9% 17.6% 20.4%
Worldwid
e
6.3% 7.4% 8.6% 9.9% 11.4% 12.8%
Note: includes products and services ordered online via any device, excludes travel and event tickets.
Excludes Hong Kong
Source: eMarketer Dec. 2015
Retail Ecommerce Sales as a Percent of Total Retail Sales in Select countries
in Asia-Pacific and worldwide, 2014-2019
For the first time, the Asia-
Pacific region not only has the
largest digital retail
market in the world,
but its share of global
digital retail spend holds an
outright majority of the world
market.

Alibaba, the
most valuable
retailer, has no
inventory
Uber, the
world’s largest
taxi company
owns no fleet
AirBnb, the largest
accommodation
provider owns no
real estate
Facebook, the most
popular media owner
creates no content
THE INTERNET IS CREATING PROFITABLE BUSINESSES

MOBILE SPEED CONTINUES TO GROW
5G mobile broadband, set to
launch in 2020, will unleash
speeds that are faster than 4G and
create waves of innovation that
will disrupt every industry.

STORES WITH OMNICHANNEL STRATEGIES WILL
THRIVE
According to the International Council of Shopping
Centers (ICSC) over 198 million shoppers still visited a
brick-and-mortar location between November 1 and
Dec 25, 2015, despite the 13% growth in online sales
during that period.

MULTI CHANNEL, OMNICHANNEL – NOW SOCIAL…..?
Facebook and Twitter’s “Buy” buttons and Instagram’s “Like2Buy” is now creating avenues of
shopping through social media.
© 2016 Expand Your Brand Source: Joe Skorupa, Retail trends and predictions for 2015

The need to provide seamless online to
in-store experiences continues to grow.
Birchbox’s Soho location offers hair,
makeup and nail services in its store.
Urban Outfitters New York City branch
has an on-site salon and coffee shop, in
a move to turn the location into a
destination, rather than just a store.
MORE ECOMMERCE SITES ARE SETTING UP OFFLINE
© 2016 Expand Your Brand Source: Joe Skorupa, Retail trends and predictions for 2015

Aimed at the ultimate consumer convenience, none actually makes food but connects
restaurants and customers.
TECH-DRIVEN DELIVERY IS CHANGING THE F&B
INDUSTRY

IN-STORE VS ONLINE STATISTICS - USA
78% of customers prefer
to shop in-store
Consumers purchase at
online retail websites
an average of 2.2 times
per month.
Average time
spent at a brick-
and-mortar store
54 minutes 38 minutes
Average time
spent on a single
retail website
Consumers spend
significantly more per
month in a physical store
than online
$1,710
$247
73% want to try on or touch
merchandise before they
purchase
Source: ICSC, Shop Visible© 2016 Expand Your Brand

BRICK-AND-MORTAR STORES ARE STILL BEING
VISITED
48% 37% 35%
Of consumers have
ordered online and
picked up their
purchase in-store
Of use the internet
to locate or
research items, but
prefer to make
purchases in-store
Of consumers have
ordered online and
returned their
purchase in-store

1 in 20 consumers make
a purchase after
browsing an online store
1 in 5 consumers make
a purchase after
browsing a physical store
CONSUMERS BROWSING ONLINE VS IN-STORE

The retail landscape is globalizing and
digitizing, and customers are
increasingly demanding and in
complete control of their shopping
destiny.
So how do you stay meaningful while
everything around you is changing?
A shift in thinking.
MALLS MUST CHANGE

CONSIDER NEW TECHNOLOGIES & CREATE CUSTOMER
ENGAGEMENT
Use Beacon-triggered messages to lure
shoppers into retail stores for snacks and meals

USE NEW TECHNOLOGY TO KEEP A SHOPPER LONGER
ON THE PREMISES
From virtual fitting rooms
to interactive window
displays, merchants are
continuously finding ways
to use Augmented
Reality to draw attention
and improve experiences.

IF YOUR FORMAT DOESN’T WORK, CHANGE IT
Spain’s shopping mall Las Arenas
de Barcelona has been
constructed out of a former
bullring and is a destination in
itself – with views from the roof,
the restaurants and a rock
museum inside, in addition to
the regular retail therapy.
LAS ARENAS DE BARCELONA, SPAIN

CREATE A DESTINATION,
NOT A MALL
Westfield Old Orchard in Chicago has
demolished its food court and replaced it
with a single outlet called Wilde &
Greene, incorporating a grocer,
supermarket, restaurants and bar.
WESTFIELD OLD ORCHARD, CHICAGO

Provides consumers with lifestyle recommendations
from both cultural and technological perspectives.
The store offers concierge services, with every
section helmed by an expert in a particular field.
The travel section’s concierge desk books holidays
and is headed by a former journalist who has
visited more than 100 countries and written several
guidebooks.
CULTURE CONVENIENCE CLUB, JAPAN
CREATE A DESTINATION, NOT A MALL

CURATE SHOPPERS LIFESTYLES WITH EXPERIENCES
Restaurants can provide
unique social experiences
that consumers can't enjoy
by clicking "buy" on their
smartphones.
DEVIL ISLAND PRISON RESTAURANT, CHINA
& A380 FLIGHT RESTAURANT, TAIWAN

Evoke consumer emotions
instead of offering ease of
purchase. Let online be
‘convenience’ and ‘fast’.
EVOKE SHOPPERS EMOTIONS THAN CONVENIENCE
VOGUE CAFÉ, DUBAI &
FRAGRANCE BAR, ITALY

At their Experience
Center in Atlanta, Porsche
teams an auto showroom
with an upscale
restaurant called 365.
It looks onto a driver
development track.
EVOKE SHOPPERS EMOTIONS THAN CONVENIENCE
PORSCHE, ATLANTA

A hybrid concept between a lingerie store
and an automated store/vending machine.
Customers select their lingerie products on
large touchscreens/tablets and receive them
via transparent aero-propelled tubes.
UNDIZ MACHINE, FRANCE
CREATE EXPERIENCES YOU
CAN’T FIND ONLINE

Besides great shopping,
Westfield London
boasts a phenomenally
successful champagne
bar, a Flight Simulator
and an upmarket
teeth-whitening kiosk.
CREATE EXPERIENCES YOU CAN’T FIND ONLINE
WESTFIELD LONDON

ADVANTAGES QSR HAVE IN MALLS
1. Most QSR brands want to scale their
brands – and do this fast
2. Building permits and approvals are easier
to obtain with malls and shopping centers
3. Foot traffic is higher in malls
4. Malls provide easy access to utilities
5. Quick and fast set up of the project

The big question is this;
is the future of the shopping center
actually not about shopping at all?
Perhaps it’s a place you go to meet friends,
dine and be entertained in a myriad of ways,
and shopping is an adjunct, not the purpose of
the visit.
THE FUTURE OF THE MALL
IS NOT SHOPPING

Whatever happens, the retail center, like
retail itself, will be transformed in the next
few years.
It is time for malls to spice up their
relationship with customers.
We do not have to kiss the malls goodbye.
WE CAN STOP THE MALLS
FROM DYING

Always ask yourself if your
efforts are truly providing a more
enjoyable experience for your
customers.
Stick with that strategy, and
you’ll be just fine in the future.
CUSTOMER EXPERIENCE MATTERS

THANK YOU
www.merrillpereyra.com

Are Retail Malls Dying?

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