Malaysians may love sales, but the practice squeezes margins for retailers, which prevents them from reinvesting in the business and improving product and service quality, according to an expert panel.
“Customer service suffers because businesses don’t have the means to invest in themselves. What this means is that Malaysian checkout staff are less well-paid and probably do a worse job,” retail consultant Michael Hawkins said during a discussion on the way forward for Malaysian malls.
The panel last Friday was the first under the Economic Transformation Programme’s “Industry Speaks” banner organised by the Performance Management and Delivery Unit, which aims to create dialogue between leaders and experts within a particular sector.
“Even though the customer gets cheap prices now, he is worse off in the long term. That is the unintended consequence (of relying on sales).
“Unfortunately, we educate every generation that chasing after cheap products is right,” Hawkins added.
Panellist Benjamin Yong, restaurateur and founder of the BIG Group, recalled this saying from his father: “Cheap thing no good, good thing no cheap.”
“Malaysia has two official sales during the year but, really, it’s like six,” he said.
To Pavilion Kuala Lumpur’s director of marketing Kung Suan Ai, customers should be conditioned to come for the experience and not endless promotions.
“These days, we are in the business of building experiences. For some ladies, I’m sure the mall is their first home,” she said.
Tetap Tiara executive director Charles Wong agreed, saying: “The next step is to differentiate the experience.”
But Yong stressed that a mall must be fastidious and not forget the little details.
“You can’t just build a mall and expect it to fill up. The fundamentals – a good carpark, easy access to toilets – should not be overlooked just because they don’t generate revenue.
“Always put yourself in the customer’s shoes. If you don’t like the carpark, how do you expect your customers to?”
Putting the customer first is vital, Yong added, because “once you lose them, they don’t come back no matter the platform”.
According to Tetap Tiara’s Wong, who is leading the development of Jaya One in Petaling Jaya, anyone who wants to set up a mall has to first understand which lifecycle of the market they want to serve.
This is how Jaya One conceptualised “The School”, a four-level, 190,000 sq ft learning enrichment mall targeted at mothers and children that will complement the mixed development in Section 13.
Similarly, Kung emphasised that it was important for a mall to know its audience.
Pavilion, for example, though located in the heart of the Bukit Bintang-KLCC shopping district, derives 70% of its business from locals and only 30% from tourists, which guides the kind of marketing it has to do, she said.
Yong concurred that Malaysia, which has a retail sq ft per capita comparable to Singapore, was to some degree “malled out”.
“There have been quite a few casualties, for instance the earlier shopping centres in KL. Malls need to continue to reinvent themselves and figure out what customers want.”