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According to Capital Land Burgis Junction is the funky modern mall of the Singapore, opened in 1995 by Japanese company Parco. The mall includes both indoor department store and open-air shopping street. This open-air shopping street is made up of the glass roof, and it does give the experience of street shopping in the air-cooled aisle, saving the customer from the hot and sunny weather. Burgis is famous for its combination of Burgis mall and Burgis street, Burgis street actually gives the look of the traditional colonial history of Singapore. (CapitaLand 2017)
Burgis junction is the one-stop destination for all age customers whether it be a teenage, or corporate person, tourist, local people to relax, eat or shop. Burgis junction has a luxurious brand store, local designer’s shop’s costume accessories outlet for the fashion setters with a premium price, another part of junction includes a street shop with low cost with lots of varieties of food outlets and a special food court connected with a five-star hotel.
Retail trade industry of the Singapore in 2013 was 42.3million dollars and was moving in uptrend due to its urban population Singapore is the only country where all the population is urban with per capita income of 70k approx.(Tan 2017)
Due to the heavy spending power of its customer retail industry was growing at increasing rate but due to various factor, its growth has slowed down. The main reason being the E-Commerce, weak retail spending, rising business costs and a shortage of employees is leading to sluggishness in the retail market. According to Savills world research Singapore The recent Paypal survey predicted 42.2% year on year surge in Singapore mobile shopping.(savills 2017)
As per Inside Retail 2015 the life cycle of the Retail industry of Singapore is at the declining phase as customers have started moving more to the online shopping rather than physical shopping. 22% of the Singapore population is of the millennials, Millennials are the people who are born between1980 to 2000, this population is the most demanding generation this generation has a high level of expectation with the desire of having everything customized with ease of use. Reason being the upbringing of this generation in the increasing technology phase these people are more technology savvy. The population of the Singapore has the highest rate of technology friendly people in all over Asia. They prefer e-store browsing of the brand and want an ease of getting things delivered at their footstep without consuming more time. (Kua 2015)
The demand of industry is based on many factors like the disposable income of the population, a number of tourists, per capita income, demographic factors etc. According to Savills world research Singapore The retail industry is highly sensitive to macroeconomic factors it is facing sluggish demand due to increasing trend of E-Commerce, low employment rate. The overall retail demand declined by 4.4% year on year. Due to sluggish demand retailers are cautiously revising their business plan as per the recent figures although footfall of the customers has increased by 7.7% sales were unable to rise at the required growth rate. (Savills world research Singapore 2017)
PESTEL analysis is the tool to judge the macro environment, based on the same required strategies are formed for the effective working of the organization it is an acronym for the Political, Economic, Social, Technology, Environment and Legal this analysis gives the detailed analysis where the organization is to be flourished. (PESTEL Analysis 2017)
2.2.1 Political Analysis:
According to PESTEL Analysis Singapore is the country with no political and economic risk, as per the PERC Singapore is the country with lowest political risk in the continent, it is one of the most peaceful countries with a good standard of living and is the best place for doing business. (PESTEL Analysis 2017)
2.2.2 Economic:
Singapore’s economy is the free economy and it is developing as very fast pace, with corruption free environment. As per Department of statistics Singapore according to the World Bank report of ease of doing business Singapore has ranked 2nd in the same. The biggest problem lies in the labor shortage, rising labor cost.it is the country with highest per capita income in ASEAN countries with 70k, and thus people have the strong purchasing power. (Department of statistics Singapore 2017)
2.2.3 Social:
PESTEL Analysis Singapore has 22% of the population of the millennial. Millennial are the people born between (1980- 2000) they are very much technology savvy and are much busy in their work so they prefer e-shopping. This young population want to spend less time on shopping and want their product to be delivered at their doorstep. (PESTEL Analysis n.d.)
2.2.4 Technology:
Technological development in the Singapore is rising at very increasing rate, people in Singapore are technological savvy they want their work to be done at a click model of sopping, payment, working everything is changing even the government is adopting the same and moving to the E-government era increasing technological development leads to reduction in time and cost of doing business which attracted many multinational company to have their regional headquarters in Singapore.
2.2.5 Legal:
The government of Singapore believes that for smooth functioning there should be a transparent legal system, and the country does have very effective legislative policies. Which can be bet proved by the World Bank report of ease of doing business in which Singapore is ranked second. A country with the increasing technological development has various E-Commerce laws, the country keeps updating its bye-laws in order to ensure proper development of the country.
2.2.6 Environment:
As Singapore is a large concrete jungle, the country faces the problem of heavy pollution, although the ministry of environment is working strongly for maintaining the air quality in the country, Singaporeans also face the problem of shortage of water and is depended on the Malaysian water supply. After the analysis, it can be judged out that Singapore is one of the best countries for business, companies doing business here has to be very competitive to meet the needs of the most demanding generation called millennial which accounts for the maximum percentage of the population.
Porter’s five forces model is the strategy to understand the strategic environment of the business (Inditsyet.al 2014:75).
The threat of new entrant is moderate in 2013- 2014 maximum numbers of malls started, but due to recession companies faced low sales, although it is expected that many malls are about to influx in 2018 -2019, still in the small country of Singapore creating a space for the mall is a very difficult task.
Sales of the mall are decreasing due to increasing focus towards e-shopping by the Singapore population, and the results of the same can be sen on the decreasing sales of the mall’s companies need to concentrate on the competitive advantage as online shopping cannot give the extraordinary physical experience which malls can create.
Singapore retail industry is very crowded as the country is already having 103 malls which means one for every 53 thousand people living in the Singapore. In order to sustain malls need to create differentiation.
Bargaining power of supplier is a power of supplier to control the market in terms of price, this can happen when a number of suppliers low and the material supplied them is also rare, this will empower the supplier and will lead to their dominance. In the case of Burgis junction, there are various suppliers as it is a one-stop destination for many goods, so the power lies in the hand of the mall management not in the hand of suppliers.
Bargaining power of customer is an impact of customer on the industry, As retail market is oligopolistic market high prices exploit the market, people with lower income suffers from it, but as Burgis Junction is divided into two types of market, one is street shopping where barraging power is high and on another side place like brand stores food outlets etc. there the prices are fixed customers cannot bargain, just some seasonal sales are always announced by the marketer.
The core competency of the Burgis junction is its location and its connectivity to Burgis MRT station and is situated in the heart of Singapore with close proximity to Singapore Management University, Lassalle Art College. The another competency is mall is created for all the age group and all the classes of people middle or upper middle with shopping and dining option of both cheap and luxury.it gives the colonial shopping feeling with advanced ambiance.
Mall has loads of tangible and intangible offering, tangible offerings include products fromthe brand outlets or shopping streets or food courts, and intangible service includes its differentiated services (Durvasula and Lysonki 2010).
This analysis helps in understanding the strength weakness opportunity and the threat of the organization which helps in making an appropriate strategy (Sarsby 2016).
|
Strength · Location of the Burgis Junction mall · Close proximity to colleges · One stop destination for shop, eat, relax |
Weakness · Shortage of Employees. · No option for recreation or adventure sports facilities |
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Opportunity · Wide customer segment targeted · Attraction point for tourist as shopping streets on the historical colonial concept. · Option available for both luxury brand shopping and street shipping |
Threat · Increasing behavior of E-shopping in the Population · Heavy crowd of Malls in the country · Mall culture is in declining phase |
Burgis Junction should think of adding some technological up gradation and should think of adding some recreational facility which is different from others, it can offer some nature-related green ambiance which can help Singaporeans to relax in that artificially created natural atmosphere as the country is facing a serious problem of air pollution.
The main strategic options available for any retail industry are Market Penetration, Market expansion, Retail Format development and Diversification
Market penetration growth strategy is the lowest strategy with the lowest risk as the marketer have full knowledge of market and customer needs and the retailer is quite acquainted with the market, goal of this strategy is to increase the market share, attract customer for more usage to attract for example if customers are more engaged in online shopping giving some discount coupon for inviting in store, and attracting them for impulsive shopping by strategic merchandise display, or desiring penetration through Increasing time hours of the mall Or training salesperson for other department selling or cross-selling through some attractive offers. In terms of Burgis Junction mall management can offer some attractive discount coupon for food outlet on shopping from Burgi’s street or Burgi’s brand stores.
Retail format development offers new retail mix to the same customer base, this type of strategy requires lots of research in order to understand the untapped needs of customer and then using that untapped or unmet need as an opportunity which retailer develop it as new format, for example online retail format, in order to grab the tech-savvy customers. The most important point retailer need to remember is to understand the flow in which customers are moving currently. This will give the retailer an idea about the current requirement of the market.
Burgis Junction should go for different type of market penetration strategy, for which mall can create attraction through some on visit discount vouchers, which will increase footfall. Mall management can think of starting some activities which can enhance people interaction and a hangout or relax time at the weekends. Boon (2007) advice retailers to “adapt to the new retail environment by developing strategies that will enhance a customer’s shopping experience through better customer service and upgrading the skills (through training) of frontline workers who serve Diagnosing service quality in retailing 3 customers. He maintains that retailers must give customers a unique, delightful and unforgettable shopping experience while making sure that retail workers are well-trained in understanding customer needs and can give impeccable service. Indeed, retailing is not just about providing the right mix of products; it also deals with giving customers ‘wow’ experiences that they will remember and cherish”…..(Durvasala and Lysonki 2010).
Overall Conclusion
Through strategic analysis, it can be judged out that mall culture in Singapore is in declining phase due to the oversupply of malls in the country and another reason is increasing trend of online shopping. According to Asiaone People don’t prefer going to shopping space physically, as a result footfalls and sales both are declining. Management needs to concentrate on bringing in more competitive advantage and bring some innovation in order to attract more people in the mall although Burgis junction has lots of options for each category of people like street shopping, brand shopping, corporate dining, daily dine food outlets like KFC, Dominos etc. but still in order to increase footfall retailer need to put extra efforts (Asiaone 2017).
References
Asiaone 2017, ‘Singapore malls are dead, as occupancy reaches its lowest level in 10 years’,. Viewed on 21 September 2017, from https://www.asiaone.com/business/its-official-singapore-malls-are-dead-occupancy-reaches-its-lowest-level-10-years
CapitalLand 2017, ‘Mallinfo’, Viewed on 20 September 2017 https://www.capitaland.com/sg/malls/bugisjunction/en/concierge/mall-info.html
Department of statistics Singapore 2017, ‘Singapore in Figures’, Viewed on 21 September 2017 https://www.singstat.gov.sg/docs/default-source/default-document-library/publications/publications_and_papers/reference/sif2017.pdf
Durvasula, S. and Lysonki, S., 2010, ‘Diagnosing service quality in retailing-the case of Singapore’, International business and entrepreneurship development 5(1) 1-17.
Inditsy, M. C, Mwangi. S.M, Mandere, N,E. Bichanga, J,M. and George, G,E., 2014 ‘The application of porter’s five forces model on organization performance- a case of cooperative bank of Kenya ltd’, European journal of business and management, 6(16),
Kua, T., 2015, ‘Customer Service in Retail Revolution’, Viewed on 21 September 2017, from https://insideretail.sg/2015/10/14/customer-service-in-the-retail-revolution/
Tan, A., 2015, ‘Gaining insight on the challenges for Singapore’s retail sector’, Viewed on 21 September 2017 from https://kfcontent.blob.core.windows.net/research/797/documents/en/challenges-for-sgs-retail-sector-2804.pdf
PESTEL Analysis., 2017., ‘PESTEL Analysis of Singapore’, Viewed on 20 September 2017 from https://pestleanalysis.com/pestle-analysis-of-singapore/
Sarsby, A., 2016, Swot analysis, Spectaris ltd, U.K
Savills world research Singapore 2017, ‘Briefing of Singapore Retailing’, Viewed on 20 September 2017 from https://pdf.savills.asia/asia-pacific-research/singapore-research/singapore-retail/singapore-retail-briefing-q1-2017.pdf
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