What are the Space Alternatives to malls?
First Published: 2 Jun 2020
Last Updated: 21 Mar 2021
Finding the right space for your needs is not easy! You understand the benefits of Malls but want to look elsewhere – so what are your alternative options to malls?
Setting the Stage - Footfall Making Malls Great
The benefit of locating your business in the malls is the promise of good footfall – In some high traffic malls, footfalls can go as high as 4,000,000 footfall a month. However, this is untrue during this COVID-19 period.
What is footfall?
Footfall — also known as People Counting, Shopper Counting, or traffic — is the measurement of the number of people entering a shop or shopping mall. (Source)
Learn more about the different types of footfall malls have here.
So with an appealing footfall, coupled with an air-conditioned environment, malls strive to provide a good shopping experience. Most malls are also moving towards being an “Experience Mall”, as mentioned by McKinsey & Company. (Source) To survive in the digital age, malls will need to reinvent themselves.
Having said so many good things about doing your business in the malls, some may ask, what about outside of malls? How different is it? Are there any benefits of having my business outside of malls? Where can I look?
What will your Alternative Options to Malls Cost you?
In Singapore, when we mention “outside malls”, we are referring to shophouses in general: be it conservational shophouses, HDB shophouses, coffeeshops etc.
The overall investable amount for a shophouse concept will be a fraction of what you invest in malls.
Here an overview of the breakdown:
- Assuming a restaurant space of 1,500sqft.
- General rental amount: Between S$4,000 to a high of $10,000 per month (Depending on location and frontage)
- Rental Deposit: Minimum will be 2 months and some are 3 months (This can be discussed with the landlord)
- Advance rent: 1 month
- So totaling payments relating to rental: 3 months x say S$6,000 (Average rent)
- Renovation: Between S$10,000 to S$20,000 on the average
So all in all, a good S$38,000 initial investment compared to the S$650,000 investment for a mall’s concept.
The big benefit here is obviously the 15X lesser of an investment for a shophouse concept as compared to entering a mall.
What Challenges awaits outside Malls
However, you will need to address the challenge of creating footfall to your business. As the footfall for shophouses are generally much lesser compared to that of a mall.
Thus, businesses invest tons of money into social media marketing and advertising channels hoping to bring a good flow of fresh customers to their business. We believe the first 3 years of your business is crucial. We call this period the adoption period where businesses strive to increase the conversion of new customers to “Regular customers”.
It is the regular customers that feed a shophouse concept. Without regulars, social media marketing, and marketing campaigns, you will be set for failure.
What's next?
At the end of the day, you will need to know what concept you want, and our team would definitely be able to advise you and point you in the right direction.
Do let us know how we can help you on your journey!
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