“Can Tenants and Landlords Ever Win Together?” with Lim Ming Yan | Episode 1

Aimazing is pleased to have Mr Lim Ming Yan, the current chairman of the Singapore Business Federation, as our esteemed guest in this episode of The Future of Retail Asia. Mr Lim has deep-rooted insights into the retail industry following his 22-year tenure in CapitaLand where he also served as president and group CEO.

Mr Lim’s rich expertise in the field brings about relevant talking points to the table such as creating win-win solutions for both mall tenants and landlords using data-driven approaches and the challenges associated with implementing these solutions in an offline space.

Is data transparency the main solution to drive data collection in malls? What are the key data-related issues facing the offline market that the online market is spared from? Can shopping malls ever fully embrace data collection and use?

These are some of the main questions that The Future of Retail Asia will cover in this exciting and revealing episode.

The Future of Retail Asia, is now streaming on Spotify, Apple Podcasts, and Google Podcasts. View the video and full transcript below. Enjoy!

Episode 1: “Can Tenants and Landlords Ever Win Together?” with Lim Ming Yan

-- Start transcript--

IMRAN: Today we have Mr. Lim Ming Yan. He is the chairman of the Singapore Business Federation, and before this he was actually previously with CapitaLand Limited for 22 years, his last position being president and group CEO from 2013 to 2018. Ming Yan, thank you for being with us.

MING YAN: Thank you.

IMRAN: So I think Jun, over to you for the first question

JUN: Yeah, I think once again, right, it's our pleasure to have Ming Yan with us today. So I think as Imran mentioned earlier about you, you spent about twenty-two years in one of Asia's biggest landlords, and now you are in the SBF, the Singapore business Federation, right? So you have represented both sides, right, the landlord and the enterprise and the merchant. So I think it seems like there's a lot of friction between the tenants and the landlord, they cannot seem to find a common ground, right. So why does this happen?

MING YAN: Okay, I think first of all, I just want to mention that it is not quite true that there's a lot of friction within the group, there is some tension, no doubt, because you're always on different sides of the negotiating table. But at the end, when you look at it carefully, both landlords and retailers must come together, they must come together in order to create the whole retail ecosystem, to basically allow the marketplace to be thriving, to allow the retailers to be able to sell more, and to be able to attract the customers into the retail mall. So I think there's a very symbiotic kind of relationship between landlords and tenants. So the tension is, in a way, inevitable because you are always negotiating with each other about what is the right and fair arrangement between the both parties. And at the end of the day, many of the marketplaces are decided by the market forces. But it's always useful for both parties to come together and talk, and to better understand each other. And this is already happening, I think. At the SBF, we have promoted what we call the Fair Tenancy Framework and this was set up only very recently to essentially get landlords as well as retailers to come together. And by having a platform to communicate with each other to also decide what is the right code of conduct within that framework. So having done that, I think now, I see a lot more of a collaboration between landlords as well as tenants. And in the current environment, I think with the pandemic, with COVID-19, I think, people and obviously businesses are affected. And I see now both landlords and tenants coming together to help each other to overcome the adversity that we are facing at this point in time. Without that communication platform it is actually very hard for it to happen. So I'm pleased that it's already happening. Yeah,

IMRAN: Thanks for sharing. So you shared about the Fair Tenancy Act, you actually shared about this symbiotic relationship right between the tenant and the landlord, that we cannot live without each other. So to what extent can this mediation affect the Fair Tenancy agreement? As part of this agreement, if I'm not wrong, data transparency is one of the key elements to building a bridge of trust. Do these solve the problems that we're facing today?

MING YAN: I think it does, I think it's very important that when we make decisions, we make decisions based on data. This is what we call a data driven approach to decision making. And obviously in order to have that data transparency between landlords as well as tenants, both parties must get together and be prepared to share data. I think the format in which these will be shared can always be discussed so that from a business angle, there's no confidential business information that will be leaked out, and it doesn't affect competitiveness, but at the same time, it allows effective data-driven decision making and discussions. So it's important because if businesses are affected for example by COVID, you want to know that to what extent has been affected and to what extent landlords will be able to step in to help, and even to some extent, for the government to think about how they can support some of these businesses tide over a very unusual situation. So these are the kinds of information that we are looking at to allow both parties to base their discussions and negotiations on the reality on the ground rather than based on perceptions of individuals or on anecdotal evidence.

JUN: But from us, right, I think when we look online today, I think the online platforms can grow so fast when they sell things on Lazada, Shopee, or Amazon, right? These platforms are able to get all the traffic data and use this data to actually help the merchant to grow their sales, right? But when we look at physical retail, especially shopping malls, we keep hearing about mall management teams facing some issue in getting the data from the tenants. So just I think earlier we mentioned trust, will data transparency be able to help solve this problem?

MING YAN: I think there are two issues here. One is that collecting data in the physical environment is generally more difficult, unlike on the online platform. In fact, if you look at a typical shopping mall you could be talking about 400-500 different retailers, and each one of them could have 10 different points of sales. So collating all this into a usable data format is actually not so easy in the physical space, whereas online, you may have a million different retailers, but all the transactions could be aggregated in the flesh of a second because of the computing power that we now have access to. So there is a difference between collection of data in the physical space versus the collection of data in the online space. So that's number one. Number two, of course, traditionally, I think most merchants and retailers are still not used to the idea that they should share some of the information with a landlord who is supposedly on the other side of the table. Right. But really, I think at the end of the day it's a question of how the data is going to be used. If the data is going to be used to promote the marketplace to make it a more viable market place, make it a thriving marketplace, it's going to be for the benefit of all the retailers within that space.

IMRAN: Yeah, I think it's very interesting that you've talked about that, right? Because I think it does seem that this data transparency may seem to be a bit of a stick rather than a carrot, like all the legislation or forces, or rather something other than market forces forcing me to share data. And people kind of feel like I'm losing out, right. But I think it's an interesting point that if we could actually use this data, not as a compliance tool, but to actually grow the whole market, the whole ecosystem, I think that's a very interesting point. The other point that you brought up is about making decisions with data, right? How do we collect data physically? I think that seems to be the challenge that has been holding back this uptake of data use over the physical space.

MING YAN: Yes, this is definitely one practical issue to solve on the ground, because you have so many points of sales out there and each one of them has got a different format, and they may use different systems. And some of these are maybe, compared to the current generation, maybe 10 generations older than the current generations. So some of these things are not easy to manage, especially when you have different formats coming in from the different points of sales.

IMRAN: There was a point you mentioned earlier, right? Like, whether I trust my data will be used to evoke a positive effect, right, rather than used against me? And I think there's quite an interesting contradiction or contrast right now where if I'm a merchant, both physically and online, I will probably be sharing all my transactional data with one of the ecommerce marketplaces. But I would never share it with my landlord. So it's quite an interesting contrast, isn't it? What do we make of this? And how can we change it?

MING YAN: I think it is. It's a bit of a mindset that, in the past, because of practical difficulties of collecting data from the physical space, we don't collect it, and certainly not on a timely and real-time basis. But when we started the online trading, and everybody's already online, and the data has already been collected from day one, people just get used to it. So it's a matter of, I suppose, an issue of the various traders and merchants getting used to some of these things, and sharing of data. I think what is important is that, actually this data, if we take one step back, for the retailer the data is important for them to make an assessment as to how they can actually optimise the performance of their stores, the different stores that they have, and different outlets. And if they can couple that with a better understanding of their customers, for example, through a loyalty programme, that will be even more powerful. That will allow them to then look across the whole network of their stores to see how they can switch or adjust the merchandise mix in order to better cater to their respective cash catchment. So as a network, they can actually be a lot more effective. So from the retailer's perspective, actually, there are many things that they can do with the data. So that is one aspect of it. The other aspect of it, if you take one step back and then look at it from the landlords' perspective, actually landlords similarly, they want the shopping mall to do well, right, there are many tenants within the shopping mall. How do the different tenants sort of interact with each other to create a better social and physical experience for the customers? This is important to the landlord in order for the malls to thrive. I mean, it's difficult for individual tenants to do certain activities at the shopping mall level, but for the landlord to do it, it actually is only natural. So they will have to do it. So when they do some of these activities, knowing the customers and knowing how the customers will respond to each of these marketing activities will in fact be very helpful for the landlord to come up with even more effective promotions or marketing campaigns in the future. So when you put all these things together, actually to the landlord, it is something that is useful, to the retailer, it is also something that is useful. So if you put the two together, in fact you can now look at it and decide whether we will be in a much better position to create what I would call a thriving retail ecosystem.

JUN: Ming Yan, you brought up some of these loyalty programs, right. So I think just now you also mentioned online data because when people go online, they are already used to it. So they share it by default, they will share the data with the platform, right. But offline, because when things started it was very...

MING YAN: They never started with sharing.

JUN: Yes.

MING YAN: So that's why it becomes a sort of practice not to share. And then when there are certain requests for sharing, they get very uncomfortable, understandably. So I think the issue now is that, how do we move forward from where we are today? It is really important to think about building trust between multiple parties, between landlords and tenants, between tenants and customers. And then the customers must, at the same time, also trust the malls. Yes, right. So at the end of the day, are these three different groups of people getting together, trusting that whatever data is collected will be anonymized and will be used in a very responsible manner?

IMRAN: Essentially a retail tripartite?

MING YAN: Or should it be a unit of three to be comfortable, to trust that the system can work.

JUN: So yeah, I think it seems like actually the loyalty programme inside of malls will be like, they will build a trust between the three different parties and then also actually help the landlord and help the merchant provide a good user experience for the customer.

MING YAN: From the retailer perspective, some understanding of their customers will allow them to personalise some of the services or products or know certain things that they can do when they know that the customer has certain preferences. When they step into the store, they will know how they can actually better service this particular customer that comes in. So I think that's from the retailer's perspective. I think from the landlords' perspective, you will want a tenant mix that will be responsive to these particular customers or your target audience. Knowing who your customers are will allow you to then think about how you could curate a better tenant mix that can cater to this target audience. You may say that "Oh, if you curate a better dynamic that means you've got to give out some retailers and then you bring in other retailers". I think from that perspective, it is not necessary. It is a difficult thing sometimes. But if the tenant mix is such that they have a need for certain types of tenants, for example, you need a certain mix of F&B or certain types of food, then you want to consciously bring some of these in, but then if you are selling something totally different, right, it may not actually appeal to this particular group and being physically located in that particular marketplace may not really help you in terms of your sales. So this is where the data will be helpful, not just to the landlord, but also to the retailer's to think about. Is this the right market that they want to site my store in? So if not, then the data will allow me to better understand this particular catchment, this particular market, then I can make a decision to move somewhere else that better fits my brand profile and retail format.

IMRAN: There's a good point, to actually use that data to understand the profile, to understand the programming, the curation, the assortment that you're providing. And then from a decision making standpoint, on both the retail and the marketplace level, you mentioned loyalty as well, right? And I do understand that during your tenure with CapitaLand, it was quite a big project of yours to push out this loyalty programme, CapitaStar? If I'm correct, if I understand correctly, right. But my question is, is it as important now or even more important, let's say in the context of what's happening today, with the crisis, with all these changes that are happening, where do loyalty programmes stand? Where do we go from here?

MING YAN: I think it is even more important today. If you ask me, the reason really is because with the pandemic, there are a lot of restrictions on the trading in the physical space. So a number of retailers, in fact, we've concluded, I think a lot of people have concluded in the last six months to one year that you need to be both online and offline. Yes. So a number of retailers have accelerated their pivot towards the online offline space. So for the landlord it is a similar situation, they will need to pivot, they will need to allow and facilitate this online offline space. And for the landlord to be able to do that, they really need to understand who their customers are. And I mean, a loyalty programme like CapitaStar will allow the landlord to better understand the profile of the customers that are going into the mall, and with that, they can actually share that information with the retailers. So the whole idea is to share that information and the insights with the retailers and to help the retailers better understand the catchment. And once you understand the catchment, you know the kind of profile of customers will come into your shopping malls, you can adjust your merchandise mix to be more effective. I mean, from the customer's point of view, it meets their requirements better, but at the same time from the retailer's point of view, it means that they can actually sell better. And then, of course, value is created, then, of course, from the shopping mall's perspective, they hope that if the retailers are doing well, they can actually get some share of what we call the GTO. Exactly, yeah. So the most important thing is to create value. If you don't create value, we are actually trying to decide how much to get from a smaller pie. But if we can create that value, we have a bigger pie. We may get a proportionately smaller percentage of the bigger pie, but then in absolute terms it's actually bigger. So I think from that perspective, there is a lot more that you can do with the data to allow all the participants and all the stakeholders in the retail ecosystem to benefit from it.

IMRAN: This is very interesting, because I think in our white paper for Aimazing we actually mentioned it. It's a bit like a game theory model, right? It's like a lot of people are playing lose-lose right now, and they're looking at a smaller pie, as opposed to really changing the paradigm and asking yourself, how can we play to win on all sides? Right. And I think the next question that we wanted to ask was really around what your advice would be for let's say, a retail chain? If let's say a retail chain boss talked to you, "okay, this is the situation now, you're talking about data, you're talking about agreements, Ming Yan, you know, on a practical level, what do I do now?"

MING YAN: First, I'm sure many of them are very knowledgeable in this area as well. In fact, I have spoken to many retail chain bosses and many of them have the data on their fingertips. So they understand, "Okay, this is happening, that is happening". But to what extent do they have that insight or how is the insight derived? Is it based on intuition or based on actual data that has been collected in the physical space as well as the online space? I'm not too sure. But my guess is that if they are making that decision or collecting their insights based on their intuition, then my key suggestion would be that if there's an opportunity for them to collect some of this data, and then get the insights from some of the data, the conclusion may actually surprise them. So it will be worth their while to do so.

IMRAN: Absolutely. Yeah,

JUN: I think the last last question will be then what will be the advice that you give to the mall management, right? Because I think just now you brought up that we need to look into the biggest pie, not the smaller pie. The landlord collecting the data is not just to calculate the GTO, it is actually to really understand what's happening inside a mall, especially when we bring the loyalty programme in. We want to try to understand the customer's spending behaviour, then use the data to actually help the retailer. So then, what would be your advice to the mall management?

MING YAN: I think GTO is only the very first step. I think in the past it was difficult to get all this transaction data. So you have no choice. But when you look at the GTO, you get to see some of these numbers on a monthly basis. That is, of course, short of nothing. That is probably the best we could do. But in today's context, actually, there's a possibility of really understanding, getting the data on a live basis. So you know, even to the extent of hour by hour or minute by minute, how the mall is actually performing on the transactions or activities within the mall. So knowing that, and coupled with the kind of promotions and marketing activities that you are carrying out, it actually gives you a lot of insight as to what the customers will respond to and this will allow you to then adjust your programme, refine it so that it is better catered to your target audience.

IMRAN: So I think we've really come to the end, and we do have one last question. The last question that we ask you and every other guest is, do you think retail will always be king? And why?

MING YAN: I mean, well, the marketplace has always been there all the while. Yeah. And the marketplace is always made out of buyers and sellers. In the old days, it was in the format of your wet market, plazas and all that, but in today's context it's more like a shopping mall. Yeah. And then in the more recent years, it is online shopping malls. And I think going forward, it really will be about a mix of online and offline Omni channels that will be happening in the space. So it will take different forms, but yes, all these transactional activities, people buy and sell in order to generate and to satisfy their own consumption needs will always be there. So we'll just have to make sure that, if you're a retailer, to keep up with what is happening in that space, if you are a mall owner, to always think about how you can make your space a lot more interesting for the consumer.

IMRAN: And I think that that is it. Thank you so much for coming today.

MING YAN: Thank you.

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