Experienced buyers and self-owned brands are considered the most valuable assets for SKP Select－its buyer stores that have closely connected with designers, global buyers and local consumers. With more than 200 designer brands at home and abroad, SKP Select has gathered accessories, apparel and lifestyle products from J.W. Anderson, Maison Margiela and Rick Owens. Relying on relatively low prices and niche brands that do not have their own outlets in China, the mall is able to attract customers and boost revenue.
However, its tight concentration of customers remains a challenge as nine out of 10 are local, with the majority residing in Chaoyang district in eastern Beijing where the mall is located. In 2018, the mall was remodeled, adding dining services to create a luxurious leisure environment.
The mall does not sell online due to the belief that technology should not detract from high-end services, Ji said.
Instead, SKP has combined social sharing, experience and retail to enhance its in-store services. With 74 percent of consumers now saying they would be more loyal to a business that allows them to speak to a person rather than those that rely solely on digital channels, the need for knowledgeable and engaging luxury services will become the new normal, according to the Sybarite report.
Only last month, SKP opened a new outlet SKP-S across the street to the south of the original store, creating a social buzz among local shoppers, particularly the younger generation, which was its aim.
With its futuristic exterior and interior housing brands such as Moncler, Balenciaga and Diesel, SKP-S, which opened on Dec 12, is SKP's attempt to develop an alternative form of the traditional shopping mall. The new addition is a collaboration between South Korean eyewear retailer and brand Gentle Monster and SKP.
Aiming to attract Generation Z consumers with imaginative designs, concept stores and trendy brands at the entrance of the first floor, a herd of AI-enabled sheep showcases the future of farms as part of SKP-S' art experiment space.
On the second floor, a presentation of the history of Mars creates a backdrop for fashion apparel and the third floor, themed Mars Rediscovery, features shoes.
Xie Dan, deputy-general manager of SKP, said the new mall is not a copy of SKP but an innovative destination where the younger generation of consumers can embrace a mix of technology, art and fashion.
"It is not simply about age," said Xie. "It is about the mindset to be bold and creative."
Hankook Kim, founder of eyewear brand Gentle Monster, said the collaboration is a bold innovation toward a new consumption culture and the design of the shopping mall aims to challenge traditional retail spaces with unique imagination.
"The store is about telling a story about the future of luxury consumption and how a successful store should be operated."
How to differentiate the luxury shopping experience from those offered by other global luxury retailers is a challenge for the South Korean eyewear design firm.
"We want people to come here and feel encouraged to try something different or new," said Kim.
In Asia, it is becoming more important for retail to maintain a balance between local, discovery and destination tenants, with spaces such as SKP in China reflecting a more lifestyle-driven approach to shopping, according to the Sybarite report. Guo Zengli, president of the China Shopping Center Development Association of Mall, said SKP-S is a natural extension of SKP and will have a more amplifying effect based on its current customer groups.
The introduction of art space as a new approach to enrich the shopping environment has no doubt improved the experiences of shoppers. On the other hand, it has reduced the efficiency of the shopping space in terms of revenue per square meter.
How to deal with the balance between art display and efficiency of the shopping space in terms of generating revenue has been a major challenge for mall operators.
Huang Dan, a 29-year-old marketing specialist, who has visited SKP-S, said: "The visitors attracted by the art exhibition in the shopping mall are here mostly to take photos and share them on social media. They are not necessarily real shoppers looking to purchase luxury brands in the mall."
Lai Yang, deputy director of Beijing Commerce Economy Association, said mall and department store operators have to take into consideration how to balance their innovation and investment efforts, particularly in terms of cost control in achieving the immersion experience created by the mix of arts, brands and fashion.
