THE IMPACT OF INFORMATION
TECHNOLOGY ON RETAIL PROPERTY
IN MALAYSIA
MUHAMMAD NAJIB RAZALI (mnajibmr@utm.my)
Universiti Teknologi Malaysia (UTM)
Yasmin Mohd. Adnan
Universiti Malaya
Mohd. Nazali Noor
Liverpool John Moores University
INSPIRING CREATIVE AND INNOVATIVE MINDS
Introduction
• Information technology is becoming a major form of
communication, marketing and information dispersion tool in
a business.
• Gives wide coverage to reach potential client, better and
quick information gathering and probably the cheapest way
to sell the products.
• E- commerce is one of the tools in information technology
and it is believe it able improve the retail sales
INSPIRING CREATIVE AND INNOVATIVE MINDS
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•
•
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While some analyst predict a negative impact on retail sales due to the
Internet, others argue that the Internet has no real future and that physical
space will continue to attract shoppers (Worzala et al. 2002).
E-services not only overcome previously conceived limitations of service
marketing, it creates hitherto of opportunities for the marketers (Rahman,
2004).
Internet simply a reallocation from other consumer spending or a
siphoning off of some of the disposable income that would be going to
mall (Kim, 2002)
But essentially deterministic terms, the argument went, if ICT pervaded,
productivity would increase and space requirements would reduce,
thereby reducing the demand for real estate (Dixon and Marston, 2005)
INSPIRING CREATIVE AND INNOVATIVE MINDS
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•
•
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Over the period of 2007 to 2009, the total commercial property
transaction value in Malaysia recorded a positive growth despite
the global financial crisis (JLL, 2010).
Malaysia came in second place in term of retail property transaction
worth of US$1 billion (RCA,2010).
Retail market in Malaysia also showed an average performance in
2009 although hit by global financial crisis in 2007/2008 (RCA,
2010).
Rapid growth of economy in Malaysia has also resulted in higher
internet penetration. Malaysia listed as one of the top 10 highest
internet penetration in Asia and ranked at no. 57 in term of global
internet penetration (Internet World Statistic)
INSPIRING CREATIVE AND INNOVATIVE MINDS
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•
•
•
•
•
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Dixon (2005) and Dixon and Marston (2005) discussed on the impact of information
technology on real estate in the new economics specifically using e-commerce
among shopping centres in the UK.
Kim (2002) surveyed in the US market.
Worzala et al. (2002) explore on E-commerce on retail property in the UK and US.
Dennis et al. (2007) discussed on the major issue in the economic and social effect
of e-commerce on consumers on e-retailing and e-shopping.
Some authors discussed on online shopping such as Bigne-Alcaniz et al. (2008) and
Hand et al. (2009).
The impact of information technology in retail property in certain countries such as
South Africa (McClatchey et al., 2007), UK (Hand et al., 2007) and Spain (Alcanz et
al., 2007).
Littlefield (2000) focusing on internet real estate information on home purchasing.
Methodology
•
The survey was conduct from January 2010 to December 2010 to obtain
information concerning the implementation of IT among retailers in Malaysia and
the impact on retail space specifically in major urban areas in Malaysia.
•
This survey examined the perceptions from retailers of wide key range of key IT
applications issues.
•
Retailers were also asked about their opinion about the requirement space in term
of future retail business in Malaysia.
•
233 major retailers throughout major urban areas in Malaysia participate in this
study (28% of sample respondents).
INSPIRING CREATIVE AND INNOVATIVE MINDS
Respondents’ profile
Results and Discussion
Business activities
Households
Apparel/ accessories
Lifestyle
Multi-product
Food and beverage
Others
Company category
Individual
Corporation
Proprietorship
Franchise
Partnership
Joint venture
Others
Size of workers
5 or less
6-10
11-20
21-30
31-40
41-50
More than 50
Number
% of total respondent
45
34
54
46
54
19.3
14.6
23.2
19.7
23.2
63
32
38
40
29
11
20
27.0
13.7
16.3
17.2
12.4
4.7
8.6
26
42
65
63
12
14
11
11.2
18.0
27.9
27.0
5.2
6.0
4.7
INSPIRING CREATIVE AND INNOVATIVE MINDS
IT Implementation in Business
10%
5%
5%
0%-10%
19%
11%-20%
21%-30%
31%-40%
34%
41%-50%
27%
INSPIRING CREATIVE AND INNOVATIVE MINDS
More than 50%
Applications
1. Hardware
a. Desktop computer
b. Tablet PC
c. Office appliances (e.g. scanners, fax machine, laser printers)
d. Video camera
e. LCD TV
f. Broadcasting system
2. Telecommunication
a. Local Area Network (LAN)
b. Virtual Private Network (VPN)
c. Very Small Aperture Network (VSAT)
d. Intranet
e. Internet
3. Office productivity software
a. Microsoft office
b. Document readers
c. Web browser
d. Statistical package
e. Graphic editors
f. Special inventory software
4. Electronic applications
a. Inventory stock control (e.g. RFID, Barcode system).
b. Enterprise resource planning
c. Clock-in system
d. E-mail system
e. Other applications
f. Electronic catalogue
g. Business transactions
% responding “Yes”
IT application among retailers in
INSPIRING CREATIVE AND INNOVATIVE MINDS
100
62
Malaysia
100
32
67
23
5
0
0
53
100
100
100
100
72
75
53
82
12
100
100
54
72
75
Perception of retailers the growth of ICT
application in retail business
Apparel/Accessories
Lifestyle
Multi-product
Food and beverage
Others
Overall
Mean
SD
Mean
SD
Mean
SD
Mean
SD
Mean
SD
Mean
SD
4.42
0.72
3.65
0.49
4.26
0.62
4.26
0.43
4.69
0.47
4.30
0.63
3.05
0.58
2.38
0.55
2.87
0.89
3.57
0.69
3.15
1.22
3.03
0.97
4.14
0.60
3.85
0.70
3.85
0.67
3.87
0.65
4.00
0.82
3.94
0.70
4.04
0.79
4.41
0.61
3.59
0.59
4.24
0.72
4.11
0.80
4.05
0.77
3.73
0.82
3.56
0.86
4.02
0.66
3.74
0.68
4.04
0.78
3.84
0.76
2.88
0.85
3.29
0.97
3.67
0.69
3.09
0.67
3.31
0.66
3.26
0.83
3.18
0.78
2.82
0.58
3.33
0.82
2.76
0.68
2.83
0.69
3.00
0.78
2.90
0.76
2.50
0.66
3.59
1.04
2.83
0.72
2.59
0.54
2.92
0.88
4.78
0.52
4.47
0.66
4.78
0.32
4.65
0.70
4.50
0.82
4.65
0.70
4.49
0.63
4.24
0.61
4.72
0.39
4.67
0.55
4.17
0.82
4.47
0.70
Security
Maintenance
Trust from
customers
Internet speed
Knowledge
Options
Competition
Law and regulation
Customer fulfilment
Image
Overall
3.76
3.52
3.87
3.77
3.74
INSPIRING CREATIVE AND INNOVATIVE MINDS
3.75
Perceptions for the space requirements in 5 years
Panel A
Apparel/accessories
Lifestyle
Multi-product
Food and beverage
Others
Overall
Panel B
Increase
21%-30%
31%-40%
0-10%
11%-20%
(%)
8.9
(%)
4.4
(%)
13.3
(%)
17.8
11.8
38.9
26.1
25.9
22.3
5.9
22.2
28.3
22.2
16.6
23.5
11.1
34.8
11.1
18.8
4.3
0-10%
11%-20%
21%-30%
Apparel/accessories
Lifestyle
Multi-product
(%)
26.7
20.6
3.7
(%)
28.9
17.6
9.3
(%)
20.6
14.8
Food and beverage
Others
Overall
4.3
11.1
13.3
2.2
22.2
16.0
7.4
14.3
41%-50%
(%)
More than
50%
(%)
(%)
(%)
11.1
13.7
24.1
23.4
19.8
18.4
11.1
Decrease
31%-40%
Overall
41%-50%
(%)
INSPIRING CREATIVE AND INNOVATIVE MINDS
More than
50%
(%)
Overall
(%)
27.8
19.6
9.3
3.3
13.6
14.7
Perceptions of ICT on real estate
space
Panel A
Apparel/accessories
Lifestyle
Multi-product
Food and beverage
Others
Overall
Panel B
Increase
21%-30%
31%-40%
0-10%
11%-20%
(%)
8.9
(%)
4.4
(%)
13.3
(%)
17.8
11.8
38.9
26.1
25.9
22.3
5.9
22.2
28.3
22.2
16.6
23.5
11.1
34.8
11.1
18.8
4.3
0-10%
11%-20%
21%-30%
Apparel/accessories
Lifestyle
Multi-product
(%)
26.7
20.6
3.7
(%)
28.9
17.6
9.3
(%)
20.6
14.8
Food and beverage
Others
Overall
4.3
11.1
13.3
2.2
22.2
16.0
7.4
14.3
41%-50%
(%)
More than
50%
(%)
(%)
(%)
11.1
13.7
24.1
23.4
19.8
18.4
11.1
Decrease
31%-40%
Overall
41%-50%
(%)
INSPIRING CREATIVE AND INNOVATIVE MINDS
More than
50%
(%)
Overall
(%)
27.8
19.6
9.3
3.3
13.6
14.7
Non-parametric tests of the response
ICT related issue by different categories
type of respondents
Retailers characteristics SpaceICT
OppICT
PerfICT
By business activities
Reject
Do not reject Do not reject
By size of workers
Reject
Reject
By company category
Reject
Do not reject Reject
Reject
INSPIRING CREATIVE AND INNOVATIVE MINDS
• The null hypothesis on negative ICT use and real estate space
relationship were rejected for all treatment effects of firms by business
activities, size of workers and company categories.
• There is evidence that companies’ perception that ICT use will not have a
negative impact on real estate space needs differs across sample firms
with different characteristics.
• SpaceICT (ICT use will lead to reduction in office space)
= dependent on business activities factor
• OppICT (ICT could create new opportunities)
= Differ only across companies occupying office of different sizes
•PerfICT (ICT could improve business performance)
= The null hypothesis was not rejected for business activities factor at 5
percent significance level.
Conclusion
This paper seeks to look into the impact of Information Technology (IT) among
retailers in Malaysia in several major shopping complexes in Malaysia.
The findings showed that majority of retailers in Malaysia using almost 40% of IT
application in the business. T
The most popular IT applications and equipment such as desktop, office
appliances, Internet, Microsoft office, document readers and web browsers as well
as clock-in system and e-mail system indicated 100% practice among respondents.
Most of retailers’ also have high confidents the development of IT in retail
business specifically in he measure of security, customer fulfilment, and for image
purpose.
The survey showed that although retail business will hit by online trading in
future, however most of the retailers perceive the space will increase around 0%10% and only 14% of respondents believe the space will decrease about 21% to
30% in 5 years time.
From this research although most of the retailers comfortable with the
IT development and some of the also highly applied in their business, it
is believe in future the space requirement to retail property will increase.
This is due most of the customers are still needs physical shopping
experience. In this new economy era and globalisation world IT play an
important role in business and eventually to the growth of property.
However in Malaysia the theory space requirement will decrease due
to the growth of IT and borderless is not necessarily true.
As retail property form a major growth in urban areas, as such it is
important to study the impact of IT to retail business. The growth of retail
property will accelerate the economic growth in urban areas which also
contributes by the growth of population.
Terima
Kasih