DIY or die: Sin­ga­pore’s brick and mor­tars turn to ex­pe­ri­en­tial shop­ping to sur­vive

Some stores on the lion city’s high street al­low for the per­son­al­i­sa­tion of bags, jew­ellery, and ice cream.

Singapore Business Review - - INDUSTRY INSIGHT: RETAIL - San­dra Sendin­gan

As a grow­ing num­ber of es­tab­lish­ments in Sin­ga­pore close up shop after fall­ing to the might of e-com­merce, an­a­lysts are plac­ing their bets that ex­pe­ri­en­tial re­tail is set to give Sin­ga­pore­ans a rea­son to go beyond their on­line shop­ping apps, visit malls again, and breathe life into the strug­gling sec­tor.

“Re­tail­ing has al­ways in­volved the con­stant re­fresh­ing of of­fer­ings and con­cepts to re­tain and grow cus­tomer fol­low­ings,” Huey Ying Tay,

JLL head of re­search & con­sul­tancy told Sin­ga­pore Busi­ness Re­view. “But the rise of e-com­merce gi­ants has brought the com­pe­ti­tion to a whole new play­ing field and re­tail­ers now have to re­learn the art of re­tail­ing and be ever more creative and nim­ble in ex­plor­ing strate­gies to bring foot traf­fic back to the stores.”

The e-com­merce phe­nom­e­non has been rid­ing on the back of Sin­ga­pore’s high mo­bile pen­e­tra­tion rates and ex­pan­sive in­ter­net cov­er­age with on­line sales ex­pected to hit S$10b ($7.4b) within 2017 to 2020, ac­cord­ing to BMI Re­search, as re­tail gi­ants like Lazada, Ama­zon, and Taobao in­creas­ingly knock on Sin­ga­pore as a gate­way to Asia.

For brick and mor­tar re­tail­ers, how­ever, it’s a whole other story. Although va­cancy has nar­rowed slightly to 7.4% QOQ in Q4 from 8.2% after three straight quar­ters of de­cline, re­tail­ers are still tread­ing cau­tiously and hold­ing back ex­pan­sion plans amidst slow­ing sales and and sup­ply risks poised to last up un­til 2019 that have killed off some of the lion city’s best loved brands.

In fact, cloth­ing brand Hang Ten has closed more than a third of its stores in just over a year, just like Raoul who shut down its last store in 2016, as the ex­tinc­tion has not left tra­di­tional shop­ping ar­eas like Or­chard Road un­scathed. Fur­ni­ture and home decor store iwan­nago­home also re­duced its out­lets in Tan­glin Mall and Great World City. For­eign cloth­ing brands Ce­lio and New Look have also been bear­ing the brunt of un­met sales tar­gets as it closed down stores, adding to a grow­ing list of brands brought to its knees by on­line re­tail.

“To com­bat the con­ve­nience and reach of­fered by e-com­merce,

The Shoppes at Ma­rina Bay Sands drew in­spi­ra­tion from a dig­i­tal walk-in wardrobe.

re­tail­ers need to pro­vide con­sumers with com­pelling rea­sons to visit the phys­i­cal stores. One pos­si­ble strat­egy is to of­fer in-store sen­sory ex­pe­ri­ences in­volv­ing the smell, taste, and touch senses, which can­not yet be du­pli­cated via on­line chan­nels,” Tay added.

Per­son­al­i­sa­tion of shop­ping

A cer­tain num­ber of stores have been shift­ing their fo­cus to pro­vid­ing per­son­alised shop­ping ex­pe­ri­ences, which was most ev­i­dent in the lux­ury brands oc­cu­py­ing ION Or­chard, ac­cord­ing to Ong Choon Fah, CEO and head of re­search and con­sult­ing of Ed­mund Tie & Com­pany. Ice cream brand Mag­num, for in­stance, has launched a cam­paign for the per­son­al­i­sa­tion of its ice cream prod­ucts through Aug­mented Re­al­ity us­ing only a smart­phone cam­era which con­sumers can then re­deem at se­lected stores for a dis­counted price.

But nowhere is this trend per­haps more ev­i­dent than in fash­ion where re­tail­ers are giv­ing their users more free­dom to dress and ac­ces­sorise them­selves. Gucci, for ex­am­ple, has also opened a do-it-your­self sec­tion in its ION Or­chard place as it en­ables cus­tomers to per­son­alise their Diony­sus bags with var­i­ous de­sign patches from but­ter­flies, roses, and pe­onies.

Sim­i­larly, the Shoppes at Ma­rina Bay Sands drew in­spi­ra­tion from a dig­i­tal walk-in wardrobe with the launch of the Vir­tual Closet which comes with in­ter­ac­tive dig­i­tal mir­rors in a 360 view as well as a themed pho­to­booth to en­hance the shop­ping ex­pe­ri­ence for the fash­ion­ista. British lux­ury jew­ellery brand Mon­ica Vi­nader is also al­low­ing its cus­tomers to per­son­alise their jew­ellery pieces us­ing a same-day en­grav­ing ser­vice.

The trend to­wards ex­pe­ri­en­tial fash­ion ex­pe­ri­ences has also been pick­ing up else­where in the world, noted Wendy Low, ex­ec­u­tive di­rec­tor and head of re­tail for Knight Frank Sin­ga­pore. Chanel’s beauty fo­cused pop-up con­cept, the Coco Café has launched in Hong Kong where shop­pers could try out a wide ar­ray of beauty prod­ucts whilst en­joy­ing a Parisian din­ner-style set­ting at the same time. Nord­strom also opened a tech-en­abled menswear store in New York where dig­i­tal screens in its tai­lor­ing sec­tion fea­tures an avatar which dis­plays how shop­pers look like when they try on the brand’s cus­tom-made jack­ets.

In Shang­hai, stores like Star­bucks Re­serve Roast­ery and Alibaba’s

Hema have in­creas­ingly lever­aged on Aug­mented Re­al­ity tech­nolo­gies to bring re­tail­ing to a brand new level, noted Ong. “Mem­o­rable, en­gag­ing ex­pe­ri­ences are key. Although on­line shop­ping is con­ve­nient and of­ten more eco­nom­i­cal, most con­sumers will never be con­tent with just sit­ting at home and click­ing on web­pages,” said Col­liers In­ter­na­tional head of re­search for Sin­ga­pore Tri­cia Song.

Tech­nol­ogy is sim­i­larly mak­ing it eas­ier for re­tail­ers to of­fer en­hanced shop­ping ex­pe­ri­ences in Sin­ga­pore as shown when Cold Stor­age opened a cashier­less store at Fu­sio­nop­o­lis fea­tur­ing self-check­outs, smart scales, and elec­tronic new­stands, noted In­ter­na­tional Gro­cery Dis­tri­bu­tion Asia pro­gramme di­rec­tor Shirley Zhu.

NTUC Fair­price has also de­vel­oped a mo­bile app for its Sing­post Cen­tre store al­low­ing shop­pers to nav­i­gate the store and lo­cate prod­ucts more eas­ily, Zhu added.

Click-and-col­lect lounges have also been gain­ing pop­u­lar­ity in the city state, noted Tay, with brands like De­cathlon, Eu Yan Sang, and Uniqlo cre­at­ing spa­ces for the pro­vi­sion of con­ve­nient pick up points for on­line pur­chases as re­tail­ers bid to at­tract foot­fall to phys­i­cal stores whilst gen­er­at­ing on­line sales.

Sus­tain­ing the hype

As brands con­tinue to craft in­creas­ingly creative ways to en­hance the shop­ping ex­pe­ri­ence, the em­bat­tled re­tail sec­tor is slowly gain­ing its foot­ing after sales rose 8.6% YOY in Fe­bru­ary buoyed by de­mand for food, clothes, as well as grow­ing foot­fall in de­part­ment stores, super­mar­kets, and hy­per­mar­kets.

How­ever, such gim­micks can only hold a shop­per’s at­ten­tion for so long—re­tail­ers must work re­lent­lessly to dif­fer­en­ti­ate their store of­fer­ings from the rest to draw con­sis­tent in­ter­est and foot­fall which they can mon­e­tise in the long run.

“To stay in the game, re­tail­ers would need to con­tin­u­ally re­fresh their sen­sory of­fer­ings in or­der to con­tin­u­ally en­gage and re­tain their cus­tomers. This strat­egy would also need to be adopted con­cur­rently with other in-store strate­gies,” said Tay.

Although ex­pe­ri­en­tial re­tail has been gain­ing ground in re­cent months, it also re­mains in a nascent phase that has yet to achieve the scope nec­es­sary to achieve its sus­tain­abil­ity, sug­gested Song.

ION Or­chard houses Gucci’s do-it-your­self store

Mag­num al­lows users to per­son­alise their ice cream on their mo­bile

Gucci store at ION Or­chard

The Shoppes at Ma­rina Bay Sands

Huey ying Tay

Tri­cia Song

wendy Low

Ong Choon Fah

Shirley Zhu

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