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How to rescue the retail scene in Singapore

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How to rescue the retail scene in Singapore
If the local retail landscape isn’t yet dead, it surely is dying. We speak to industry insiders for clues on how to turn the once thriving business right back around

Pop quiz. Where did the line, "Good news for people who love bad news" come from?

A. Modest Mouse's Grammy-nominated indie rock album;
B. The title of an episode of One Tree Hill, the teen TV drama popular during era of The O.C. and Dawson's Creek;
C. A description of the brick-and-mortar business in Singapore shopping malls; or
D. All of the above.

If you answered D, not only are you an ace in popular culture, you represent a heavy majority of shoppers who are underwhelmed by the retail offerings on and off Orchard Road. It is no longer up for debate, nor do you need the statistics to prove, that the brick-and-mortar business in Singapore has been experiencing a steady decline. The brimming inventory matched with dwindling human traffic will show you this, and so will the empty parking lots — the evidence of which is well known and well documented by both the traditional media responsible for its upswing, and the digital media that played a hand in its on-going demise.

Patrina Tan, Senior Vice President of Retail, Marketing and Leasing at OUE Limited put it like this: "It is no secret that the retail environment is in a state of flux and undergoing unprecedented changes. Consumer habits and preferences have changed alongside the rise of digital and technology, and these forces have reshaped the retail landscape."

Over the last few years, Raoul, John Little, New Look and Parco are just some of stores that have shut their doors all over the country.

With issues such as large overheads, expensive workforce, and rocket high rental prices plaguing brick-and-mortar, online retail — especially smaller enterprises — is dominating the market at the expense of its offline counterpart; what with its low overheads, minimal staffing, and next-to-zero rental commitments. "Small merchants stand to benefit most as they can potentially tap into social networks to sell products in a convenient and low-cost manner," said Rahul Shinghal, General Manager of Paypal Southeast Asia.

"Consumer habits and preferences have changed alongside the rise of digital and technology, and these forces have reshaped the retail landscape."

Its attractive international offerings, fast shipping, and easy returns converted loyal mall goers to Net-a-Porter and ASOS top clients rapidly, effectively altering consumer behaviours (more on that later) in a cycle favouring online as the purchasing channel of choice. It's the reason Zalora became a multi-million dollar juggernaut seemingly overnight; it's how Amazon Prime found its footing in Singapore.

Can we do one without the other, virtual shopping without physical stores? Do we want to? The answer to both is "unlikely." To prevent brick-and-mortar from taking a further nosedive, the insights by industry experts suggest that the answers leading to brick-and-mortal survival, aptly, are hardly one size fits all.

All day Groundhog Day

Furqan Saini, stylist, part-time lecturer at LASALLE College of the Arts and seasoned fashion lover, is frustrated. Impeccably dressed, but frustrated. "The current retail state is dull. It's boring." He continued, "We are inundated by malls filled with either the same high street brands that are literally within walking distance from one another, or small stores that carry whatever they can buy in bulk from Dongaemon and craftily slap their own label on it," referring to consumers' regular diet of Zara, Topshop and Uniqlo.

Indeed, a gander at the directory of shopping malls reveals that store variation isn't one of the strengths of retail properties. Tjin Lee, the brain behind Singapore Fashion Week as well as founder and managing director of Mercury Marketing & Communications, attributes this to the lack of innovation. "Orchard Road hasn't innovated fast enough to keep pace [with consumer wants]. The street needs more diverse offerings, because now that neighbourhood malls have what they have, there's little to no reason to come to Orchard Road."

Saini agreed, furthering Lee's point about variety. He called it the chicken-and-egg-dilemma, where consumers aren't adventurous with their choices because of conservative buyers who steer clear of more flamboyant items they suspect consumers won't spend money on, and consumers subsequently being bored by the "safe" selections that were meant to appeal to their sensibilities. "Instagram has created an army of people who [want to] look stylish, but those looks have been replicated ad nauseam from Stockholm to Singapore, Milan to Minsk," he lamented. "We don't need more of the same."

Orchard Road

This is where small businesses come to play, according to Lee, who made comparisons between Harajuku and Haji Lane of days past. "Why do you go to Harajuku? To find interesting Japanese designers, quirky little things, like how we used to on Haji Lane at its peak," she said. "So perhaps, there should be a cool creative enclave, somewhere along Orchard Road, where we can find one-of-a-kinds that aren't available anywhere else."

The newly opened Dover Street Market Singapore, only Dover Street's fourth store in the world, has the potential to be the kind of sweet spot Lee spoke of. Known for its off-centre offerings, clever curation of the eclectic, and perhaps most crucially, collaborations with creatives in the respective markets, Dover Street's latest property hasn't been opened 30 days yet its foot traffic signals hope for traditional fashion commerce. Thousands flocked to the often-sequestered Dempsey Hill on opening weekend to snag cool threads from brands still under the radar, blink-and-it's-gone T-shirts co-designed with Cherry Discotheque, and limited edition DSMS merchandise unavailable in its e-shops. Whether DSMS can keep this up is anyone's guess.

The newly opened Dover Street Market Singapore holds promise to a new era of retail in Singapore.

Fashion is not enough

The makeup of the average customer of 2017 isn't the same as the makeup of the average customer of 2007. For one, millennials — whose spending power is so strong, it will soon surpass that of the generation prior — are reportedly keener on investing in experiences, less on material things. "Consumers are now driven more by experience and social transactions rather than one based solely on monetary transactions," Patrina Tan confirmed. "As consumer behaviours evolve, the expectation is that retailers and malls need to better meet their lifestyle needs holistically."

Lee agreed that the responsibility lies in retailers to draw consumers out of the comfort of their homes and strong Wi-Fi signals, into malls with a myriad of attractions, for without them "there's just no reason to go shopping, when I can get everything online, including the Netflix I'm watching, the wine I'm drinking and my UberEats on its way." So how do retailers get consumers like Lee chomping at the bit to step foot into malls? OUE Limited's Patrina Tan's idea: Landlords and retailers have to begin to reimagine the mall concept and the use of space to deliver more experiences that consumers cannot find online, or anywhere else.

"There should be a cool creative enclave somewhere along Orchard Road, where we can find one-of-a-kinds that aren't available anywhere else."

In Good Company, one of Singapore's most successful local labels, take this to heart. Sven Tan, its co-founder and creative director told Buro 24/7 Singapore, "People go out to live emotions, indulge in a moment. They aren't just buying a product; they are buying into an experience, the brand story, and all the nuances that come with it in relation to their own personalities, wants, and interests. As such, the in-store experience will determine the success of retail."

Silver lining

Retailers should consider, among other innovative elements, art installations, interactive events, and creative pop-ups. For In Good Company, what elevates the customer in-store experience is food; housed within its retail space at Ion Orchard is one of five Plain Vanilla Bakery outlets in the city. Another click-to-mortar success is Beyond The Vines' pop-up at Mandarin Gallery in early 2016, where the retailer incorporated elements such as calligraphy and floral arrangements. Having experienced overwhelming responses, they have since taken a permanent tenancy at the mall, and is due to open another boutique at OUE Downtown Gallery later this month.

This e-tailer made its brick-and-mortar debut at Mandarin Gallery after a promising 3-month pop-up run last year.

However, some ideas are more sustainable than others, warned Tjin Lee. While In Good Company and Beyond The Vines may have found their formula, other retailers should practice with caution. Special one-off events are like "a shot of adrenaline. You can't do it too frequently and you can't do it forever," she said, referencing successful fashion collaborations such as Louis Vuitton and Supreme, as well as H&M and its yearly designer mash-ups. "Still, the worst thing to do is to do nothing at all."

Shoppers with their haul from H&M's designer collaboration with Alexander Wang.

Engagement, engagement, and more engagement

Millennials are spending more time on their mobile phones, specifically, shopping on their mobile phones — a statistic that will only intensify with time. According to PayPal, mobile shopping spending is predicted to increase by 42% in 2017 from 2016, amounting to more than $1.2 billion in transactions.

The answer is not in fighting the fast, secure, ubiquitous and frictionless digital purchasing that allows customers control and customisation. The answer is in complementing it. Rahul Shinghal of PayPal, Patrina Tan of OUE Limited, Tjin Lee of Singapore Fashion Week, Sven Tan of In Good Company and Furqan Saini chime in unison: Go omnichannel.

"The worst thing to do is to do nothing at all."

This not only means engagement with customers through visual merchandising and innovative happenings that warrant hashtags and selfies, but support for consumers that make them feel truly welcome, starting from mobile right down to the fitting room until customers leave the store. Only then will retailers create emotional ties between its customers and its brick-and-mortar, a tie that can be difficult to culture through LCD screens alone.

Though he hardly shops in Singapore, Saini is a frequent patron at Club 21 at Four Seasons and Club 21b at Forum The Shopping Mall because of the excellent customer service. The staffs know him by name, they know what he likes and he pre-orders the pieces he's seen online in stores before the start of the fashion season. While that level of service may not be possible for large number of customers, Saini recognised a need for cleverer investment in manpower. "Service standards must improve" starting with retailers "paying top of the line for better-qualified employees who are not 'drones' but opinion leaders with strong product knowledge."

The In Good Company store at Ion Orchard, featuring Plain Vanilla's 20-seater deli-style café.

Sven Tan attested to this. "Brick-and-mortar is a necessity for us. To be able to feel, try on a piece, discuss its styling options with a knowledgeable retail staff is important for our customers. It is through our stores that they get a real sense of what In Good Company stands for."

The roles are reversed

Where does this leave e-commerce? For one, it will never take over all brick-and-mortar, and vice versa, according to Patrina Tan. "The model, moving forward, is a hybrid one, where retailers have a strong online presence but use the brick-and-mortar stores to drive the brand equity and experience," she said.

"The answer is not in fighting the fast, secure, ubiquitous and frictionless digital purchasing that allows customers control and customisation. The answer is in complementing it."

The hybrid model calls for a role reversal between the retailers and their landlords. In the not so distant past, e-commerce platforms existed to build brand awareness, while the sale was typically closed in stores. The reverse is truer now. Tan's suggestion mirrored that of Saini's, who proposed that retailers explore using their brick-and-mortar stores as showrooms. This inverse model can captivate new audiences in the area by wowing them with beautiful infrastructure. The gallery-like space invites customers to view pieces in real life, try on various sizes for fit and interact with like-minded individuals and/or enjoy a form of immersive and interactive media, whilst online platforms is focused more on transactions.

Times are changing, and retailers have to change with it. Sven Tan summed it up best: "Retail economics will always evolve — it goes up and down. We will all have to adapt. There's no way we can hanker after the 'better days', that's not moving forward."

"There are no better days than looking to the future." 

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