MORE CLOSURES, A REDUCED FOOTPRINT
But as the competition stiffened, some in the industry began to see the end of the day.
Yaohan closed in 1997 after its parent company in Japan went bankrupt, while Daimaru closed in 2003. In 2005, Seiyu sold its Singapore operations to CapitaLand, which then sold them to Beijing Hualian Group ( BHG).
John Little closed its last outlet in Plaza Singapura in 2016, marking the end of Singapore’s oldest department store, open since 1842.
Store closures and the loss of household names have continued in recent years as more thorny challenges have emerged.
For one thing, the allure of a “one-stop shop” – a department store’s greatest strength – was rapidly losing relevance around the turn of the century with shopping malls sprouting up in Singapore.
“Malls can also be said to be akin to a large departmental mall,” said Ms. Regina Yeo, assistant professor of marketing at the National University of Singapore Business School.
“Department stores used to be popular because they served as a ‘one stop shop’. There were also fewer conveniently located malls throughout the island, so going to the larger stores was a treat to pick up everything you needed.
The rise of budget air travel drove people to shop abroad, but the biggest hammer came in the form of e-commerce which disrupted consumer habits.
Retail therapy can now happen from the comfort of one’s home, with an abundance of options available at the touch of a button. Online shopping platforms and price comparison sites have reduced the need for in-store purchases and customer loyalty, especially among young people, said Ms Lim of Singapore Polytechnic.
Department stores, with their overhead and operating expenses, are also struggling to compete with online retailers on price, experts added.
Finally, the COVID-19 pandemic, which shuttered stores for months and accelerated the digital shift, was another fatal blow that Ms Yeo said has “certainly accelerated the decline of department stores.”
Going forward, the hurdles are piling up in the form of rising costs and inflation.
In particular, department stores targeting the mainstream and mid-market segments could be hit harder by economic uncertainties as their customers become spending conscious, Lim said.
THE PATH TO FOLLOW
So what can be done?
Much has been said about the transition to digital, with department stores now having their own online shops or links with e-commerce players.
Robinsons has also been resurrected as an online-only retailer after being acquired by Canningvale Australia last year. General Manager Jordan Prainito told CNA that sales have been “encouraging,” with “substantial growth” each month.
“As we are a private company, we cannot share details, but we can say that millions of Singaporeans have come back to us online in the past 12 months and our year-on-year growth is high. .”
When asked if inline pivoting was the right way to go, Prainito’s answer was yes.
“100%,” he wrote in an email. “In a market where costs are rising in all aspects of the business…launching an online store is more profitable than opening a new physical store.”
Operating online also allows Robinsons to “gather vital data” for product development and supplier acquisition purposes, while providing customers with convenience and other benefits, he added.