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Reinventing Orchard Road amid the subdued retail climate
ONE has to concede that Orchard Road is not the shopping belt it once was during its halcyon days. No longer do you see throngs lining the 2.2-kilometre boulevard, not even on weekends. Once regarded as the shopping and entertainment destination for Singaporeans and tourists alike, are Orchard Road's glory days dwindling?
To better understand the wane of such a key shopping destination, it is worth looking at what has changed in the retail environment over the past few years.
Primarily, consumer purchasing patterns have changed. There is an increasing dependence on the convenience that e-commerce offers, and a rise in the popularity of suburban malls. The Great Singapore Sale, once a much lauded event, has lost its appeal due to thrifty shoppers seeking out favourable promotions online.
From a tourism point of view, there is now a higher focus on budget and culture travelling; shopping is no longer a focal point. Coupled with international brands having a higher global penetration (their brands are readily available back home and potentially cheaper), Singapore's appeal as a key tourism destination for shopping seems to have waned.
However, all is not lost. Orchard Road still possesses many factors which makes it desirable. The strip is lined by iconic shopping malls, hotels and medical centres. These malls and hotels are home to a spectrum of fashion brands - from high street to luxury, and signature homegrown and international restaurants.
While it faces keen competition from Marina Bay Sands, Orchard Road still has the magnetic appeal for new market entrants to set up shop and generate brand awareness in South-east Asia. It is also worth remembering that it remains the longest retail strip in Singapore, which is a point of differentiation in terms of consumer experience.
There have been several initiatives introduced in an attempt to reinvent Orchard Road. These include the annual Fashion Steps Out, the monthly Pedestrian Night, and Rev-Up@Orchard to coincide with the Formula 1 Grand Prix, to name a few. Developers have also introduced redevelopment and asset enhancement works at buildings such as 268 Orchard Road and Centrepoint, as a means of reinventing the strip.
A more collaborative approach by the various stakeholders on Orchard Road is perhaps needed to regain its lustre.
The fastest way for Orchard Road to raise its game as a tourist destination may be to consider increasing tourist-friendly initiatives that cater to the needs of not only leisure shoppers, but also transient ones.
Very often, tourists have a few hours to spare between their hotel check-out and flight. If facilities such as centralised baggage storage and direct buses to the airport are made available, Orchard Road could be the choice destination to fill up the last day of their travel.
In addition, mall landlords can also offer centralised concierge services for shoppers to have a shopping-bag-free experience, with their purchases collected on the way to the airport, prior to boarding the buses. From the local shoppers' point of view, the concierge services can also include home delivery services.
We need to remind ourselves that local shoppers remain the consistent pool of consumers. A rebranding and repositioning exercise is necessary for Orchard Road to appeal to local shoppers again.
In the current retail climate, the recipe for success for malls tends to be product differentiation and unique shopper experience. Mall landlords can leverage the pool of budding local designers by integrating them seamlessly with the existing premium brands in the malls. Instead of constantly looking outwards for new brands, landlords can also now look within and play a part in nurturing these designers, who can potentially be the next wave of household names.
Leveraging the wide tree-lined pedestrian boulevard, landlords can consider introducing more pop-up stores outdoors instead of containing them within the mall, with the aim of merely filling up empty spaces. These store formats will help create awareness for the brands and allow shoppers to be more familiar with them. This can also be a good way to attract overseas brands that want to test the level of brand acceptance in the Singapore market, without making a long-term commitment.
Adapting to the evolving market sentiments and the needs of consumers is critical to the success of these shopping belts. Increasingly, there is a demand for a differentiated retail experience. It is now a necessity for shopping locations to have an overarching place-making strategy which includes activities planning and community engagement. This takes into account events and spaces which cater to the target demographic of both locals and tourists, encompassing both daytime and night-time activities.
Through active place-making, shoppers can expect events to be brought into the strip to create a more holistic shopping and recreational experience. For instance, on days when major sporting events are held, outdoor screenings of these happenings can take place in the open areas along Orchard Road.
In the past, marketing events such as Coca-Cola Happiness Creator Machine and the MediaCorp Subaru Car Challenge have successfully created some hype. Apart from centralised efforts by the Orchard Road Business Association (ORBA), more can be done by involving existing retailers operating along Orchard Road. For example, music festivals such as H&M Loves Music Festival can be held, combining people's love for music with fashion.
Integrating offline and online retailing
While retailers on Orchard Road have been pampered with guaranteed footfall in the past decade, it is now time for them to step out of their comfort zones and be more proactive. There is always a limit to how far brick-and-mortar retailers can engage in price wars, and fighting head-on with online retailers by aggressively cutting prices is definitely detrimental to their business in the long run. What these retailers should do is work around the barrier that e-commerce has - the unique social interaction between the brand and the consumer.
While brands have increasingly gone online, we have also seen online retailers going in the opposite direction by setting up new-format physical retail stores. Such stores exist often not with the aim of producing sales numbers, but to act as a platform to bridge the offline and online retail experience.
For example, Zalora has had a pop-up tour in some malls to showcase its products to offline shoppers. Stylenanda, which has gained popularity over the years as one of the best Korean fashion websites together with its sister brand 3 Concept Eyes, has started setting up stores in the high streets of the main retail areas in Korea, Hong Kong, China and Thailand.
In the years to come, experiential retail will be the next wave of change we expect for the retail environment. Lines between offline and online retail will be blurred, and brick-and-mortar shops will double up as an avenue where shoppers can touch, feel and experiment with the latest products - sometimes even before the products are launched officially.
We will see technology increasingly integrated into traditional retail to offer shoppers a unique and interactive shopping experience. Some examples include augmented reality shopping catalogues and product descriptions, 3D scanning of body sizes, and virtual changing rooms. Being Singapore's key shopping belt, Orchard Road landlords and retailers can spearhead this trend, and at the same time rebrand the whole shopping experience of the district.
- The writers are, respectively, senior manager, retail; and senior marketing executive, retail, at JLL.