Mega-sale events won't ring in happy holidays for retailers

Singapore

THE demise of department store Robinsons Singapore could portend a more muted holiday sale season, as Covid-19 takes a toll on retailers and their ability to survive, let alone offer the steep discounts consumers have come to expect especially along the Orchard Road shopping belt.

Robinsons' closure had come amid increased competition from e-commerce and specialist retailers, although the operator had added that the coronavirus pandemic made its challenges more acute.

The operating conditions are set to remain challenging even during Black Friday and Christmas, two of the biggest sales events for brick-and-mortar retailers traditionally. Although most store formats have reopened, near-zero tourism, social distancing rules and shortened operating hours continue to dampen sales, said Apan Barua, senior director of occupier consulting at property consultancy CBRE.

In particular, footfall at Orchard Road during the coming year-end holiday period is likely to be a small fraction of that during a typical holiday season, he added. Malls in Orchard Road experienced a 10 per cent year-on-year increase in footfall on Black Friday last year, according to data from CBRE. Similarly, foot traffic at Orchard Road on Christmas Eve last year was 13 per cent higher than the year before.

"Nonetheless, we are seeing mall landlords' and retailers' resilience from the redefinition of real estate strategies, repurposing of physical spaces, and at the same time, an acceleration of digital and tech adoption," Mr Barua said. "Retailers are strategising to have both online and offline deals to attract consumers' dollars and to cater to the shoppers who may still be wary of going to crowded stores."

Simon Chin, head of marketing at Isetan Singapore, said the department store will be able to maintain its discounts with the support of its partners. He noted: "Christmas is a significant holiday shopping event for Isetan and will continue to be. In recent years we have started to place more emphasis on Black Friday as well, as it has also become more popular in Singapore. Customers can look forward to great deals and events."

Nike store operator SUTL Sports Retailing will be taking a different approach to the sales this year. Group business director Alex Tay said it has increased its customer engagement on social media platforms and will be launching a revamped membership programme to help it leverage consumer purchase patterns and create more targeted marketing campaigns and promotions.

Sales have gradually recovered over the last few months following the circuit breaker, but with consumers spending more cautiously and a lack of tourists this year, holiday sales are expected to be softer than usual. "Instead of relying on steep storewide discounts to boost sales volumes, we intend to focus on offering SUTL Life member-exclusive programmes and promotions, such as early access to sales events and limited edition product launches," Mr Tay said.

BHG Singapore is banking on an improved in-store experience to draw shoppers, even though it will still offer discounts during the holiday sales. "The approach we've taken for international sales events goes above just discounts," said head of operations Lawrence Teo.

"What we would like to offer customers is not only value for money, but also more options with our private fashion labels as well as a refreshing shopping experience with the relaunch of the BHG Beauty Hall at Bugis Junction earlier this month," he added. The beauty hall now offers nearly 94 brands, up from 48 before the revamp. It also features "retail theatrics" such as virtual try-on using YouCam, lift-and-learn technology and gamified rewards.

Uniqlo Singapore, on the other hand, does not typically "fight on price" and offer steep discounts like others would for festive sale campaigns, said marketing director Joyce Tan. It will, however, put out limited-time offers on selected and popular items, such as its LifeWear essentials.

With the pandemic pushing more consumers to shop online, retailers are also having to adjust their strategies for the Black Friday and Christmas sales that usually take place in stores and malls.

"Due to the unfortunate events of this year, we are trying to make our sales available online through our own Isetan Online as well as other digital partners, like LazMall," said Mr Chin. "Despite the situation, we still hope to be able to spread the joys and deals of these events to everyone, even those shopping from the comfort of their own homes."

BHG is working to expand the range of offerings - especially festive ones - on its online site, which was rolled out in June. And "while the general sales mechanics are the same across channels, we typically customise promotions for online and offline shopping journeys," Mr Teo added.