Multi-concept stores gain appeal for differentiation, 'survival'

FACED with growing competition from e-commerce and higher rental costs, the multi-concept store format – a combination of retail and other offerings such as food and beverage (F&B) – is becoming a more attractive way to do business.

While the idea is not entirely new in Singapore, companies say it is catching on in today’s more difficult business environment.

Rose Tong, the executive director of the Singapore Retailers Association (SRA), said multi-concept stores are able to offer “differentiated retail experiences” and allow the business owners to explore “greater collaboration for survival and longevity”.

One example is Mac.Infinity, a laptop repair shop in Funan mall that also sells Acai bowls from W Acai. Victor Hong, the founder of Mac.Infinity, believes that this multi-concept offering has  helped improve customer experience and satisfaction in his shop.

“Some customers are not comfortable with leaving their laptops at our shop and prefer to wait while it is being repaired,” said Hong. “They will then have the option to get a quick bite to pass the time.” 

Eve Felder, the managing director of the Singapore campus of the Culinary Institute of America, attributes the  popularity of multi-concept stores to the greater desire for social interaction, as they can “meet the social, intellectual and emotional needs of customers under one roof”.

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Some stores offer multiple concepts under one operator, such as Walking on Sunshine (WoS) at Orchard Central, which has a hair salon and cafe in the same space.  Its founder Luke Yi explained that WoS was conceptualised for busy people that would like to get several things done at the same time.  Providing multiple services also allowed them to reach out to a wider range of customers and have alternate sources of income.

Then there are other multi-concept stores involve collaborations between existing brands. Stationary and leather goods company Bynd Artisan, for instance, shares a rental space with dessert store Sunday Folks at Ion Orchard. 

Bynd Artisan has kept up with the shift towards e-commerce, gaining a wider audience through its own online store. However, online retail lacks the interaction and tactile experiences of a physical store, said founders of Bynd Artisan, James Quan and Winnie Chan. 

The wish to engage more customers motivated the duo to move out of their previous store as it was too small and this limited the possibilities for interaction. Partnering Sunday Folks meant that they could obtain a large space on the fourth level  of Ion at Orchard Road, which was meant to be leased out to F&B stores only. 

Quan and Chan said that the vision was for each brand’s characteristic to remain distinct, while bringing out the best in each other. Through this partnership, they hope to provide an immersive shopping experience. 

Since their re-opening in 2021, the store at Ion saw close to a 100 per cent increase in revenue as compared to their previous space that opened in 2018. 

To maintain transparency, the two brands each hold a copy of the master tenancy agreement which splits the rental. Invoices for operational costs are billed separately, while also backed by original invoices showing how much was billed to the other tenant. The two brands also operate on separate point-of-sale systems. 

Aside from creating a tailored customer experience, SRA’s Tong noted that partnerships allow brands to share resources. 

“Such collaboration may help shorten the time typically required for business owners to go to market and enable greater efficiency of limited resources,” she said. “Working together also makes it possible for joint parties to save on marketing and promotion costs.” 

One example is Huggs-Epigram Coffee Bookshop located at the Urban Redevelopment Authority centre in Maxwell Road, with two brands sharing the same space to better cope with rental costs. 

This is not a “book cafe”, but instead a loose collaboration to operate as a bookshop that also serves coffee, said Epigram’s creative director Edmund Wee.

Book cafes were a minor fad with only one or two that remain open in Singapore today, he added. “They might still succeed as a cafe but hardly any books are sold there,” he said.

Bringing in a separate F&B partner can also help address one challenge of a multi-concept store: the requirement for different types of know-how.

“Food and beverage business requires a deep knowledge in the business of supply chain, producing delicious food and beverage and high touch service,” said Felder. “It is not prudent to enter into the F&B business based solely on passion.”

Despite the challenges brought on by multi-concept stores, SRA’s Tong believes that the trend is here to stay. “Even before the Covid-19 pandemic, consumers were in search of new and differentiated shopping experiences,” she said. “The 2-year long pandemic further heightened the need for retailers and F&B operators to offer differentiated retail experiences and explore greater collaboration for survival and longevity.”