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The demise of retailers. And how your brand can pivot around this.

This article outlines why retailers like Robinsons' and Isetan, amongst others, will falter and fail within the next decade and how you can position your brand to win despite this trend.

Retail therapy?

If this is one of those things you might be thinking of before the long weekend hits, here is a moment that you might want to take to see how retail shopping might fit into your agenda on the weekend in the coming decade, especially if you love retail outlets like Robinsons, Isetan, Tangs, Marks and Spencer, and those with similar standing.

Why is that so, you ask? Aren't they the darlings of centrally pooling different brands into a single retail space for the shopper's convenience?

Well, yes... but the huge part of what they have done in the past is lost, especially since the dynamics of retail therapy has shifted. This comes also as a result of the pandemic and shifting customer habits. The number of times that customers have gone in-store to buy something only to touch, feel, and get the right sizing, before heading to an online store with a better discount to make the purchase of the same item.

Disintermediation has indeed taken its toll. In Singapore, Robinsons has exited the entire retail scene. Isetan has just shut one of its stores leaving itself with just three outlets. Homegrown brand Naaise found that out the hard way - after taking up retail space in Jewel (Changi Airport) and other parts of the island. And of course, HonestBee, which was supposed to be a tech-driven retail-grocery-dining experience. The others will follow suit shortly.

Why is that so?

Simple. Cost mechanics.

The rental cost of retail space is punishing, especially in a cosmopolitan city like Singapore. With a myriad of choices and the retail shopper having too many goods things in plain sight, one can only wonder how these retail outlets make real money after deducting for staff and overheads.

But haven't they tried to pivot their retail strategy?

Oh yes, of course, they have tried. They tried a digital strategy, where they offered customers rewards for downloading their retail app, and with it, every trick in the bag like return discounts, members' specials, to keep the customers coming back, but there is only so much you can do when the tides have changed. It is not a fault of theirs for not trying. It is just that the season for that style of buying is over. And hence, retailers of this nature - using the central pooling strategy to attract customers to a single commerce marketplace space will be at a severe disadvantage.

In fact, any retail strategy that uses this approach - a physical-dependent purchase experience would mean that if the product can be bought elsewhere given the digital climate, the shopper is no longer constrained to the physical environment. This disadvantages the retailer in many ways. Especially once the customer says "let me go think about it." If they can go direct to the source / manufacturer, the retailer has just lost everything - from time to staff costs of procuring the customer, marketing costs, etc. Retailers will continue to bleed out and hemorrhage until the cows come home.

And they can do nothing about it.

How do all the luxury brands continue to do it so well?

Well, when your margins are obscene - $600 for a printed T-shirt of your brand on it, when it costs just $3 to make, you certainly can afford to remain in the retail scene.

All you need is to attract a cult following for your brand and you will continue to own the space. So the name of the game really is a margins game. What products can you create that are desirable sufficiently to a critical mass to support your operations and more? If you are able to identify that, you will be able to reap recurring purchases, and a viable business to the likes of LVMH (Louis Vuitton, Christian Dior, Givenchy, Marc Jacobs, Stella McCartney, Loro Piana, Kenzo, Celine, Fenty, Princess Yachts, and Bulgari, amongst others) and Kering group (Saint Laurent, Gucci, Balenciaga).

Why do you think that these conglomerates set out to acquire other luxury brands like Tiffany? Because they fit the criteria of having a following with obscene margins.

How then do brands play to win if retailers are dying out?

Your next best strategy is to bring your brand, products, and services direct to consumers.

If you need help to quickly scale up in this direct-to-consumer (D2C) space, we are here to empower you with our platform design expertise that allows your brand to have sight of your customers' data in a single dashboard, marketing capabilities and customer engagements at your fingertips. With the shuttering of retailers, taking your brand up to speed will be necessary as you will have better visibility of who is buying your products, and how you can reach out to them continually for them to buy on a recurring basis.

Copyright SYL+JAS (c) 2021. All rights reserved. No part of this article may be reproduced or rewritten in any form without expressed permission from the agency.

If you’re looking for a design / brand communications partner to journey with your business through this trend, we’re here to help. Drop us an email at and we will be in touch shortly.

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