SINGAPORE: Once hailed as one of the best shopping streets in the world, Orchard Road has been under siege from all fronts, with competition from regional cities, e-commerce, fast-changing consumer tastes and neighbourhood malls.
The relentless disruption from online shopping alone has forced many Orchard Road shops to close and some international chains to consolidate their stores.
While the Government explores physical enhancements and retailers pursue e-commerce platforms, these measures alone may not bring shoppers back. Orchard Road needs to look beyond the form, and revisit that timeless principle of selling: Know your customer.
In the not too distant future, millennials will form over half of our workforce and represent the largest group of shoppers, online and offline. The millennial shopper is well-travelled, digitally-savvy and discerning. They make informed buying decisions based on online research, social media and peer recommendations.
DON’T JUST JUMP ON THE OMNI-CHANNEL BANDWAGON
Before jumping on the omni-channel bandwagon, retailers should first seek to understand what drives the millennial’s buying decision.
It may be overly simplistic to say they prefer shopping online just because it’s cheaper and convenient. Shoppers will bypass Orchard Road if they can get the same items in neighbourhood malls, or if the stores just aren’t selling what they really want.
For millennials, it’s not always about low prices and cut-throat competition, or online versus offline. Churning out fast fashion and offering lower prices may be missing the point with this group.
Millennials are trend-spotters who believe in individual expression. They are also willing to spend big on personalisation and experience.
LUXURY STILL SELLS
Just look at the recent Louis Vuitton x Supreme collaboration and the pandemonium they created in every city they launched.
Seeing how hipsters paid as much as S$2,500 just for queue proxies and nearly S$3,000 for a t-shirt, it’s ironic and hard to imagine that the famous skate label Supreme once faced a cease-and-desist order from French luxury conglomerate and owner of the Louis Vuitton brand LVMH for using the famous LV monogram on their skateboard.
In fact, LVMH reportedly enjoyed a 23 per cent profit increase in the first half 2017, thanks in no small part to the LV x Supreme collaboration.
Luxury houses like LV, Gucci, Moschino and D&G have been quick to catch on millennials’ love affair with vintage 90s style, which is trending in a big way. Many of them are sporting the same oversized, big-logo D&G and Moschino t-shirt we used to wear in the 90s, accessorised in their own unique styles.
Do shops in Orchard Road engage millennials or sell what they are prepared to splurge on? Are they well-informed and moving fast enough to keep up with today’s break-neck speed of change in the retail landscape?
Barely a decade ago, the disruptors in fashion retail were the fast retailers like Zara, who took the latest designer styles from catwalk to street in barely three weeks, at super affordable prices. Now, many of the same fast fashion retailers are being forced into consolidation by today’s new disruptors.
AN OLD LOVE REINVENTED: THE MAGIC OF VINYLS
While millennials are digital natives who embrace disruption, it’s easy to fall into the trap of thinking that all they want is something quick and fast. But this discerning group willingly pays for quality and experience.
It’s therefore not surprising that they have rediscovered for instance, the magic of vinyls, which have rich analogue sounds they never knew, having grown up with digital formats and music streaming. Listening to vinyls or trying out speakers in a music store is all part of a shopping experience you can’t get online.
Millennials are also social creatures who thrive in a communal environment where they hang out, discover new experiences with peers and check out what’s trending – a reason why Apple stores which let shoppers see, touch and try out new Apple devices thrive everywhere they go.
In spite of e-commerce, physical stores will always be relevant if they create an experience that can exist only in a physical realm. This experience can come in the form of in-store entertainment, a cafe within a shop or just great service.
That’s why many online retailers like Hipvan and Zalora have expanded into physical or temporary pop-up stores to extend their shoppers’ experience from the virtual to a more interactive touch-and-feel one.
RECREATE THE SHOPPERS’ EXPERIENCE
How would mall owners and retailers understand what millenials would leave the comfort and convenience of online shopping to venture out for?
By leveraging data analytics, one may learn that millennials are no longer satisfied with homogeneous malls repeating the same shops and large-chain restaurants. One may also discover that today’s young shopper seeks individual expression, new experiences and are quick in catch trending styles.
Knowing their customers has allowed brands like LV to leverage on Supreme’s streetwear supremacy to reach out to young shoppers. After the successful launch of Puma’s Fenty fashion collection by celebrity Rihanna to great fanfare, Puma also recently announced the upcoming launch of Rihanna's make-up line Fenty beauty.
Orchard Road mall owners and retailers who “get it” by leveraging on data to know their customer and deliver the merchandise and experience they really want, will succeed in bringing shoppers back.
Maybe then Orchard Road will see more independent retailers like Dover Street Market who appeal to today’s millennial shoppers craving individuality, new experiences, interaction and a sense of community.
Sulian Tan-Wijaya is executive director at Savills Singapore.