SINGAPORE: Even as competition heats up in an increasingly saturated sports retail market and the e-commerce trend leaves some local retailers in the dust, Royal Sporting House appears to be taking it all in its stride.
“I don’t believe we actually have any competition in Singapore,” Mr David Westhead, chief executive of the sporting goods distributor and retailer in Southeast Asia, told Channel NewsAsia in an interview on Wednesday (Jul 26).
Royal Sporting House, owned by Dubai-based conglomerate Al Futtaim Group, entered the Singapore market in 1977 and has, over the years, grown to a network of 30 stores.
Over the past four decades, Mr Westhead said the presence of big international labels like Nike and specialist brands such as Hoka One One under one roof at Royal Sporting House has helped to keep competition at bay.
Even as individual sports brands ramp up their footprint in Singapore and new multi-brand retailers such as Decathlon position themselves with more affordable prices, Mr Westhead remained upbeat.
“For example, if you want to try a new sport, you can go into Decathlon to pick up something at a relatively low price. But when you become competent in the sport and want to go for a technical product, you can’t get it from Decathlon.”
He added: “What they have done is open up a new market… which is a completely different target market. We are not in direct competition (and) I don’t see them as a threat at all.”
Mr Westhead’s optimism extends to the retailer’s decision to go slow in joining the e-commerce bandwagon.
While it has a website, online shopping functions and accompanying delivery services for Royal Sporting House will only be available next year.
Having an e-commerce platform may be “important” to meet new customer demands, but it is an “add-on service” rather than a disruptive force that needs to be addressed urgently, said the chief executive who took the helm two years ago.
“It is important because the customer wants it and it’s a service that you have to offer. But is it going to break the bank by not having it? Absolutely not.”
Costs and profitability are also factors that retailers need to weigh, added Mr Westhead.
In Asia, online sales for fashion and sports categories tend to make up only 4 per cent of a company’s total retail sales, which is significantly lesser than the 15 per cent in Western markets, he said. It is also incomparable to the 5 to 15 per cent increase in sales that the company usually sees after the renovation of a physical store.
“Going online is actually very expensive and less profitable than offline. So my answer to your question is: ‘I don’t think it’s disruptive for me and I don’t think it’s disruptive for anybody in Asia at the moment’,” he said. “I’m not worried about not being online currently.”
NEW FLAGSHIP STORE TO RE-ENERGISE THE BRAND
As such, the retailer has been diverting much of its resources to refitting its stores.
Earlier this month, it unveiled a new flagship store at Tanglin Mall. Spanning 8,000 square feet, it is the biggest Royal Sporting House store in Singapore.
Among the changes include a streamlined selection of brands to offer a deeper product selection within the categories of running, training, tennis and swimming. The flagship store also offers additional services such as allowing customers to try out their running shoes on a treadmill in store, as well as providing gait analysis and free re-stringing services for tennis rackets.
The revamped store layout also includes an event space, which can be customised for yoga sessions and running clinics that will be held once a month.
Mr Westhead said the facelift for the local stores was necessary in meeting changing consumer needs and attracting millennial consumers.
“It’s about building a community in the store. Compared to the older customers that are more value-conscious and discount-driven, the younger group focuses more on experience.”
Thus far, the retailer has ploughed in a 7-digit investment for its refitting plans – a hefty but essential investment to make even as the company suffered some impact from sluggish retail sales over the past three years.
“When I first joined the organisation two years ago, my assessment was that there was a lack of attention and innovation for a lot of the Royal Sporting House stores. It was fine going into a store 15 to 20 years ago and finding products piled up high to the ceiling, but nobody wants to shop in those kind of stores today,” said Mr Westhead.
“The brand has been around for 40 years. You got to be innovative and keep on changing it so that it stays relevant for the consumers.”
Over the next five years, the facelift will be carried out at the remaining stores in Singapore, with the retailer contemplating expansion for some of its smaller locations in the heartlands.
A new 3,000-square-feet store is also in the works. Located at ION Orchard, it is slated to open in October and will feature sporting products tailored for the tourist crowd at the shopping mall.
With these in place, the chief executive said the sporting goods retailer has a “clear strategy” in Singapore and is unfazed by the varying challenges that have soured sentiment in the local retail industry.
“Nothing keeps me awake at night about Singapore. I think the only thing that keeps me conscious about what I have to do is the new markets that we are currently going into like Vietnam, and the ones we are looking at such as Myanmar and Cambodia,” Mr Westhead told Channel NewsAsia.
“For Singapore, we have a very clear strategy and it is working.”