Robinsons department store announced last year that it would exit the Singapore market after 162 years. The reasons given were changing retail buying patterns from offline to online spending, weak demand made worse by the Covid-19 pandemic and cost pressures such as rent. Why was this once highly regarded establishment unable to tide through the last few years?
Lack of market differentiation
In 2013, Robinsons opened its new flagship store in The Heeren at Orchard Road. Six years of declining sales saw it sank into the red. With companies taking their storefront online, Robinsons relied solely on their physical stores to bring in business. Its skincare and cosmetics lines were similar to that of its rivals. Electronic products on offer were readily available to consumers on eCommerce platforms at competitive prices. Their fashion offerings were also unable to attract shoppers who had other options from the many other retailers along the Orchard belt and online.
Wrong Place, Wrong Time
The lockdown in 2020 saw shopper traffic at Orchard Road at zero as only shops that provided essential services were allowed to remain open. Shops and restaurants scrambled to have pictures of their products taken to put online. Robinsons did nothing. It was evident that social restrictions were here to stay, and businesses needed to rethink their digital game plan. Given the continued work from home practice, heartland malls continue to enjoy higher patronage than the downtown area. Robinsons’ model of locating their stores along the Orchard road belt failed to capitalize on this.
Digital Transformation
While Singapore’s retail sales have gone down, data shows that online shopping has increased (See chart, Business Times March 17, 2021). Companies that transform their shopfront to an easy-to-use online platform with vast choices, attractive pricing as well as use of stored customer preferences to provide personalized services will enjoy a pandemic-proof existence.
Having a digital backbone that looks after the backend processes means that the company can give the customer what they want when they want it and at competitive prices. Customers are more likely to re-purchase from these companies. Staying stagnant without embarking rapidly on the Digital Transformation Journey led to the failure of Robinsons.
For more information on how to get your business started on the Digital Transformation Journey, do drop an e-mail to sales@zooloo.asia.
Explore more
- Learn more from our eBook series on Digital Transformation
- Learn more about our “Digital Backbones”
- Learn more about IMDA's Wholesale Trade Industry Digital Plan
- Learn more about IMDA's Start Digital Pack
