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SINGAPORE: In its 162 years of operations in Singapore, the Robinsons department store survived the bombings, a three-year shutdown during the Japanese occupation and a massive fire that burned down its S $ 21 million facility at Raffles Place.
But on Friday (October 30), Robinsons announced that it would be closing its last two outlets here at The Heeren and Raffles City Shopping Center, joining companies like Sogo, Daimaru and John Little on a list of department stores that have been closed to over the years.
Just two months earlier, he closed his seven-year-old 85,000-square-foot store in the Jem Mall.
The venerable retailer, which was acquired by the Dubai-based Al-Futtaim Group for S $ 600 million in 2008, cited weak consumer demand as one of the reasons for its closure. He also described the department store business model as “outdated.”
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The department store’s format as a one-stop shop for fashion, household goods and other items has lost its appeal, said Seshan Ramaswami, associate professor of marketing education at Singapore Management University.
“The growth of e-commerce is one of the main causes of the decline, as many e-commerce sites can serve as a 24/7 one-stop shopping destination without the costs associated with recruiting. of sales personnel and the rental of exclusive spaces “he told CNA.
File photo of Robinsons at the Jem Mall before it closed in August 2020.
“Physical retail is also something of a real estate business, and making every square foot pay off in sales, while paying high rents and maintaining an orderly environment, is not easy for these department stores,” said Dr. Ramaswami.
The COVID-19 pandemic has only accelerated its decline, he added.
Retail rent in Singapore is unlikely to ever go down as it is tied to real estate investment trusts (REITs), said Singapore Polytechnic School of Business senior professor Amos Tan.
It could only be a matter of time before more department stores join Robinsons, he said.
In August, the Japanese department store chain Isetan posted a net loss of S $ 317,000 for the quarter ended June 30, compared with a net profit of S $ 1.6 million for the same period last year.
Dr Ramaswami noted that the Orchard Road shopping belt, as well as other tourism-oriented shopping centers, such as Marina Bay Sands, have been particularly affected by COVID-19, due to fewer local visitors and the absence of traffic. tourist.
READ: Robinsons to close last 2 stores in Singapore due to weak demand
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It doesn’t help that some of Singapore’s major tourist sources, such as China, Indonesia and India, are now less interested in Singapore as a shopping destination, said Dr. Ramaswami.
“The national retail scene in all those countries has improved dramatically in the last two decades, both in physical format and online,” he added.
A John Little store in Plaza Singapura before it closed in 2016 (File Photo: Tang See Kit)
Commenting on the closure of Robinsons last week, Human Resources Minister Josephine Teo noted that many feel a sense of loss over the closure of a long-standing retail institution. But for the younger generation, e-commerce platforms like Shopee and Lazada have become the equivalent of department stores, he said.
In this sense, Robinsons had been installed earlier this year on Lazada’s LazMall platform.
But it may not simply be a matter of establishing an online presence for department stores, said Tan of the Singapore Polytechnic. Online consumers tend to be more utilitarian in prioritizing price over intangibles like brand history, he said.
“All of these e-marketplaces allow you to compare prices, and that’s one of the core behaviors of today’s consumers,” he said.
A view of Metro’s Centrepoint store before it closed in 2019 (Photo: Facebook / Metro Singapore)
To attract customers, traditional retailers who connect to the Internet must improve the overall shopping experience so that shoppers see beyond dollars and cents, Tan said.
This is more sustainable than competing on price, he said. “There is only one direction if you enter a price war, and that is to the south.”
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However, there is still a demand for physical retail, said National University of Singapore (NUS) Business School associate professor Ang Swee Hoon. E-commerce giants Amazon and Alibaba, who made billions through online purchases, have set up their own physical stores in recent years, he noted.
“So as more people shop online, there is something to be said for offline shopping. People will continue to buy offline because the experience is different and it allows them to leave their home to socialize, ”he said.
Associate Professor Lawrence Loh, also from NUS Business School, said a “radical transformation” is needed to save department stores that have reached a point of no return after bleeding revenues over the past few years.
“It’s a constant and perennial lesson for all outlets, large and small: the small window for change is now or never.”
