H&M Singapore will be closing its store in ION Orchard as of 12 March this year, according to a banner on the official H&M Singapore website as seen by MARKETING-INTERACTIVE. The news comes after it shut down its stores in Tampines and Punggol in 2020 and 2021 respectively. With the closure, Singapore will only have eight physical H&M stores and it is unclear if the company has plans to reopen more stores locally. The news, however, is not entirely out of the blue considering that H&M announced last year that it plans to close as many as 240 stores around the world, according to media reports.
The Swedish fast fashion outlet is not the only brand to be pulling out of Singapore. In fact, just yesterday British lifestyle brand Marks & Spencer said in a Facebook post that it will be shutting down its store in Jewel Changi Airport come February 19.
Surprisingly, the news comes amidst physical retail shopping seeing a resurgence as consumers adapt to life post COVID-19. In fact, several online marketplaces which saw a rise in popularity amidst lockdowns have also faced cuts and restructures due to more shoppers heading to physical outlets to experience offline shopping. Moreover, amidst the pandemic, with retail rentals seeing a dip, several online-first brands such as Love, Bonito, jewellery store By Invite Only and bedding company SOJAO also expanded their offering into physical outlets.
According to a Milieu Insight study MARKETING-INTERACTIVE published over Chinese New Year with over 5,000 respondents from Singapore, Thailand, Vietnam, Malaysia and the Philippines, it was found that physical stores are still going to be a big part of those spending on fashion this festive season. Around 53% of those who intend to spend on fashion are most likely to be shopping in physical stores, despite the ease and convenience of online. Meanwhile, 18% intend to do so via brands’ or fashion retailers’ websites/ apps and 28% on marketplace ecommerce platforms.
Interestingly, across the region, Singapore shoppers are most likely to shop in-person (66%) versus other Southeast Asian countries.
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In a conversation with MARKETING-INTERACTIVE, Kevin Kan, the chief experience officer of Break Out Consulting Asia, a business consulting service, said that with the potential decline of sales as consumers reduce non-essential spending amidst the uncertain economy, and landlords increase rents as footfall increases, it’s not surprising that such brands are shutting stores in Singapore.
However, what it does raise is the question around what should entail the new retail experience.
According to a 2021 report by McKinsey, towards the end of the pandemic, data showed that in-store shopping is here to stay. However, the report added that the retail space will need to function differently than in the past and will require new mindsets and capabilities - especially through offering online-to-offline (O2O) services as well as acting as strategic assets in the race for same-day delivery. At the end of the day, physical stores should play an important role in the future network of an omnichannel player.
Weighing in on the matter, Rhys Taylor, the managing director of VMLY&R Singapore said that physical retail experiences cannot exist in isolation from other channels any longer. While in the past TVCs, billboards, print ads, and prime real estate were some of the few (disconnected) drivers for maximising footfall, physical stores are now part of a much more complex customer journey, he explained.
"There’s lots to consider, but three things stand out: complex consumer journeys, varied purchase triggers, and new in-store needs.”
What’s the purpose of your store?
Taylor added that in today’s world, purchase decisions can happen miles away from the brand’s outlet. Therefore, he argues that it is important to first ask why a person is in one’s store.
For example, if click and collect is a key part of your strategy, it may be much less about having a large bricks and mortar presence in a flagship location that has naturally high footfall, and more about being convenient to those customers who are visiting with stronger intent. “For example consider an Orchard boutique versus an MRT pick up kiosks for instance, depending on your business,” he said.
He continued by suggesting that if more customers are already coming to a physical store having purchased what they need, the brand then needs to question how they can cater to them differently when they arrive.
“Easy pick-ups, priority changing rooms to beat the queues and double check fit, plus a focus on feature areas and installations customers can engage with and create UGC which in turn amplifies the value of their trip on social, could make a lot more sense for your customers, and therefore your business,” he said.
Agreeing with him, Kan suggested incorporating new technology such as virtual try-ons. Rather than queuing up for a changing room to try on the latest fashion whilst in the physical store, how about doing a virtual try on which could also lead to suggestion of other products within the store.
“You could log into your account to save your preferences so that you can come back to them, or the system could make recommendations when you leave the store, giving you the option to constantly engage with your customer to come back,” he said adding:
Offering something fun, different and in a pandemic safe shopping experience is sure to get shoppers back into physical stores.
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