“The uncertainty plaguing the economy and the jobs market have dampened shoppers’ mood at malls in the run-up to CNY” (Little CNY Cheer for Retailers as Consumers Curb Their Spending, Rumi Hardamalani).
Much has been made of the lukewarm business experienced by retailers in the lead up to the Chinese New Year (CNY) celebrations, who are also attributing sales declines to the short gap between the Christmas and the CNY holidays as well as “the uncertainty plaguing the economy and the jobs market” (TODAY, Jan. 26), yet more information is perhaps needed to make sense of both consumer behaviours and the ability of traditional retailers to adapt to changing demands. What most would agree on, nonetheless, is that retailers who struggle the most have been caught flat-footed by e-commerce, and unless complementarities are found these struggles will only persist.
In this vein, the cited experience of home decor retailer Crate and Barrel – which has, for instance, gone digital with its communication efforts – is instructive. Without completely moving away from the physical, brick and mortar retailers will have to reach customers or to diversify their offerings through the Internet. The survival of the fittest, in other words. China’s biggest e-commerce company Alibaba, beating analyst estimates of its quarterly earnings, just increased its projection for fiscal 2017 revenue growth from 48 to 53 per cent, and more importantly through technology and increased automation it is also expanding into the traditional retail business. Its stellar performance, furthermore, is indicative of changing consumption patterns in China and beyond.
The extent to which e-commerce platforms have become more ubiquitous and profitable in Singapore deserves deeper scrutiny. In addition to the anecdotes and the interviews, figures on the split between physical and online expenditures would help retailers craft more relevant strategies, while figures at the aggregate level – from malls and their tenants, across different periods and goods or services offered – will supply actionable insights for the retailers too. Digitisation is likely to yield bigger dividends for particular retailers, whereas others will do well to review their business models, even preparing for an eventual, inevitable exit in the near future.
A version of this article was published in TODAY.