Another department store on Orchard Road is closing: OG Orchard Point. This comes after Robinsons’ major closure at The Heeren in December 2021. Fortunately, unlike Robinsons, OG will continue to operate at its Albert Complex and People’s Park outlets.
One of Singapore’s oldest local retailers, the closure of OG Orchard Point signals a change in the overall retail landscape. As OG stated on its Facebook page, this is part of its long-term strategy to open more outlets closer to its suburban customers.
So, is this the end of an era for department stores: the OG of retail?
Read also : Isetan to close Parkway Parade store: Do retail stores stand a chance of surviving the pandemic?
The pandemic has changed the relationship between retailers and consumers
Just as the pandemic has altered the relationship between workers and the office, it has also accelerated change for retailers and consumers. While e-commerce was not uncommon before the pandemic, the lockdown period and safe management measures propelled explosive growth in e-commerce. Retailers had few options to reach their customers without a digital presence.
Instead of being a niche option for early adopters and young people, online shopping has become mainstream. Even housewives who were strong supporters of the wet market also turned to digital options like NTUC Online and Redmart.
Once the floodgates of online shopping are open, consumers are rarely limited to in-person shopping only. This presents a challenge for traditional retailers, like department stores, which have relied on physical footfall and interaction with customers.
Read also : Guide to getting started with the digital pack for small and medium businesses
Commuter trade trend
As evidenced by OG’s planned move to suburban outlets, malls and retailers in suburban areas have fared better during the pandemic. This is likely because people were largely working from home and therefore frequenting retailers closer to home. Now that the workers are returning to work, the trend should logically be reversed.
However, OG is ditching its Orchard Point outlet location in favor of suburban outlets. This suggests that the trend toward suburban retail may not be transitory. Instead, it may herald a global shift to decentralized retail nodes instead of concentrated shopping districts.
Small retailers can benefit
According OCBC SME Index, the retail sector reverses its slight contraction in 1Q2022 to register growth in 2Q2022. This bodes well for smaller retailers who could also benefit from the suburban trend.
Additionally, smaller retailers are also likely to be more nimble in response to changing consumer preferences. They can also take advantage of government grants such as Start Digital Pack For Small And Medium Enterprises to implement digital solutions.
Retail is constantly evolving
Where a department store closes, another retailer opens in its place. Robinsons at the Heeren has been replaced by Decathlon and OG Orchard Point will make way for a new store specializing in fresh produce and groceries. Just as consumer preferences change, retailers must evolve and adapt, to try new retail formats or new distribution channels (including e-commerce).
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