Why It Matters

Stores need a new selling point

Shoppers in Takashimaya in Ngee Ann City during Black Friday sales in Singapore on Nov 25, 2016. ST PHOTO: LIM YAOHUI

That a long queue forming outside a department store even before the sun rose could make headlines over the past weekend speaks volumes about the state of the retail sector here.

With a gloomy economic outlook for Singapore, as well as competition from overseas online and physical retailers, shoppers have been holding back on local purchases, going by falling retail sales figures.

But Robinsons drew crowds, with people queuing outside its store at The Heeren even before it opened on Black Friday last week. Robinsons said the turnout was "overwhelming".

This might have had to do with the discounts of up to 80 per cent that the department store offered.

Black Friday discounts also drew bargain-hunters to Sephora, Courts, Topshop, Harvey Norman and H&M, creating some excitement that has been lacking in the retail scene for some time now.

Retail sales, excluding sales of motor vehicles, have fallen every month since February, with the latest government data estimating a fall of 1.9 per cent in September over the same period last year. Sales last year fell 1.2 per cent over 2014.

The increased footfall on Black Friday set the tills ringing too. At Wing Tai Retail, whose brands include Topshop, Dorothy Perkins and Karen Millen, the crowd at some of its stores doubled, compared with that of normal weekends and Fridays. Sales were between two and four times better than usual, said executive director Helen Khoo.

But giving substantial discounts is not sustainable for many retailers here, especially smaller ones, as high overheads eat away at their thin profit margins.

The Government is offering aid. In September, it announced a road map to help the 21,000 retail establishments here transform their businesses and stay competitive.

This includes joining e-commerce platforms to reach out to more customers here and overseas, and engaging shoppers through mobile applications.

Black Friday may have renewed shoppers' interest in physical stores to some extent, but retailers will have to overhaul the way they work to make the buzz last longer than a day.

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A version of this article appeared in the print edition of The Straits Times on November 29, 2016, with the headline Stores need a new selling point. Subscribe