The great retail migration

Businesses are jumping online because of Covid-19, but with a view to driving shoppers back to physical retail spaces

Moving online is the new frontier for brands and businesses and the debilitating impact of Covid-19 has made the process only more urgent.

Amid news of major retail closures around the world, department stores, malls and other traditional retailers have been criticised for being slow or clumsy to adapt digitally.

This, however, is changing. In the past few months, players in Singapore have started to make the trek online too.

In June, department store BHG Singapore launched an e-commerce store - the first in its 26-year history.

More than 170 home-grown and international brands were put online, including cosmetics, home and living products, electronics, kitchenware and toys.

A digital transformation is the first phase in a three-year reinvention plan for the company, said BHG's chief financial officer, Mr Jheeva Subramanian, in a press release. "We see our e-commerce store as our sixth store and believe this launch blurs the lines of online and offline shopping to capture our customers' attention."

Meanwhile, Robinsons and Marks & Spencer, which already had their own websites, went live with added storefronts on e-commerce platform Lazada in April.

Shoppers can browse authenticated products from each store's assortment of brands via their LazMall stores.

Retailers and consumers alike benefit from Lazada's campaigns and sales throughout the year, says Lazada's chief executive officer, Mr James Chang.

"While foot traffic to retail stores might take some time to resume, we have the capability to host these mega sales, which will support them in staying relevant."


Indeed, many retailers are now teaming up with third-party e-commerce players. The likes of Lazada, Qoo10 and Shopee report an increasing migration of traditional brick-and-mortar retailers onto their platforms.

From January to May this year, Lazada added eight times the number of sellers it did in the same period last year, with department stores being notable additions to the platform's portfolio.

Alongside Robinsons and Marks & Spencer, retail chains Popular bookstore and Mothercare also came on board in April.

Qoo10 saw its rate of onboarding more than double from January to June, compared with the same period last year.

New retailers that joined include clothing brand Giordano, optical retailer Capitol Optical and local fish farm 75 Fishery.

Mr Sam Too, general manager at Qoo10, attributes the trend partly to a government grant by Enterprise Singapore (ESG).

ESG launched the E-Commerce Booster Package in April, to help brick-and-mortar retailers and heartland enterprises diversify and reach new audiences.

The package partners Amazon, Lazada Singapore, Qoo10 and Shopee to support eligible local retailers with a one-time grant.

They can engage one of the four platforms to receive help in services such as product photoshoots and advertising.

It has aided merchants who were new to online commerce to cross "the first hurdle", says Mr Too.

"Before, many offline retailers complained about their lack of digital assets - well-designed thumbnails and professional product images," he says, adding that Qoo10 recommends that brands include three to five images for every product.

They also faced novel challenges such as adjusting their business operations to manage offline-online inventory, order fulfilment and printing waybills - documents attached to parcels before they are sent out for delivery.

Outside the grant, established brands with existing e-commerce sites are more willing to explore new online channels now, including Facebook Live, he adds.

Shopee echoed similar observations.

The platform declined to share numbers, but says it "supported a significant number of sellers in their shift towards a digital-first business strategy" in this period.

It brought on brands including City Chain Stores, Aldo, Converse, and Lee Hwa Jewellery.

A lack of know-how is a major obstacle to digitalisation for most traditional retailers, says Shopee's chief commercial officer, Mr Zhou Junjie.

"We ensure sellers are on-boarded onto our platform as seamlessly as possible, through a range of support programmes, including a comprehensive incubation programme and logistics support designed to facilitate a quick and easy transition onto Shopee," adds Mr Zhou.

Sellers on the platform also benefit from regular campaigns that spotlight brands - such as the Shopee Brands Festival, which features daily deals on select brands and retail partners.

For department store Metro, which partnered Lazada in November last year during the Black Friday sale, a first-mover advantage has paid off.

Head of marketing and merchandising controller Erwin Wuysang-Oei says the company was well prepared for the pandemic and circuit breaker.

Reflecting on the head-start, he says: "Adopting an omnichannel and customer-centric approach seamlessly synthesises interdependent touchpoints. For example, customers may want to see and touch a product at the store before buying it online as they do not want to carry it home.

"After that, there is the convenience of exchanging products they bought on LazMall at one of the Metro outlets.

"This year, daily traffic to our LazMall store tripled as a result of evolving shopping behaviour."


"Omnichannel" may well be the new buzzword in pandemic-era retail. Beyond just selling online, some players are finding new ways to leverage e-commerce and boost physical sales too.

This month, Marina Square went on board Lazada as the platform's first shopping mall, working with its tenants to create a virtual mall on the app.

More than 30 tenants have been taken onboard. However, the only products available at present on the Marina Square LazMall store are e-vouchers from tenants without LazMall stores - such as a $10 Zara voucher priced at $6, which shoppers must redeem in person.

The e-vouchers aim to encourage online purchases that could drive traffic back to retail stores, says Mr Chang. Once there, it might even lead to more in-person shopping at other brands in the mall.

Although not new, the concept of digital goods - products transacted digitally that can take the form of vouchers, gift cards and credits - has taken off during Covid-19, says Mr Chang.

Sales of e-vouchers last month tripled that of February's, while traffic to such merchants quadrupled.

The partnership with Marina Square is "a unique one", he adds.

"For tenants with existing LazMall stores, the Marina Square LazMall page serves as a traffic driver to those pages and showcases products from them. For those without (such as fashion labels Zara and Massimo Dutti), the LazMall store sells e-vouchers that can be redeemed within Marina Square.

"This online-to-offline strategy can help provide immediate cash flow for tenants, while driving customers back to their physical stores as we transition into phase two of Singapore's reopening."

Similarly, prioritising omnichannel retail, CapitaLand chose to fly solo with its own e-commerce platforms.

The retail landlord launched two digital platforms on June 1 - eCapitaMall that focuses on goods and services from its tenants; and food-ordering platform Capita3Eats.

Since launching, both platforms have signed on more than 280 online merchants combined from CapitaLand's network of malls, which includes Junction 8 and Raffles City Shopping Centre, and are on track to get on board 500 online merchants by the end of the year.

Mr Chris Chong, managing director of CapitaLand retail in Singapore, says: "The twin digital platforms help our retailers reach out to more consumers and access online business opportunities 24/7. This complements retailers' physical store sales and helps to expand their online presence."

Shoppers benefit from the convenience of being able to browse online first and plan their shopping trips in advance. They can also earn and spend loyalty points via the CapitaStar app.

Mr Chong adds: "The points earned on eCapitaMall and Capita3Eats can be used in CapitaLand malls and vice versa, creating a virtuous circle of online and offline spending in CapitaLand's retail ecosystem.

"Going online also means they are not restricted to merchants from one mall, but can now shop from all the malls in our physical network."

Of the massive effort, he notes that CapitaLand has been advocating omnichannel retail for a number of years, but had to manage tenants who "were slower in incorporating a digital strategy into their business models, perhaps due to a lack of digital capabilities or impetus to do so".

"With Covid-19, the shift towards omnichannel retail has accelerated," he says, adding that CapitaLand plans to launch its first live-stream "shoppertainment" show in the coming months.

As for Marina Square, it was Lazada's "intuitive user interface" and experience as an e-commerce platform in South-east Asia that led the mall to partner them, says a spokesman for the mall.

"Lazada seemed like a good match to complement our brand, given its strong customer base, including shopaholics and bargain hunters who are attracted to vouchers and flash deals.

"Leveraging on their platform allows us to see eye to eye on fundamentals such as ensuring consumers enjoy a pleasant and smooth shopping experience."

Housewife Ang Siew Hoon, 43, likes the options she now has.

"I do my shopping at Metro when it has a sale. During the circuit breaker, I needed a new pot, but the malls were closed. I saw a set on promotion at the Metro store on Lazada during the recent mid-year festival sale and bought it. I received it within two days and I didn't even have to leave the house."

Others, like Madam Teo Keng Eng, 58, are still hesitant about shopping at old-school retailers on apps.

The office administrator, who was enticed by a sale and recently made a trip to Robinsons, says: "I'm open to shopping via Lazada during the members-only sales, but only if the vouchers work and if there are more photos of the products to see."

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A version of this article appeared in the print edition of The Straits Times on July 17, 2020, with the headline The great retail migration. Subscribe