5 Big Trends That May Haunt Singapore Retailers
The typical annual report can be a ho-hum affair, filled with corporate talk which does the job but not much else.
And then, there are some annual reports that go beyond the conventions and provide a succinct insight into their industry.
From where I stand, Hour Glass Ltd’s (SGX: AGS) annual report is worth reading every year. In particular, I look forward to reading chairman Henry Tay’s letter to shareholders. As a luxury watch retailer, his views on retail might be worth taking note.
In his latest report, Tay shared five main themes in retail:
1. Changing of the guard – click here
2. No one will be spared – click here
3. Experiences, not goods – click here
4. A shrinking share
In our previous article, we talked about the shift of consumer’s preference towards experiences, rather than goods. There are more challenges to contend with:
“To compound matters, by 2026, it is estimated that 25% of all luxury goods consumption will be online leaving physical retailing of all goods products with only 20% of the overall discretionary spend of this consumer.”
For me, the message to retailers is clear. Physical store owners who do not adapt to the shift towards experiences or online purchasing might be left with an increasingly smaller share of the overall market. Tay noted the sweeping changes that are happening in major watch groups:
“And without exception, all the major watch groups effected sweeping C-suite overhauls as a new generation of leaders are entrusted with the responsibility of injecting a fresh approach to tackling the challenges at hand.”
5. The rise of entrepreneurship
Tay also mused:
“And with an increasing number of independent dealers starting up new businesses by way of establishing a social media account, the battle traditional retailers will have is to either define and demonstrate their relevance to luxury shoppers or face their fate of retail redundancy.”
In the luxury watch space, upstart Linjer has caught the eye with its minimalist designs, matching quality, but lower prices. It is able to charge lower prices due to its lower marketing costs, and direct delivery to the customer. In the new retail world, challenges can come from entrepreneurs enabled by the internet.