Make Orchard Road great again

The government announced last week that it was looking at ways to refresh the Orchard Road streetscape to make it more pedestrian-friendly as part of the efforts to remake Singapore’s once-famed shoppers’ paradise.

The statistics for retailers on the prime shopping street are grim. Vacancy rates in the Orchard Road area hit 8.8 per cent in the first quarter of 2016 – the highest in five years, and 1.5 per cent above the island-wide average of 7.3 per cent.

In some malls, entire stretches of store fronts are boarded up, while others are engaging in renovations in a bid to attract more shoppers. The reduced footfall is palpable.

So why don’t Singaporeans shop at Orchard Road anymore?

The simple answer is that they don’t have to. Suburban malls are increasingly bringing the entire Orchard Road experience to the doorstep of most Singaporeans. International brands, department stores, and popular fast fashion and F&B chains which were once available exclusively in the city centre have spread island-wide.

A recent online survey by NUS Business School found that two-thirds of shoppers felt Orchard Road was losing its attractiveness as a retail destination, and six in 10 said they preferred to shop at malls nearer their homes. Most of the respondents felt that suburban malls are increasingly similar to malls in Orchard Road and that the Great Singapore Sale is losing its attractiveness due to discounts all year round by many retailers.

Now many annual sale events everyone looks forward to are online: Singles Day, Black Friday and Cyber Monday.

Indeed increasingly, e-commerce provides shoppers with a compelling alternative, especially in retail categories like fashion with lower or no shipping costs, free returns, and a large selection of products.

So if we understand the reasons why people aren’t going to Orchard Road, what are the reasons they do go and what can we learn from them? Here are some potential avenues of opportunity our survey revealed.

A SOCIAL EXPERIENCE

For many, a trip to Orchard Road is a fundamentally different kind of outing than to a suburban mall or a mall near the workplace. Where malls near home are places to grab necessities, eight in 10 said Orchard Road was a place to meet their friends.

They add that they would frequent Orchard Road more if malls had more open public spaces and entertainment options such as theatres and concerts.

With this in mind, mall managers should consider ways to design malls with more spaces to gather, sign on tenants which provide social experiences beyond shopping, and hold events which can boost the social experience.

To capitalise on this, the Orchard Road Business Association should work on creating linkages across malls to allow people to move seamlessly from mall to mall, and to coordinate the different malls to provide compelling retail mixes with powerful shopping themes.

Singaporeans are willing to travel to eat good food, so unique F&B offerings not available in suburban malls can be another draw to Orchard Road.

In our survey, two-thirds of the respondents say they go to Orchard Road just to dine at an F&B establishment not available close to home.

Orchard Road mall operators might therefore consider bringing in higher end F&B establishments such as celebrity chef or Michelin star restaurants, unique theme restaurants like Harry Potter, restaurants with special settings or unique, specialty cuisines.

Orchard Road has traditionally been where large international brands park their flagship stores. But with competition from local malls and online platforms, flagship stores cannot afford to be simply larger versions of a typical outlet.

One option may lie in so-called omnichannel retailing, where mall operators encourage dominant retailers of technical or electronic and beauty products to set up showrooms showcasing new products for customers to explore and then place their orders online using touchpads provided in the stores.

Another option is to go beyond international brands and seek out promising up and coming brands or designer fashion, such as those from Korea and China, to set up flagship stores in the malls, thus providing an offering not available in the suburban malls.

The government’s efforts to make Orchard Road more pedestrian-friendly can help make shoppers’ experience more pleasant. But ultimately, it is the retailers who must rise to the challenge and stand out from cookie-cutter malls in the suburbs.

Providing unique recreational, dining, shopping, mall hopping, and social experiences that will compel locals to make the trip downtown - or tourists to come here for something they cannot find back home - is the only way for the strip to remain a shoppers’ haven.

ABOUT THE WRITERS

Lau Geok Theng is Associate Professor in the Department of Marketing at National University of Singapore (NUS) Business School. Natalie Wong was a BBA Honours student in NUS Business School. The opinions expressed are those of the writers and do not represent the views and opinions of NUS.