SINGAPORE — In about two weeks’ time, shoppers visiting the second and third levels of TANGS’ flagship store at Orchard Road will find half the space blocked out of view, but they will hear the clatter from renovation works that are expected to last until Christmas.

At one of Singapore’s oldest and best-known department stores, telltale signs of transformation abound as the retailer looks for ways to hold its own amid intense competition not only from swanky new malls in and out of town, but also the rising presence of the online sphere.

“The pervasiveness of the Internet has turned everything upside down,” CK Tang chief executive Foo Tiang Sooi said in an interview with TODAY. “This is a trend that’s really picked up pace in the last three years. Before that, tablets were a novelty; now, consumers are now able to conduct their own research and purchase on mobile devices or home computers,”

“But physical shopping still has its place. Many consumers still see it as a socialising activity with friends; to others, it can be an entertainment,” he added. “What individual retailers must do to survive in this new world is to understand what consumers want and behave, and then respond accordingly.”

Part of TANGS’ answer to the challenges is a three-year S$45 million enhancement project launched in 2012 that it hopes will offer a stronger boutique experience.

“The overall objective is to offer a more personal and interactive shopping experience at our physical store, because this business is not just transactional anymore,” Mr Foo said, adding that its corporate office on the seventh floor has now been transformed into a wellness centre with spas and salons.

But TANGS’ way forward will not be a walk in the park, at a time when the physical retail space is increasingly besieged by the growing volume and sophistication of online shops.

Said Ms Loh Pei Ying, a research analyst at Euromonitor International: “Many online retailers have been launching new collections of products, such as personal accessories, apparel and footwear, often enough to attract consumers to purchase through online channels. Online retailers have also drawn consumers’ attention with their customised shopping experience, such as introducing products to suit each consumer’s preference.”

“So consumers are (finding it easier to access) products through online channels at cheaper prices with unique online shopping experiences,” she said, adding that consumers spent S$960.3 million on e-shopping last year, up 12.3 per cent from S$855.4 million in 2012.

As challenges from the digital space mount, having an online platform is becoming a must for physical retailers in Singapore, Ms Loh said: “With an online platform, retailers will be able to identify consumer preferences and apply them to the physical retail environment to offer products that suit consumers’ preferences identified via the online platform.”

This is one area where TANGS is still learning its steps, Mr Foo said.

“Before 2012, we didn’t really have an online sales channel. Since then we’ve set up an e-store for some of our products, but the business volume is still small … We want to strengthen the e-store, and more importantly improve its integration with our physical stores. It’s a work in progress and it’s not easy, but we will face this challenge head-on.”

Mr Foo’s confidence befits a household name whose first store was opened along River Valley Road in the 1930s and has endured numerous ups and downs, including controversies surrounding the voluntary delisting of CK Tang in 2009 after 34 years as a public company. Although reports have speculated on the possible redevelopment of the Tangs Plaza site after the company went private, these have since given way to reports of investments to re-energise its retail operations.

But Mr Foo knows stiffer challenges still lie ahead, as the company now faces an unprecedented growth of shopping malls in Singapore.

“Shopping floor area has increased tremendously, by eight- to 10-fold in the past 10 years in terms of square footage. The increase is coming from everywhere: Orchard itself has been seeing new malls spring up in the past few years, same with Marina Bay,” said Mr Foo. “And then you have the emergence of new suburban malls, which on top of their heartland offerings are also beginning to bring in elite brands and target high-street consumers.”

The intense competition, coupled with rising wages and rental costs, has hurt a handful of retailers in Singapore. In February, Japanese department store Parco shuttered the doors of its outlet at Millenia Walk. This followed Carrefour’s announcement in 2012 of the end of its business here after nearly 15 years.

But Mr Foo believes TANGS, which has two stores here and three more in Malaysia, is well positioned to weather the storm ahead.

“We are not opening a new store any time soon. Right now we want to focus on getting our omnichannel strategies right,” he said. “If we can do that, to offer the best product and experience that our customers want, we can enhance the brand we already have — one that has a long history, is well-loved and resonates with the population.”