Robinsons has finally shuttered after a 162-year run, leading many to sound death knells for brick-and-mortar, multilabel shopping. Online — and especially direct-to-consumer — retail is oft cited as the nail in its proverbial coffin.
E-commerce places limitless options in shoppers’ palms, and delivers them straight to their doorsteps. It holds a clear advantage over physical stores, the overheads of which are considerable; of its reported S$31 million debt, Robinsons owes its Heeren landlords over S$7 million and its staff over S$4 million.
The truth is, however, that modern consumers are not easily categorised into “online” or “brick and mortar” categories. Many of us discover new fashions on our social media feeds, yet still enjoy window shopping. What’s shifting instead is the power balance between traditional gatekeepers such as department stores, and the independent brands that used to rely on the former’s star-making power.
Department stores and multi-label boutiques were once responsible for introducing clients to new trends and designers, in the process defining aspiration for the middle classes. With the closure of tastemakers such as Paris’s Colette and New York’s Barneys and Opening Ceremony over the last decade, it’s evident that impeccable taste and customer experience no longer suffice.
“Concept stores — which promise curation and a point of view — are becoming showrooms… Stores can generate foot traffic, but they no longer own the entire customer journey from discovery to purchase. More often than not, the journey now begins online… and ends online, too,” writes The Business of Fashion’s Lauren Sherman. E-commerce, then, is where younger players have the edge.
Social media and integrated e-commerce platforms such as Shopify allow emerging companies to reach new eyeballs and capture customer data sans intermediaries. With analytics, young companies can be reactive with smaller but more frequent capsule drops. These don’t align with traditional retailers’ seasonal buying calendars, however; if a company can operate without splitting revenues with wholesale partners (i.e. department stores and multi-label boutiques), margins can be three to four times higher.
Given these efficiencies, even larger names from Adidas to Prada are moving to slash dependence on wholesale and boost direct sales.
Rising global inequality and a shrinking middle class has also made instant price comparison crucial for shoppers. Conventional retailers, who typically underinvest in e-commerce and have poorly harmonised online and in-store inventories, try the patience of information-seeking customers.
That’s not to say that old-school retail is doomed. In addition to digital sales, homegrown independents such as In Good Company, Ginlee, and Beyond the Vines have opened several standalone boutiques and continue to partner with multi-label boutiques and department stores.
Although building a robust online presence is in most cases less expensive than operating a physical store, digital marketing is increasingly competitive. Facebook’s advertisers quintupled between 2013 and 2017, for example, and targeted advertising prices have consequently skyrocketed.
Some retail partners, particularly niche or specialty stores like Asian designer emporium SocietyA, still command desirable client lists, and offer young direct-to-consumer brands an enticing shortcut to customers who prefer shopping the old-fashioned way.
Finally, while digital-native shoppers are more willing to order directly from less established brands, relying on online word-of-mouth to inform their purchases, this hasn’t supplanted the pleasures of inspecting goods in person. Physical sales channels also sidestep costly returns logistics, which are a necessary evil of e-commerce.
The real issue with traditional retail has been overexpansion, and perfunctorily filling stores for appearances’ sake with products far exceeding demand. For too long, major department stores and multi-label boutiques got away with reckless over-ordering by leveraging their (declining) clout to pressure brands into unfavourable partnerships.
Return-to-vendor (RTV) deals, in which unsold wholesale stock is returned at season’s end, displace the fallout of sluggish sales squarely onto independent brands. This has contributed to our current culture of steep discounting and diminished product value. During the Covid-19 pandemic, abruptly cancelled wholesale orders and mass RTVs devastated smaller businesses.
Consignment arrangements, meanwhile, only pay companies once a product is sold, and even then, only after the retailer’s internal stakeholders (shop floor staff, etc.) are paid. When retailers like Robinsons go into administration without notice, brands risk losing out entirely on payments due.
Clearly, the relationship between retailers and smaller fashion businesses needs to become a more equal and transparent one. Department stores must de-emphasise “experience” or playing to the capricious eyeballs (but not wallets) of shoppers, and better protect the interests of product makers.
Reduced glamour aside, fewer, smaller, and less overstuffed stores, supplemented with improved digital infrastructure — such as pick-up-and-try-on points — may ultimately be more sustainable for retailers and brands alike.