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​E-store to real store

Published on: 07-Sep-2019

Despite the gloomy retail scene, online brands have opened brick-and-mortar outlets to meet demand from customers

In the face of competition from e-commerce in recent years, many retailers have gone online to reach more consumers.

But a handful of online brands are going the other direction, opening brick-and-mortar stores to showcase their products.

It started with the fashion blogshops and indie fashion labels. Then, the lifestyle and home furnishing brands followed suit.

The latest online retailer to venture offline here is Chinese e-commerce platform Taobao, which opened its first South-east Asia store in Funan mall on Wednesday.

At least four home-grown lifestyle and furniture brands that started online have also gone physical.

Homeware retailer Iuiga, known for its minimalist designs and affordable prices, started with a website and mobile app in August 2017, but now has five physical stores, including in Funan and Paya Lebar Quarter, the two newest malls here.

The same month, the brand had a pop-up store at SingPost Centre in Paya Lebar. It was meant to be short term, but a spokesman tells The Straits Times the brand extended its lease because of overwhelming reception. The store is still in business today.

One of the biggest draws of having a physical store is that it allows consumers to check a product's quality before making a purchase - particularly when it comes to more expensive items.

Iuiga's flagship store at Tampines stocks a wide range of furniture pieces, with prices from $129.90 for a beanbag to $1,899 for a bed frame.

Iuiga's digital strategist Poh Wey Lynn says: "The stores are showrooms for our products - you can touch each item. This is very important as it's hard for us to convey the quality of the goods via a screen."

The retailer will open another pop-up store later this month in Wheelock Place. It is set to run for six months and may be extended depending on how well it does.

Iuiga aims to have at least 10 stores by year-end. Ms Poh says 80 per cent of its current sales come from its retail outlets. Prices are the same offline and online.

While Iuiga declines to reveal its earnings in past years, it projects that its revenue will hit $10 million this year.

But Ms Poh adds that Iuiga is still primarily an e-commerce brand. To make a purchase at the physical store, customers have to first sign up for an online account.

China's Taobao says its Funan store aims to introduce quality Chinese-made products to Singapore consumers.

It also wants to shake up the traditional way of buying furniture. Called Taobao Store by Virmall, it has a complimentary virtual-reality service that lets shoppers visualise how a piece of Taobao furniture will look like in their homes, using digital mock-ups.

"Typically, shoppers have to measure the room and furniture and imagine what a piece will look like. They can't see different colour combinations and they are never really sure if it goes well in the space," says Mr Sky Chen, Virmall's general manager, who heads the local firm that helps to curate and bring in products from merchants on Taobao.

Another home-grown furniture brand that has set up shop is Castlery, which started online in 2013. It now has two showrooms in Jit Poh Building in Keppel Road and the Grandstand mall in Turf Club Road. A Castlery spokesman says physical retail accounts for 40 per cent of total sales, with the rest coming from online.

Multi-label lifestyle retailer Naiise, which started online in 2013, now has three stores, including a 9,500 sq ft shop at Jewel Changi Airport.

Home-grown furniture retailer HipVan, which also started online in 2013, opened a 10,600 sq ft flagship store at The Cathay in Handy Road in 2017. The store closed earlier this year and its spokesman said "the initial success drove us to look for a bigger space".

While having a physical store may strengthen a brand's presence, experts caution that online success may not translate offline.

"(Running a physical store) is different from managing an online store. There is a different set of critical success factors such as location, merchandising and visual display, which these online retailers may not be ready for," says Dr Lynda Wee, adjunct associate professor from the marketing division at Nanyang Technological University's Nanyang Business School.

"With limited (floor) space, they need to curate merchandise, whereas online, there's no space restrictions to showcase merchandise and (shoppers can use the) search function," she adds.

Source: The Straits Times, 7 September 2019

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