APRCE Day 1 Recap: Change, Design and Risk

The 17th Asia Pacific Retailers Convention & Exhibition (APRCE) started in Manila, Philippines on 29th October 2015. It was launched with a warm welcome by the hosts–PRA president, FAPRA chairman, APRCE chairman, and the Secretary of the Department of Trade and Industry–as well as H.E. Benigno S. Aquino III, President of the Republic of the Philippines. Asia Fast Forward was a key theme of the conference. “Change, Design and Risk” was the highlight of the first day, emphasizing learning and adaptation as key drivers to ensure the survival and sustainable growth of the retail business.

Adapting to your customers

Alan O’Neill, the Managing Director of Kara (Ireland) brought Selfridges, one of the world’s longest-running department stores, to attention. Since Selfridges was introduced in London over a hundred years ago in 1909, it has gone through some tough transition periods before emerging in the strong position it maintains today. Changes involved external, sociological factors—chiefly the evolution of its customers and their level of education, age range and ethnic diversity—and fast-paced technological advancements which have created both great opportunity and pressure in the retail environment. Another difficult transition involved adapting the internal company culture to suit contemporary needs. Understanding customer demands is no longer sufficient; today’s retailers must pay more attention to their “people culture” to create a pleasant working environment. It may be time to clear the clutter and go back to basics, guided by careful strategic planning designed to develop higher performance.

Maximizing your store assets

“It’s not what you sell, it’s how you sell”. A panel composed of Mr. Simon Ong of Kingsmen Creatives (Singapore), Ms. Maja Olivares of Sonia Santiago-Olivares & Associates (Philippines), and Mr. Hubert de Malherbe of Malherbe Retail Design (France) discussed store design and trends changing the retail landscape. Successful retailers harmonize their store designs so that they develop in the same aesthetic direction. Stores must not only look appealing, but their visual design should speak the same language, seamlessly communicating a sense of cohesiveness. Stores are not merely physical spaces to house products – they should also inspire customers to shop and try, and in that sense, reach beyond the boundaries of an ordinary store. Interactive fitting rooms could be integrated and new technological touches introduced, such as enabling customers to browse on a screen through all the items in a collection or to try them on without having to change their clothes.

Panelists also discussed the integration of Asian design into Western retail concepts, such as the blending of local design elements at Starbucks outlets in India and China or McDonald’s in Vietnam. Altered brand positioning is another interesting dimension. For example, Marks & Spencer (M&S) is positioned in the mid-price range in the UK, but in Asia its positioning landed at the higher-end of the branding scale. Selected Family Mart stores in Manila have also evolved from regular-standard convenience stores to more upscale versions.

Big dreams, big building in South Korea

Mr. Hyun Chul Park of  Lotte Corporationsaid that when many people think of Lotte, they think of food or snacks. However, over half of the company’s revenue is generated from construction while less than half is generated by retail. Lotte is now the 5th largest conglomerate in Korea. Its next big project is construction of the Lotte Tower, to become a new Korean landmark for leisure, entertainment, shopping and dining, and which aims to be the tallest building in Asia in 2016. This new Lotte Tower expects to serve over a million domestic and international visitors per year.

Minimizing risk in China

Risk is a critical element that retailers are always working to control, prevent and minimize. The Chairman of Board Beijing Capital Retailing Group (China) emphasized that, before all else in retail, risks must be identified. Over a hundred stores closed down during the first half of 2015 in China due to risk factors ranging from incorrect positioning, insufficient operating resources and poor management. Once identified, action should be taken to prevent and control risk through quality investment decisions, continually improving team management efficiency and studying new and innovative business models. Last but not least is implementation of the appropriate approach to reduce risk. This involves planning, continually evolving business models and services, and exploring opportunities for collaboration with prospective business partners in order to understand the commercial culture in China.