'Retailers must revamp'
Earlier this month, Mr R. Dhinakaran became the new president of the Singapore Retailers Association. TNP speaks to the veteran businessman about the challenges faced by retailers in the current economy
Challenging times are ahead for retailers, with some of them, even major brands, closing shop and pulling out of Singapore, said Mr R. Dhinakaran, who is in his 60s.
The managing director of Jay Gee Melwani Group, which manages brands such as Levi's, Aldo, and Converse, was appointed the new president of the Singapore Retailers Association (SRA) after Ms Jannie Chan stepped down early this month.
"I'm taking over at the worst time... and I hope to protect and safeguard the interests of retailers," he told The Straits Times after the appointment.
Mr Dhinakaran, who has been in retail for more than 30 years, believes the local retail industry needs to make major reforms for Singapore to retain its title as a "shoppers' paradise".
He said: "The retail sector has evolved greatly. Many larger retailers have suffered as a result of over-expansion in recent years and are currently downsizing.
"The industry we see today is a much more challenging one than what we saw previously. Essentially, retailers need to revamp, readjust and retool."
STRUCTURAL REFORM
The retail sector has been gloomy since 2013, but what makes this dip different from previous years is that it is not caused by a particular crisis, such as the 2003 severe acute respiratory syndrome (Sars) epidemic, and the 2001 and 2007 recessions.
"The industry is currently affected not only by external factors, but also by fundamental structural problems," said Mr Dhinakaran.
He highlighted the tight manpower market as one of the key issues, with fewer younger Singaporeans joining the retail sector. Another is high rental costs, with real estate investment trusts (Reits) that run many shopping malls here, pressuring the mall managers to raise rents for higher returns.
He said: "Going forward, this is the long-term reality and retailers must consider their next moves carefully. How can we meet these structural challenges in a more positive manner?
"These issues are new, and we have never faced them before. We must strategise for the long term with these challenges in mind".
CHANGING PATTERNS
The retail experience has changed through the years, and mindsets need to change with it, said Mr Dhinakaran.
"Many years ago, a salesman would guide the customer through the whole purchasing experience, and even follow up by offering after-sales service," he said.
"Now, customers come into the store knowing more about the products than the retail staff, because they have done their research online."
He added that retailers needed to adapt to these changing patterns, and turning to e-commerce and technology was one way.
E-COMMERCE AND TECHNOLOGY
Retailers can't run away from e-commerce and technology, said Mr Dhinakaran.
Those with brick-and-mortar stores have to find a way to go online, and vice versa for those who have just an online presence.
"With the advent of e-commerce, successful retailers must have a hybrid system.
"They must exploit their brick-and-mortar stores, leverage on technology, and expand on e-commerce platforms with click and collect options," he said.
INDUSTRY FEEDBACK
Mr Dhinakaran believes that constantly gathering feedback about retailers' struggles in these challenging times will help.
"One of my goals as SRA president is to have frequent feedback sessions for retailers. We will take their feedback to the Government and relevant agencies to seek assistance," he said.
These could include labour issues, productivity matters, and research on the retail industry's practices.
He also encouraged more small and medium-sized enterprises to join the SRA to leverage on industry support and knowledge sharing.
"Now, customers come into the store knowing more about the products than the retail staff, because they have done their research online."
- Mr R. Dhinakaran
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