When Sasa announced closure of its Taiwan outlets in February 2018, I asked its Singapore office if Singapore would be affected. The official statement brushed off the idea, pointing to the opening of a new concept store, modelled after its “successful predecessor” at Causeway Point that opened in October 2017.
This week, less than two years later, the house of cards came crashing down. The cosmetics retailer announced it will be closing all 22 stores in Singapore, citing “less than satisfactory” performance of six-year losses.
As a beauty editor and an industry observer, I was not surprised by the closure at all.
NOT BECAUSE OF THE RISE OF E-COMMERCE - When the news broke, many netizens pointed to high rental rates as the main cause. But while Singapore’s retail malls charge notoriously high prices, I don’t think these are the chief culprits in this saga.
After all, successful beauty retailers take up huge physical retail spaces in upscale districts. Sephora opened a 5,300 sq ft outlet in Westgate in 2018 and, after a two-month renovation, re-opened its Ngee Ann City outlet.
Watsons also recently revamped its 7,000 sq ft flagship store in Ngee Ann City, with most of the space dedicated to displaying beauty products. So what were other retailers doing right? Where did Sasa come up short?
1. NO FUN EXPERIENCES - The beauty landscape in Singapore is competitive. Consumers are exposed to international trends, savvy about how to get hold of products to achieve trending looks, and have enough to set aside a substantial budget.
The discerning beauty shopper now looks for more hands-on experiences with brands and products.
With so many options at their fingertips, consumers are inclined towards retailers they can try on and experiment with – and will return for more if they have a good experience.
This is why retail spaces are still important as far as cosmetics is concerned.
The reopened Sephora Ngee Ann City, for instance, introduces new features such as a fragrance discovery bar, a beauty studio that offers personalized consultations, including a skin analysis app.
Guardian also opened a concept store at Ang Mo Kio Hub, with a layout that highlights the beauty brands it stocks. Featuring lit-up mirrors, wider aisles, and tissues and cotton pads to facilitate trials, the retailer is definitely trying to please beauty consumers.
In comparison, Sasa’s traditional layout with narrow aisles doesn’t make it easy to explore the offerings in-store. Store assistants are more pushy sales representatives than beauty consultants who can help consumers discover and find the right products.
2. BRANDS THAT DO NOT EXCITE CONSUMERS - Given that beauty consumers in Singapore are savvy, the line-up a beauty retailer offers can be a make-or-break. Bringing in trendy brands encourages consumers to visit more frequently.
Sephora brings in new Western brands regularly. Most recently, it introduced Charlotte Tilbury Beauty, one of the most sought-after international brands well-loved by celebrities.
Earlier this year, Sephora also introduced a good mix of brands with cult followings worldwide, including luxury brands (e.g. Pat McGrath), clean beauty brands (e.g. Biossance), and up-and-coming indie brands (e.g. BYBI Beauty).
Sasa had a good opportunity to corner the Asian brand market, particularly since Korean beauty is such a big trend in Singapore.
However, while it has managed to stock popular Korean brands like Banila Co. and Chosungah22, the retailer failed to drive marketing and ride on the hype.
In fact, if you were to ask around, most people wouldn’t know Sasa carries these brands.
Guardian, however, recognised this gap and is eagerly filling it. In the last few years, the retailer has been turning its focus on bringing in exciting K-beauty brands to Singapore.
In September alone, it announced the availability of 14 new, popular Korean brands in its stores including By Wishtrend, Huxley, Dear, Klairs, and I’m Meme.
Just last month, Guardian also announced a partnership with Olive Young, the largest health and beauty retailer in South Korea, to bring a “Myeongdong Street” beauty shopping experience to local consumers.
Guardian launched this collaboration with a pop-up event in ION Orchard featuring four Olive Young house brands previously unavailable in Singapore.
If you ask me, Guardian is definitely playing its cards right.
3. POOR CUSTOMER RELATIONS - Given the wide variety of options in Singapore, retailers are out of mind when they are out of sight. Successful beauty brands and retailers are investing in public relations (PR) and marketing to amplify their messages on different platforms – especially online ones – so that their target audience always has them in mind.
Compared to many beauty brands and retailers in Singapore, Sasa is awfully quiet in the digital space, where a lot of product discovery, conversations, and purchase decisions are made.
PR and marketing can also come in the form of strong loyalty programs. Sephora, for instance, offers more than loyalty points for its members. Members in the highest tiers are also given birthday gifts, early access to private sales, invitations to exclusive events and launches, and custom makeovers.
4. POOR ONLINE PRESENCE - Sasa also has a weak online presence. Case in point: Watsons Singapore has more than 50,000 followers on Instagram. That’s almost four times more than Sasa, which only has 13,900 followers.
Brands exclusive to Sasa such as Suisse Programme, Dr. G and Cyber Colors also do not seem to draw online discussions.
Almost 63 per cent of respondents said that they will not consider buying a product if they are unable to find online reviews, according to the Daily Vanity Consumer Survey 2019.
Respondents specifically mentioned Google and Instagram as two of the top online platforms they search for product reviews on.
5. OLD MARKETING TECHNIQUES - Sasa had focused more on tactical marketing – through attractive prices and regular promotions. However, price-sensitive consumers attracted by these can turn to other retailers like Venus Beauty, which offers competitive pricing with parallel imports, or even platforms like Carousell for budget buys.
Sasa did not manage to read the writing on the wall early enough to evolve with the times, build on its strengths, and seize opportunities.
The beauty retail space is changing so rapidly, it can be a boon for some but a bane for others like Sasa. Complacency can be terminal. They must constantly keep up with the evolving preferences of consumers.
Sasa has said that it will focus on its Malaysia market, which has a higher potential for further development for the retailer. But it has to remember that Singapore is often seen as a bellwether for future trends regional counterparts will eventually experience.
Sasa should learn from the mistakes made in Singapore to have a shot at making it big in Malaysia.
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