ULI MEMBER-ONLY CONTENT: In the best of times, a retailer that strives to provide incredible service, differentiated offerings, and rich experiences will, more often than not, find success. Conversely, in the midst of a global pandemic, one that has curbed travel and consumer activity and decimated retail revenues, these fundamentals to success are the keys to drawing customers back into stores.
This is according to Ariane Zagury, founder and CEO of the Rue Madame Fashion Group (RMFG), who spoke at the ULI Asia Pacific Leadership Convivium, a ULI full member event conducted virtually in early November with limited in-person programming.
In a session titled “Retail: Where Do Bricks and Mortar Go from Here? What Will the Retail Experience of the Future Look Like?” Zagury shared her experience of engaging with customers, both offline and online, during the COVID-19 pandemic and how working with understanding landlords has helped create win/win outcomes.
Launched in 2010, Hong Kong–based RMFG operates multilabel stores under the name of Rue Madame and Clémence, distributing Europe-based contemporary and affordable luxury fashion labels, such as American Vintage, Hobbs, Phase Eight, and Whistles, and women’s activewear brand Sweaty Betty, in Asia.
As of 2020, RMFG operates 35 stores across Hong Kong, Macau, and Singapore, with many located within prominent shopping malls.
In order to cope with the challenges brought on by the pandemic, RMFG has focused more on getting closer to its local and loyal clientele, integrating both offline and online channels, and building a stronger relationship with customers in the process.
“It’s been extremely difficult, obviously, because people have not been keen to shop [during the pandemic],” said Zagury. “The more touristy kind of business is postponed for nobody really knows how long. This is not a two-month crisis but a very, very long one. So, you need to be close to your clientele. Going forward, keeping a strong focus on the local market is very important.”
While RMFG has operated both in the online and offline spaces, the pandemic has “accelerated everything, in terms of making [these channels] seamless and very integrated together,” said Zagury. “There was just no other option.”
For the fashion group, the basics of a compelling product offering, great service, and rich experiences have had to apply to both its physical stores and its online presence. In the physical realm, customers can still do in-store pickup or returns.
“We are also doing some work to help people if we have something that isn’t available in store. Our staff offers to help the client order online and get it delivered,” said Zagury.
She added that online storefronts that have been carefully cultivated, with beautiful visuals and beautiful brand image, can not only generate online sales but also help drive business back to physical stores.
For example, RMFG’s “athleisure” brand Sweaty Betty offers a range of online services, such as free fitness classes, that help reinforce the brand/client relationship.
The biggest challenge that Zagury has identified is in customizing product offerings and messaging to different client segments. It requires “a lot of work on the back end to make sure that your digital world is very well integrated,” she said. “There are still challenges to integrate, to be aligned, and to get the right message to the right type of client.”
Another challenge faced by retailers in 2020 has been working hand in hand with landlords in the midst of a revenue crunch. Zagury believes that the actions of some landlords help keep retailers afloat and preserve value, while the actions of others have a negative long-term impact.
“There are two types of landlords—the ones that have been standing out and coming forward to have very constructive discussions with tenants, and the ones that don’t speak openly,” said Zagury, who believes that transparency in the company governance of landlords is needed to maintain value and mall quality.
“In order for us to stay [in a location] and keep operating, we need incredibly favorable terms. When we have a win/win relationship in place, we trust that we will be able to work together [with these landlords] no matter what happens. If not, we are leaving,” she said.
Looking at the future of retail, which may have arrived sooner than expected, Zagury is aware of expectations of the clientele that has grown accustomed to fast and convenient online shopping.
Customers no longer need to go to brick-and-mortar stores to buy products when they can do so with a few touches on their smartphones.
“Especially in our market, where we basically are selling products that women buy as a pleasure but that they mostly don’t truly need. So, we are the [retail] experience provider. To be honest, that’s our job more than anything,” she said.
Providing specific and differentiated product offers, maintaining a close relationship with customers, and wowing them with incredible service will be the key to clients wanting to return. It will not be an easy task, Zagury feels, since it requires a high level of performance from a retailer’s staff day in, day out.
“I still think there will be winners, big winners,” she said of businesses that are adjusting to the post-COVID reality of retail.
“You need a very differentiated offer and extremely good service, but also a very strict financial strategy. At the end of the day, you can have the most beautiful product, but if your business is not profitable, there is no way you’re going to come out of this well.”