BHG department stores in 'reinvention' mode, exploring new revenue streams

HOUSEHOLD name BHG Singapore is going big on "experiential" retail, digital payments and high-tech counters as it readies its business for drastic makeovers.

The department-store operator is also planning to introduce new concepts which could create new revenue streams, said chief financial officer (CFO) Jheeva Subramanian, though he declined to share more details.

Separately, there are plans as well to conduct workshops and "personalised events" at the Bugis flagship store, which just underwent a revamp in late 2020, he said in an interview with The Business Times (BT).

More or bigger BHG stores are not out of the question, either. "We would like to expand our presence in Singapore when there is a good opportunity," Mr Subramanian told BT.

The company's optimism and ambitions appear to outshine the gloom surrounding its peers. Following Robinsons' exit from Singapore's retail scene after 162 years, Metro Holdings is now mulling the fate of its remaining two stores in the city-state while Isetan is facing widening losses in its retail business.

The CFO said that ensuring BHG stays relevant has been a major challenge, especially as the global retail scene reels from the impact of the Covid-19 outbreak.

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The firm has had to "reinvent" itself to adapt to the changes in consumers' shopping habits and preferences. "For example, having an e-commerce channel is no longer just a desirable option, but an essential part of any retail business," said Mr Subramanian.

Since the company put its "reinvention" plan in motion last year - despite the constraints caused by the pandemic - there has been an increase in younger customers shopping with BHG, and sales figures were also "better-than-expected", he added.

Some of the initiatives introduced in 2020 included an updated beauty hall at the first level of the Bugis outlet, the launch of BHG's first e-commerce platform in June, training of front-end staff in digital and service skills, digitisation of the firm's human-resources system, and the introduction of environmentally sustainable carrier bags.

The Bugis beauty hall rolled out, among other things, a "beauty library" featuring nature-inspired products, mobile point-of-sale terminals that enable shoppers to make payment anywhere in the store, as well as technologies such as augmented-reality mirrors for consumers to virtually sample cosmetics in real time, artificial intelligence-assisted fragrance personalisation and a gamified rewards system.

Also debuting at the Bugis store were experiential counters, spa cabins and in-house locally designed fashion brands.

BHG's revamp is meant to be an ongoing, ever-evolving process, as the company constantly experiments and explores ways to diversify, said Mr Subramanian.

At this juncture, the strategy includes bringing in new brands and offerings, and integrating the physical and digital shopping journeys.

In addition, BHG wants to transform the way people shop at department stores, by introducing "retail theatrics, more lifestyle-based experiences, immersive brand experiences, as well as unparalleled convenience when shopping in-store and online", Mr Subramanian said.

This will entail giving all BHG stores a facelift over the next two years. The work started in 2020 with the beauty hall in Bugis.

"2021 will be a crucial year as we roll out our digital transformation strategy to achieve a unified commerce solution and update more of our stores," the CFO noted. The company is looking to invest more in its e-commerce channel to grow that business this year.

Importantly, BHG needs to be agile enough to constantly evolve its business model, according to Mr Subramanian.

At its newly opened one-stop concept store ONE Assembly - a collaboration between BHG and Raffles City Singapore (RCS) - it is experimenting with a beauty concierge room. Any of the 21 beauty brands there can use this room to offer services ranging from makeover sessions and skincare consultations to facials and eye spas.

The concept store, spanning 57,000 square feet over the first two floors of the space Robinsons previously occupied, officially opened on Feb 5 and offers an expanded repertoire of over 140 brands under one roof. RCS is owned by CapitaLand Integrated Commercial Trust and managed by CapitaLand. ONE Assembly will participate in CapitaLand's digital mall, eCapitaMall.

Though Mr Subramanian did not elaborate further on RCS's involvement, he noted that such a tie-up between a department store and landlord will hopefully pave the way for similar partnerships in the local retail scene.

Kapil Tuli, marketing professor at the Singapore Management University's (SMU) Lee Kong Chian School of Business, said last month that there might be some form of risk-sharing with the landlord.

Mr Subramanian also told BT that one of the reasons BHG undertook the ONE Assembly project was to help preserve some of the jobs lost due to Robinsons' closure - a dozen new employees have joined the company as a result of the new store.