Top luxury fashion houses are expecting a slowdown in 2024 globally as the €362 billion (RM1.9 trillion) personal luxury goods sector may finally hits its post-Covid bubble.
Luxury groups are also bracing for the end of the post-pandemic recovery boom as Chinese and United States consumers become more selective in their purchases.
According to a report by a global news agency last December, despite the reopening of China at the start of the 2023, the demand for personal luxury products slowed to 8 per cent at constant currency rates.
And for the first time in seven years, luxury stocks reportedly did not outperform the broader equity market.
However, Singapore’s The Shoppes at Marina Bay Sands, which is home to 270 boutiques and dining concepts including more than 170 luxury and premium brands in 19 duplexes and flagship stores, braces for the challenging year ahead, with a focus on trust and support with its tenants.
In an exclusive interview with Business Today, Marina Bay Sands Pte Ltd Retail senior vice president Hazel Chan said trust and support have been the cornerstones of the The Shoppes and its tenants over the years.
“Through all seasons, they trust in our ability to deliver the pinnacle of luxury shopping and our commitment to their business.
“Some of them have also expanded into duplex concepts to amplify client engagements by presenting an assortment of products, collections and activations,” she said.
Chan, who have worked on retail projects based in major cities such as London, Hong Kong, and Malaysia said many of these duplexes are the brands’ biggest stores with flagship concepts housing collections exclusive to The Shoppes.
Among the standout boutiques are the Louis Vuitton Island Maison, the world’s only floating LV boutique at Crystal Pavilion, and one-of-a-kind Apple store entirely surrounded by water.
The brands featured at the luxury mall include Bottega Veneta, BVLGARI, Cartier, Chanel, Gucci, Dior, Dolce & Gabbana, Hermes, Louis Vuitton, Saint Laurent, Tiffany & Co and more.
Emphasis on first-to-market concept
The premier luxury shopping destination with close to 800,000 square feet of space comprises not only luxury powerhouses, it emphasised on first-to-market concepts.
Chan said brands continue to believe in our strong value proposition and in fact, over the past year, global luxury brands have unveiled their first-to-market retail concepts with us including AMMAFFI’s first boutique in Asia Pacific, Acne Studios and Buccellati’s first boutiques in Southeast Asia, as well as Ralph’s Coffee and PUYI Optical’s first store in Singapore,” she said.
Hazel said in November, Parisian designer label Ba&sh revealed its first boutique while Singaporean luxury multi-brand outlet for children’s wear opened its newest flagship boutique, both at The Shoppes at Marina Bay Sands.
Kids21 outlet was inspired by fantastical fairgrounds, featuring popular designer brands such as Thom Browne, Christian Louboutin, Caroline Bosmans and Rick Owens, which are exclusive to the Marina Bay Sands boutique.
“Most recently, last December its Luxury Children’s Precinct unveiled Emporio Armani Junior’s new concept boutique and Burberry Kids’ first standalone store in Southeast Asia and while YSL Beauté unveiled their kiosk concept with complimentary express makeover service,” Chan said.
“Additionally, in recent months, some brands have also introduced new and exciting concepts through the revamp of their existing boutiques including Patek Philippe and TUMI.
Embracing the integrated resort concept
Chan said since its opening in 2010, integrated resort concept has been a winning formula for The Shoppes, leveraging on Marina Bay Sands’ various visitor profiles from leisure tourists to meetings, incentives, conferences, and exhibitions (MICE) delegates as well as theatre lovers and gourmands.
The Shoppes integrates entertainment through family-friendly attractions such as Digital Light Canvas by teamLab and Sampan Rides, interactive pop-up showcases by luxury powerhouses as well as evolving retail mix and dining experiences.
Among the dining experiences offered from local Singaporean cuisines, waterfront bars to wide ranges of cafés. For Singaporean flavours, visitors can tried premium dining concept JUMBO Signatures and Rasapura Masters, the latter is a food hall representing Singapore’s vibrant hawker culture through 30 unique stalls.
Le Noir and Dallas Café & Bar are for visitors who want to have waterfront bar experiences while cafes include renowned chains such as % Arabica, Bacha Coffee Fashion Avenue, PS.Cafe and TWG Tea.
“Furthermore, we continually anticipate industry trends and align our offerings to shoppers’ preferences in order to deliver first-to-market retail concepts and money-can’t-buy experiences.
Recovery of sales post-pandemic
In 2020, at the height of pandemic, which resulted in global lockdowns and the halt of international travel, there are reportedly a long list of retailers who have filed for bankruptcy.
In the United States, major retailer such as Neiman Marcus and of its oldest department store chain are among the casualties while LVMH, which is the world’s biggest luxury goods group reportedly saw 16% drop in revenues in 2020.
Asia-Pacific, which was the most impacted during the pandemic as rents for prime retail destination, have fell by an average of 17 per cent due to border closures.
However, post-pandemic see a rebound in luxury sector, with exceptional growth driven by China and the US, luxury’s biggest market.
Similarly, The Shoppes at Marina Bay Sands have also seen a significant recovery.
Chan said the luxury mall registered US$110 million (RM523.3 million) in gross revenue in H1 2023, a 30% leap from the same period in 2019.
“Mall traffic and business momentum continue to remain positive. In the first nine months of 2023 (9M 2023), we recorded a total gross revenue of US$178 million (RM848.3 million) – a sign of retailers’ confidence in Singapore and the luxury mall’s strong value proposition,” she said.
She said Malaysian shoppers have also been returning to the Shoppes, witnessed by recovery in tax-free spending.
“Malaysian shoppers’ tax-free spending has also recovered by 168 per cent in the third quarter of 2023 (3Q 2023) compared the same period in 2019.
According to tourism shopping tax refund company Global Blue, Malaysian shoppers ranked third highest in the level of tax-free tourist expenditures at The Shoppes at Marina Bay Sands in the first three quarters of 2023.
Malaysia has also more than doubled its tax-free tourist spend at the luxury mall in H1 2023, recording a 90 per cent increase in attributed sales year-on-year within the luxury fashion, watch and jewellery segments.
“This signals increased affluence and unprecedented spending power amongst high-value Malaysian shoppers.”
Marina Bay Sands’ loyalty programme, Sands Lifestyle revealed that Malaysian members prefer to shop at top-tier luxury fashion houses such as Louis Vuitton, Hermes and Chanel, based on cash spent and transaction volume.
Besides the fashion houses, watches and jewellery are also popular among Malaysian shoppers, Chan added.
Personalisation will be the future for the luxury industry
Chan, who has 28 years of experience in retail, said personalisation will continue to be an emphasis for the luxury industry in the years ahead.
One aspect of personalisation is providing experiential luxury, which in recent years have seen a trend of luxury shoppers seeking for more immersive and bespoke experiences, she added.
“They treasure intimate brand interactions that provide personalised services and VIP treatment. As such, luxury retailers around the globe are curating new forms of experiences to attract high value customers,” she said.
Among the examples are integrating experiential concepts and digital experiences outside of the traditional four walls of the boutique, or creating avatars to aid in shopper’s profiling.
As a multi-year winner of the ‘Outstanding Shopping Mall Experience’ award by the Singapore Tourism Board, she said The Shoppes provide its retail partners with a canvas to extend their creative concepts across unique spaces outside of the mall.
In 2023, the retailer witnessed numerous pop-up exhibitions staged by luxury powerhouse including Jaeger-LeCoultre’s Reverso Stories, Hermes In The Making and Louis Vuitton’s 200 Trunks, 200 Visionaries: The Exhibition.
Chanel also held its 1932 Haute Joaillerie Event in the same year for Marina Bay Sands’s VIPs and the Maison’s VICs (very important customers) at the Sands Expo & Convention Centre, where guests were treated to a private viewing of the first-to-Southeast Asia collection over dinner.
“Due to their ephemeral nature, these concepts allow brands to tell their stories in a more immersive setting and encourage customers to experience the brand in a more accessible manner,” Chan said.
Besides that, Chan said The Shoppes also focus on enhanced personal shopping services and made-to-measure offerings to strengthen consumer engagement.
Meanwhile, the luxury mall attracted the ultra-luxury customers segment through the its ‘Discover The Shoppes’ (DTS) programme, as these customers appreciates being apart of the ‘inner circle’.
“Through this initiative, we cultivate high quality customer relationships by offering exclusive perks such as luxurious hotel stays and first-hand access to limited-edition collections,” she added.
In the coming years, Chan said The Shoppes will continue to build it key proposition – authenticity and personalisation.
“We will be re-introducing our personal shopping service in 2024 and in time to come, salon privé – private shopping environments for high-value customers – in partnership with leading luxury brands,” she said.
