Century-Old Offline Store’s Struggle in Pandemic

The Coronavirus (COVID-19) outbreak has brought considerable human suffering and has become one of the biggest threats to the global economy.

Cities and even countries are in lockdown from time to time all over the world, the tourism industry, film and television industry and catering industry were directly destroyed, causing bankrupt of numerous companies.

Nearly a quarter of companies closed either temporarily or permanently in March and April last year, according to a study published by American National Bureau of Economic Research. Situations in Europe and Asia are the same. Even now, the affect and the aftereffect of the pandemic is still there as the coronavirus cases are still on the rise.

Not only small-business owners are concerned about their survive, so are the Century-Old Business owners, especially the chain retailers.

Debenham, once a lynchpin of the UK retail landscape, announced its closing last May, and permanently closed on May 15, 2021, leaving this 242-year-old business in history.

There is no doubt, the pandemic and associated restrictions accelerated its closing, but they only tell part of the problems that the companies have encountered. Its increasing competition from low- cost rivals like Primark, as well online disruptors such as ASOS and Boohoo also contributes a lot.

Besides these environmental effects, the company itself are deep in problems, the design is out of date and what affect more is Debenham’s ignorance of the changing shopping habit. Its expansion of offline stores caused debt problems, while the digitization strategy was almost purely hanged.

When the pandemic outbreak, the footfall of offline stores dropped dramatically, to reduce cost, Debenham once closed some unprofitable stores and launched a stuff reduction plan. But it weren’t helpful. Later, the board turns to investors, but failed too, leaving 12000 jobs at risk.

Neiman Marcus, an American luxury department store chain, filed it’s bankruptcy last September, this 113-year-old company became one of the highest-profile retail collapsed during the Covid-19 pandemic.

But things a little different in Japan.

In 2020, Physical stores have taken a major hit from pandemic because of the drop in foreign travelers visiting Japan. the sales of department stores nationwide in Japan decreased by 25.7% year-on-year, a decrease of more than 1.5 trillion yen from 2019, to 4.2204 trillion yen, which is the largest since the start of statistics in 1965. The decline was also the lowest level since 1975, according to statistics from the Japan Department Store Association.

And sales of Japan’s five major department stores in February fell by 5% to 11% compared with the same period last year. Among them, Mitsukoshi Isetan fell by 8%.

Mitsukoshi Isetan, founded in 1673, is an international department store chain with headquarters in Tokyo, Japan. It launched a digital policy in 2017, but not until last spring, it’s online system began to accelerate and online customer service provided.

In June 2020, a online customer service based on OMO launched, later a Mini Program contains 14 stores of Isetan Shinjuku realesed in November. By March 2021, 52 brand stores are available online, resulting in 10000 downloads.

As of May, there were about 200 employees in the company responsible for online customer service. After the another lockdown, the number of online chat and video customers tripled, with the conversion purchase rate 50%.

In addition, Mitsukoshi Isetan launched a shoe trial Mini Program YourFIT365 service in 2019, and an upgraded version Your FIT 365 Trial in February 2020 to provide customers with intelligent molded shoe samples for free, and customers can enter foot shape data online to get purchasing reference. And of course, if customers purchased online, the goods will be delivered to them by mail.

Daimaru, a large department store chain in Japanese, traces its history to Dai-Monjiya, a dry goods store in Kyoto founded in 1717. Now, through 300 years development, it has seven department stores and 3000 employees in Japan, has long been a go-to destination for Chinese shoppers in Japan.

According to released data, the turnover of Daimaru in January this year dropped by about 34.8%, the biggest decrease of Japanese retailer chain.

Actually in September 2020, Daimaru established a new digital business development department and launched a limited-term luxury-clothing-renting project. Customers can rent 3 domestic and foreign branded products per month after paying a certain guarantee fees. Of course, cost of round-trip shipping and laundry fees, as well as basic repair costs for scratches also needed. This project applied only online, and about 50 well-known brand products that can’t be sold at ordinary times earn their show time in pandemic. And this project was believed an innovative service that reduces contact and creates new customers as well as bring high profit performance.

Considering the population of Japan, however, these tourism-dependant department stores can not rely only Japanese.

According to the International Monetary Fund(IMF), the only major economy to grow in 2020 was China, registered a growth of 2.3%.

The IMF is, however, predicting global growth of 5.2% in 2021. That will be driven primarily by countries such as India and China, forecast to grow by 8.8% and 8.2% respectively.

Since the virus is still raging in India, Indian economy will hardly grow as prediction. However, with strictly control over the pandemic, China economy is slowly recover.

Definitely, with billions people and high rates of vaccination, as well as the close distance, Chinese online market is the best exploring destination.

Mitsukoshi Isetan entered Chinese online market through Tmall in 2016, and in September 2018, it launched in Jingdong. Tmall and Jingdong are both online shopping platform in China. This year, with the help of LinkieBuy, a one-stop Chinese cross-border e-commerce service platform, Isetan released a Online Shop Mini Program on WeChat, an chat APP used by billion people every day, to connect with customers directly.

Followed Isetan, Daimaru also launched a WeChat Online Store Mini Program with the help of LinkieBuy this June. This is Daimaru’s first entering in China. Considering the importance of its own customers and the high AD budget on traditional shopping platform like Tmall and Jingdong, Daimaru choose LinkieBuy to formed a DTC independent shop on WeChat.

By far, with the affect of the pandemic, these Century-Old department stores are still struggling to adapt to new shopping habits. Digitization and cross-border e-commerce are inevitable for them. And relying on platforms or develop DTC independent shop also need to be considered.

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