What’s Next 2016: Digital disruption not a key concern for Valiram Group
By Goh Thean Eu July 29, 2016
- Sees digital as just one touch point, but purchases will still be done in stores
- Two dimensions can’t give you the sensation, says its director
THE biggest fear of many brick-and-mortar companies is they will be disrupted by digitalisation, new technologies and even young and hungry startups.
Not so for Sharan Valiram, director at luxury goods specialist Valiram Group.
“What keeps at up at night is figuring out how to convince the mall owner or landlord to give us the space over a brand that we don’t retail – how do we become the preferred choice?” he said at the Digital News Asia (DNA) What’s Next 2016 conference in Kuala Lumpur yesterday (July 28).
The Valiram Group, set up in 1935, has grown from a textile merchant into a luxury goods specialist retailer. Today, it represents more than 150 brands and operates over 150 stores in the region, including in its home base of Malaysia, as well Australia, China, Indonesia, the Philippines, Singapore and Thailand.
The brands it represents include Rolex, Omega, A. Lange & Sohne, Jaeger-LeCoultre, Tag Heuer, Tumi, and Jimmy Choo.
According to Sharan, the company is constantly looking for more retail space as demand for luxury goods is growing, and there is a ‘mini revolution’ going on in this market.
“Brands need to build monuments so they can display their products and attract customers,” he said.
“Today, the number of people patronising these stores is growing and the luxury brands need a larger footprint. They need to be in destinations closer to the consumers.
“However, space in malls is finite. As demand increases, they have no choice but to move one level up as (malls) make room for more luxurious brands (on the ground floor),” he added.
Digital still has a role
While most purchases are done in-store, Sharan believes that digital technologies have a role to play in customers’ buying decisions.
“Digital is a touch point for sure. It is there in the decision-making process,” he said.
“However, we see that people end up buying the high-priced items when their emotions have been evoked ... when they are actually in the stores, with the staff waiting for them, explaining to them about the products.
“You need that experience in the luxury stores in order for the money in your wallet to be parted from you,” he added.
Having said that, Sharan acknowledged that there are customers who purchase luxury items online.
“These are mainly replacement items – for example, a polo shirt, cosmetic products, and others. Maybe parts of the polo shirt have faded in colour and the customer decides to buy the shirt online rather than going to the store.
“But most of our transactions are still done in stores; only a small percentage is online,” he added.
In fact, the company has tried “going digital” with one of the brands it represents, and it didn’t end well.
At one point, Valiram planned to have iPads in the stores for one of its luxury luggage bag brands it represents. The idea was that walk-in customers could browse the full suite of items, order and collect later.
The company also started to sell some of the brand’s bags online, hoping that consumers would buy them and have these bags shipped to them.
"But the response was not encouraging. At the end of the day, I guess consumers can’t get the touch and feel on a screen,” said Sharan.
“Two dimensions can’t give you the sensation. I can’t imagine someone buying a RM20,000 item online,” he added. [RM1 = US$0.24]
Sharan was keen to stress however that his company would remain open to new technologies, after all, at the end of the day, the main decision makers will be the luxury brand owners.
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The generational clash, and sharing vs privacy
A digital strategy? You’re behind the times
How to make corporate-startup collaboration work
The third digital disruption wave is here