Buying power

The future of the department store has been repeatedly questioned over the past decade as luxury brands invest in their own shops and consumer behaviour evolves. But while relationships between brands and department stores might be forever changed – brands are seeking more control and now operate their own concessions within these institutions – department stores will continue to play a critical role in the luxury ecosystem.

Since 2011, Central Department Store Group, which is based in Thailand, has been buying up the best department stores across Europe, from Rinascente in Italy and Illum in Denmark to Selfridges in the UK. While these blockbuster deals have been making international headlines, the retail giant with a magic touch for turning around legacy retailers has also been quietly transforming its own crown jewel, Bangkok’s Central Chidlom. After an extensive renovation led by British architect John Pawson – the largest since it opened in 1973 – the store is due to reopen in December 2024. It will operate mostly on a concession model while acting as a social gathering space, and will focus on servicing the vip customer’s every need. Central Chidlom is now also home to 60 restaurants and cafés.

Natira Boonsri, the ceo of Central Department Store Group and a member of the mighty Chirathivat family that controls Central Group, has spent almost her entire career in department stores. She is currently overseeing 76 locations and has big ambitions for Chidlom, reflecting Thailand’s ever-increasing strength as a luxury market. Here, she tells monocle what’s new and explains how the flow of expertise and information between the group’s Asian and European businesses is positioning Central Group’s retail arm as a global market leader. — L

How does Chidlom in Bangkok compare to the Central Group’s department stores in Europe?
When we discuss our group’s luxury portfolio, we say that Rinascente is the store of Milan and Selfridges is the store of London. We want Chidlom to be the store of Bangkok. Each one has a different positioning but we want them all to cater to premium customers and be social gathering places.

How has your overseas business influenced the strategy behind the Chidlom renovation?
Some of the businesses are very good at activating the store – what we call retail as media. Rinascente often changes the shop’s façade and lets brands take over the inside to advertise or communicate to customers. We want to do that at Central Chidlom. We have also doubled the space of the Chidlom beauty floor. Selfridges has a very strong beauty offering and it always has new-to-market exclusive launches to create excitement for customers.

How important are VIP customers?
They are instrumental to Chidlom’s success. We have about 7,000 top customers and on average they come almost twice a month and spend 600,000 baht [€16,000] a year, which is very high. That’s why I created the Cenfinity loyalty programme last year. We want to step up a few notches and go beyond expectations. In the past we didn’t have all of the luxury brands that these customers were looking for, so they would have to go elsewhere.

What kind of conversations did you need to have with the luxury brands to convince them to partner with you?
During the coronavirus pandemic we saw a huge spike in luxury consumption in Thailand and we couldn’t ignore it. We shared our vision and renovation project with the luxury brands and they were interested. Most of the fashion brands on the luxury floor are new to Chidlom, including Louis Vuitton, Gucci and Prada. Usually they are in shopping malls where they have large boutiques. This is the first time that they have joined a department store in Thailand.

How do you see the overall department-store concept faring in the future?This year we will have medium, single-digit growth, which is considered quite good. Our recently renovated stores are outperforming the others by a long way. When we renovate, we introduce new programmes and lifestyle elements that encourage customers to visit, have a coffee and stay longer. We renew the brand line-up and introduce new ones to the market. We also see an uplift in sales when we redesign the floor layout and make our stores easier to navigate. The department-store model will continue to grow as long as it adapts to the changes in customer behaviour.

How do you see technology affecting the customer experience?
Social commerce has become very successful during the pandemic. Our sales associates would contact our customers using the Line messaging app and send them pictures and videos of new products that they could buy. This remains popular and we want to push it even more – alongside live commerce, where China is very strong. It’s still the start of this journey and we will be slowly growing the digital part of the business.

Will bricks-and-mortar shopping stay at the core of the business?
It’s very important and it will always be there. Customers of every nationality long to have a community hub where they can mingle and hang out with friends.

Are you optimistic for 2025?
The global economy is volatile but Thailand’s gdp is forecast to grow about 3.5 per cent next year. We think we will continue to achieve our targets and see a big growth opportunity in international shoppers. Tourist spending in our stores has already exceeded pre-pandemic levels, even though the number of visitors to Thailand is still below the 40 million who came before the pandemic.

How else do you foresee the Thai retail landscape changing?
There will be about 500,000 square metres of new retail space in Bangkok by 2026 or 2027. Competition is intensifying but that’s good. The more there is, the more everyone wants to transform themselves. That’s better for customers and ultimately it makes Thailand stronger because we’ll be able to attract more tourists.