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DIALOGUE: The Science and Art of Retail, Dialogue with Mary Kwan, President and CEO of Robbinz Department Store, Tianjin
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The Science and Art of Retail

Dialogue with Mary Kwan, President and CEO of Robbinz Department Store, Tianjin

By Annie Ly

Having studied International Business at university in the United States, over the course of her 30 year career in the retail industry, Mary Kwan has done it all. From wholesale to retail, merchandising to design, sourcing to inventory management - Kwan has a solid background in working in fashion and apparel. A truly international individual, Kwan joined the Indonesia based Lippo Group to head up their China operations in Tianjin three years ago. As the current President and CEO of Robbinz Department Store Tianjin, this month Mary Kwan shares her insights into the science and art of retail management and the development of the industry in Tianjin.

Di 97A9398 副本What are some of the differences in the retail market you have experienced between the US and China?
Some of the major differences are in the way business is done in China compared to the US. If you are an owner or CEO of a company in the US retail industry, you are responsible for all the people, inventory and - for the most part - the design and resourcing capability. In China, things are based on a concessionary model. As CEOs we own a location and lease out portions of space to different vendors - they control their people and inventories. At the end of the month, we settle with them taking an agreed percentage of their sales. The other part of the model involves simply leasing out space and being paid monthly rent. So, the role of a CEO of a department store in China can be likened to a mini landlord; you have to find your best tenants, have good merchandising skill and fashion sense to attract a balanced portfolio in order to appeal to different customers. As a result ownership, relationship building and the extent of your control is very different. In the US, you have more autonomy in changing the course of business. Here, you can try to persuade people to do things differently, but it is not something that is entirely under your control.

How do you deal with the issue of things being beyond your control?
It's all in relationships. Building and maintaining relationships with your tenants, making sure they give you the freshest merchandise and they keep you aware of all their special sales is important.

It is also important to understand one's own limitations as far as building partners is concerned. You cannot dictate things to your key partners. What you can do is continuously improve your operations so that the light naturally shines on you as the number one choice for shopping.

Of all the roles spanning your career history, which role was most poignant for you and why?
Di 97A9378 副本At the beginning, I spent ten years at one department store in California. Those years were defining for me because it's where I started out in inventory management before I moved over to buying. Later I became a Merchandising Manager and after a Vice President of a division. All that movement back and forth gave me a solid background in the science and art of the deal.

I am naturally a person of fashion and good aesthetics but I have seen so many others with the same qualities fail because what's needed is an understanding of the science. How do you manage people? How do you define your capital structure? How much debt is good debt? Those were the formative years for me to learn the art and science of this business.

Another important transition was when I worked for Levi Strauss and Quicksilver which are both wholesale businesses. To be able to transition from the retail world to wholesale, and understand the art of negotiation from both sides were very crucial. Empathy is an important value to me; being able to sit in the opposites chair is a key to relationship building.

Tell us more about the Lippo Group. Why did they decide to come into the China market and why did they select you as CEO?
Lippo Group work all over South East Asia. Now, they are a second generation run company with the Grandfather who first began the group acting as the patriarch. They began as a family who established themselves well in the art of the deal working in real estate. This Indonesia group own the largest department store chain in Indonesia, the Matahari and the Hypermart chain.

Back in the early 2000s, the China market was just opening up. They saw it as a good opportunity to use their skill and talent to break new ground. The department store market has developed and matured a lot in the last 15 years and I believe the Lippo Group wanted to expand with this rise.

As the market matures, the Lippo Group realise that management and business strategies also need to change. Chinese executives have gone through a 'baptism by fire' and learning on the job process but perhaps there lacks the study element of how this industry runs. Getting some more outside influence to take the company and the people to a new stage of development - someone with a better understanding of the arts and science behind the retail business was important for changing the direction of growth.

Robbinz Department Store, Tianjin recently celebrated the grand opening of its Fashion Lifestyle Zone on the Basement Floor. What specific niche does Robbinz seek to fulfil within the Tianjin market?
Opening the Fashion Lifestyle Zone is just the first step in what will be a multi-million project to redevelop the store. Currently, many parts of the store look in need of upgrading. Our merchandise assortment is good but needs to move faster to catch the young, optimistic up and coming generation. Basement One seeks to appeal to a more fashion orientated, young and self-confident audience.

We created our Basement Floor to be an experience and a place where the younger generations can spend their leisure time, eat good food, buy updated fashion pieces. For example, eyeglasses; they can mix or match their frames and rims, find the latest trends and freshest merchandise.

If somebody wants to just buy something, they can do so online from the comfort of their own home. But if they go out with their friends or family, they look for somewhere they can hang out and feel like they have found a third place away from work or home that they feel comfortable. This is where we hope to catch our loyal customers in the long run.

Di 97A9325What are your thoughts on the current development of the retail market in Tianjin? Is there a sense of strong competition?
Joy City in Tianjin is definitely a well-run shopping destination who are capturing a similar type of customer. Our location helps us but I have seen many retail destinations around us shut down in recent years - so location does not guarantee success. Operationally, whether it is providing more rest spaces, wifi, digital sign in for VIP customers in a seamless way, is really crucial.

In the retail business, you are in the world of 'high touch'. We need to be very aware of what we can provide our customers to make them feel loyal and comfortable. Whether it's earning more VIP points or sending them greetings and discounts around their birthday. Unfortunately one of the things we face here in China is that you don't know your own thing because you do not design your own products - but I can see some department stores developing that capability. Right now everybody looks the same, using the same brands - so you must differentiate yourself through the experiences and services you provide.

Who do you seek to attract to the Robbinz Department Store?
My philosophy is that you can focus on the young and offer products and experiences that are young and hip, but you must offer something for everybody. It's not easy and you have to make some hard choices, but fortunately we have enough levels that we can define different zones in store.

BT 201606 040 Dialogue hlHow will you attract and engage with these customers?
In our media mix, we still do traditional media such as selected newspapers, subway station and bus stop posters. A bigger part of what we do now is using WeChat, SMS and direct mail. We're building up our VIP base and trying to evaluate what they have already bought in anticipation of what they are likely to buy next and trying to communicate with them on that basis. Hopefully we're tapping more into our target customer in this way.

What makes the Robbinz Department Store stand out from other shopping destinations and department stores in the city?
We have a great portfolio of brands throughout the department store. We have six businesses we try to focus that through; gold and jewellery, ladies shoes, ladies apparel, men's casual and sports, kids and toys and cosmetics. Together these all encompass the lifestyle of many people.

Ultimately, we are a store where people come and shop; we have good promotions and great pricing every week. We are the number one store for many of our key brands so we always get the freshest merchandise. We also give a tremendous amount of discount for our customers and now have better eateries on our basement floor. We will continue to add to our assets to build a lasting business here.

Di 97A9336What is the key to successful retail management?
You have to be a good listener. Coming to a new continent to manage the same business, you must also have a lot of patience. Be able to continue to instil in yourself and others a sense of urgency to change and have courage to take hard decisions. You have to have the patience and courage to overcome many hurdles, but I see so much room to grow and mature in this market.

Are there any challenges you see the retail industry in China facing at the moment?
E-commerce has been talked about a great deal in the past few years. We must be aware of its development and growth but also not be paralysed by it. The economy is slowing down but I think that the shifting of the economy from a manufacturing world to one of consumption is a good thing. In a country of this size, that transition is not easy. It will be felt in our industry for sure. What we need to do is see the reality of the issues before you can begin to resolve them. We need to be efficient and embrace systemic upgrade to continue to thrive in this difficult time.

I'm optimistic about the market provided that you operate very well. If you don't adapt and adopt, there will be many that will fall. That is the natural course of things.

Any final words?
Tianjin is a city with tremendous opportunities for development. I hope there are new thinkers and courageous entrepreneurs who will come to the city and help it realise its true potential.


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