What: After seven years as Group's Director of Operations at Galeries Lafayette, Olivier Bron is CEO of Central and Robinson's department store network in Thailand.

Why it is important: Besides acknowledging the fact that the department store model must reinvent itself, Olivier Bron explains the challenges his store network is facing. Competing with digital penetration, adapting department stores to new forms of consumption such as social commerce, and differentiating boosted services and experiences are key.

About the future of department stores

Whether in Europe or Asia the observation is the same: the department store model must reinvent itself. However, the Thai middle class is growing and the potential is great for the department stores. One of the main challenges is that international competition as well as the digital penetration are becoming stronger.

About the differences with the European market in terms of digital

The consumption via social networks is much more developed than in Europe. There are also very big online aggressive players with marketplaces like Zalada. The challenge is to update department stores to adapt them to new forms of consumption such as social commerce.

Also, consumers in South Asia are highly educated about discounts and promotions: the weight of gamification is very important, and the approach is often very sophisticated. Coupon collection and gambling are very important. With 85% of Central’s customers having a loyalty card, the influence of data is even bigger.

Behaviour evolution is going very fast with 20% of 25-50 year-olds having cryptocurrencies. A huge difference with Europe is also that 75% of digital activity goes through the app: it is more a service in which it is possible to buy than a direct path to purchase. “We have seen a 70% growth in our sales through this channel and we have doubled our sales through social commerce.”

About the differences in the product offer

European department stores have tended to organize their offer around fashion. In Asia, the categories are more balanced with a greater importance of home and living products, household appliance, and beauty.

In the fashion segment, there is a very affluent clientele that is very savvy about luxury products. Such customers are interested in major international brands and French luxury brands already have strong recognition. But they are also waiting for local brands to develop.

About the absence of Chinese tourists 

Chinese tourists did not return. Some Europeans are coming back but it is not like before. The traffic drops are significant. Under such circumstances, experience and service must bring differentiation: in Thailand, personal shopping strengthened the activity by 25 to 35%. Catering is also generating traffic.

Now 15% of the surfaces that are dedicated to services: rather than reducing store sizes, spaces are reallocated to complementary offerings. There is a big risk that below a certain size of store, department stores might lose their attractiveness.

An interview of Olivier Bron, CEO of Central and Robinson's