Central Department Store Group (CDG) plans to modify its business model to adapt to the rapid transformation of Thailand's retail landscape, a byproduct of changing consumer behaviour and digital influence.
CDG department stores, starting with Central Department Store, will be reorganised to highlight the consumer lifestyle -- a big change from the traditional rows of fashion and flagship brands.
CDG chief executive Yuwadee Chirathivat said consumers are spending more on related tourism products and services, meaning the number of shoppers who visit department stores are falling short of the company's expectations.
The group has allocated 350 million baht to the rebranding and transformation of its department stores. Central will revamp products and services -- both online and offline -- and refresh its decor to deliver a unique shopping experience for customers.
Retail units under the group include Central Department Store, Robinson, Zen, Supersports and Muji.
The group saw 100 billion baht in sales last year and expects 130 billion baht this year. Of the total, 60% came from the domestic market and 40% was generated overseas.
"With this transformation, we aim to create a second home that creates memorable experiences for all generations," said Nidsinee Chirathivat, co-president of Central Department store.
CDG plans to adjust its business strategies to align with global retail trends. Some 20% of retail space at each department store will be allocated to new lifestyle products and services, including restaurants and beauty salons.
"Under these plans, our department stores will be more than just a place to shop, they will be transformed into a co-living space where people share their experiences," Mrs Nidsinee said.
The transformation of products and services at Central Department Store's Rama III branch will be completed in December.
Two more new stores will be added in Nakhon Ratchasima this November and in Phuket some time next year. The company has allocated about 1.3 billion baht to open its new department stores and renovate its existing stores.
According to Mrs Yuwadee, the transformation is not aimed at online customers but the company is prepared to confront the various challenges from different retail formats, shopping channels and other competitors.
To speed up services, Central Department Store's website, www.central.co.th, and the recently revamped mobile app will be integrated to create an omnichannel, seamlessly combining in-store shopping and online shopping.
The company expects sales from online shopping to reach 5% of the total within five years, up from 1%.
CDG plans to reduce the expansion speed of adding new Central Department Store outlets this year, choosing to focus on renovating existing stores.