Those of you who have been coming to Holland V for a while may recall the type of clientele, Provence, the Japanese-run cafe and bakery along Lorong Liput, used to have. They were clearly serving mostly Japanese customers.
Provence is one establishment in Holland V, which has weathered the economic storms of the past decade and came out stronger and more attuned to the needs of the changing economic profile of Singapore and in deed, Holland V.
These days, when you walk into the cafe in the morning, you see people queuing up at the counters and the seats are all taken. In fact, on most days, you see people waiting for the door to open before 9am (weekdays) and 8.30am (weekends and holidays). It is obvious that business has picked up quite a bit.
The last few years have seen an increase in outlets and it now has branches in Vivo City, ION, Plaza Singapura and Tampines Century Square (note that they are not in Liang Court or Great World City – places with high concentration of Japanese families).
It is clear that there has been a drastic change in strategy, which is working very well for them.
Question – How did Provence overcome the economic crisis and came back stronger? What is their strategy?
The economic crisis and the new rules in conducting business have forced many MNCs to restructure and recall back their overseas personnel. Businesses which depended on a core group of such regulars, like Provence, had no choice but to reinvent themselves.
Singapore now has a million foreigners. The gap between the well-off and and the not-so-well-off in her residents is fast expanding. Those who have suffered the crisis and lost personal properties are now relooking at a smaller expenditure budget. Many expatriates here are on local employment terms (because there are fewer who are sent here by HQs). And the economy is not expanding fast enough despite an increased in 1 million more people – a quarter more population but certainly not a quarter more domestic growth with all that money being distributed to a larger group of people and also a portion being sent home by a large percentage of foreign workers. All these point to one thing: either serve the average customer group or serve the elite group. There are just too few in-betweens.
What product, then?
The cafe already had a number of unique appeals – Japanese origin, Japanese staff and Japanese quality. These would appeal to Asians, including Singaporeans, so all Provence needed to do was to build on these proven elements but now targetting Singaporean and Asian foreigners.
In fact, Provence’s unique selling proposition is the flour it uses for all its bread. It gives the bread a chewy and more voluminous bite. This also fills the stomach unlike the bread found in the other cafes around Singapore. I believe this is the key factor in its product appeal to Asians – which can also be noted in the increasing popularity of “chewy” noodles all across the island. If Provence did not have this crucial element, it would not have as many regulars as it has now.
Pricing & Cost Control
Since the target groups are locals and other Asians, the use of butter and cheeses could be reduced or totally forgo. This probably cut COGs down significantly. And to make the product looks good, Japanese cucumber is used, a better quality coffee is served and presentation (cups, saucers, etc) is improved – all part of a normal breakfast set and all still part of the overall Japanese appeal. This would achieve the desired perception of “value for money” while keeping cost down (a breakfast set costs less than half the price of that in Coffeebean) . Part-time staffing strategy is adopted and centralised production all help to keep cost manageable.
Reaching its new customer groups
With such a strategy, Provence would need to be in places with high concentration of locals and Asian foreigners. This is precisely why they have chosen Plaza Singapura, Tampines Century Mall, Vivo City and ION.
Women a key customer group.
By eliminating butter and cheese, Provence has become a very attractive proposition for women on weight-loss programmes. This is an opportunity which it has yet to exploit.
Well, from what we can see, it is clear that Provence hasn’t left their fate to providence but it has found ways not only to survive but to grow in the face of crisis.
Congratulations! Thumbs Up for this outfit!
Provence has moved out of their Lorong Liput premise and relocated at 269 Holland Avenue, occupying the shop which Essential Brew vacated sometime ago.Disclaimer: The views and conclusions in the above article are opinions of the writer and are based on his personal observations of the subject matter. They do not necessarily reflect the position of www.holland-village-singapore.com . The information provided may or may not be factual but they have not been verified. If you have a question, you may post for assistance on our Forums. For special deals, please visit our Holland-Village-Singapore Facebook Page.