Finding the silver lining in Singapore’s retail storyBy Joel Neoh
To say that the retail sector in Singapore has been hard hit over the past year will be an understatement.
Sales have plunged between 30 to 70 per cent for some local retailers since the onset of the COVID-19 pandemic, according to the Singapore Retailers Association, prompting many to pivot and turn to alternative solutions. During the Great Singapore Sale shopping festival from June to July for instance, the Singapore Retailers Association partnered with e-commerce site Lazada in efforts to boost online turnovers.
There has been a major impact on the consumer’s behaviour as well. A Visa study conducted in September last year found that three in four Singaporeans are shopping online more frequently as compared to the pre-pandemic period. Against this backdrop of changing consumer behaviour of shopping online and the dwindling footfalls in shopping malls due to various restrictions, several other retail trends are fast-emerging. From offering Buy Now Pay Later (BNPL) services to adopting contactless payment solutions, retailers are increasingly relying on innovative fintech products such as contactless QR code payments to turn the tide in their favour.
Despite the challenges brought on by the pandemic, there are silver linings to be found within the retail space. Retailers in Singapore can look to these industry trends as they adapt and strategise to stay ahead of the game.
#1. Drive sales by offering the BNPL option at checkout
BNPL is fast-emerging as a popular option for consumers who are wary of spending in these times of economic uncertainty. In fact, 43 per cent consumers in the Asia Pacific region would be willing to increase spending by at least 15 per cent if they were to pay in instalments, according to a research by Mastercard.
BNPL offers consumers the convenience to pay later for purchases by spreading out costs over several months without accruing interest fee. With instant paperless approvals, BNPL purchases are more palatable to consumers. The BNPL option at checkout increases the likelihood of consumers expediting the buying decision.
The flexibility of BNPL is especially useful during periods of economic uncertainty, such as in the current pandemic, when consumers may be hesitant to pay in a lump sum for their purchases due to cash flow and budget concerns.
#2. Tapping on to the power of data
An important question for retailers to ask themselves is: how well do I know my customers? Data analytics is quickly emerging as the X factor to create, monitor, and optimise your marketing strategies to boost your retail sales.
Using patterns and insights derived from point-of-sale data analysis, retailers can effectively deploy the right pricing strategies and offer personalised discounts.
Additionally, understanding consumer spending patterns will enable retailers to intelligently upsell products to varied customer segments, resulting in potentially huge turnarounds. For example, it is easy to upsell a tie to someone who regularly purchases shirts by presenting it as a combo offer.
Retailers thus stand to gain from capturing data insights and thereafter mixing up their pricing and marketing strategies to effectively target existing and potential customers.
#3. Focusing on personalised customer engagement experiences
Customer is king in retail, and businesses need to do all they can to maintain customer loyalty and woo new prospects, especially following a prolonged period of lockdown. Increasing customer retention by just five per cent can boost profits by 25 to 95 per cent, according to Bain & Company. Companies hence need to invest and focus on curating more personalised customer engagement experiences.
A mix of new-age loyalty and reward programmes with fintech will hence take centre stage, evolving into deeper, more personalised customer engagement experiences.
From matching consumer preferences with intelligent buying patterns, to tapping on innovative technologies such as AI-driven AR to offer virtual dressing rooms, the opportunities are boundless – if retailers are able to think bold and think ahead.
#4 Easing into the sustainability movement
Sustainable consumption is all the rage these days. About 60 per cent of consumers in Singapore prefer socially-conscious brands and would like brands to be more environment-friendly and sustainable.
What may be lesser known to consumers and merchants, however, is the behind-the-scenes support of digital payments in sustainable consumption. From digital onboarding to using QR code payments, digital payments and solutions are helping encourage sustainable consumption. Consumers can also opt for digital receipts instead of requiring merchants to print hard copies, reducing costs downstream. A plus for retailers, and testament that not all digital solutions need to be expensive.
Going green is a win-win-win situation for consumers, retailers, and the environment. By actively pivoting to environment-friendly business practices, retailers can avoid missing out on potential customer revenue and it might even lead to business growth.
Dark clouds shall pass
You would probably have seen various mega sale campaigns for the upcoming 10.10 season. The year-end shopping season in Singapore is upon us, and retailers have ample opportunities to up their game and be bold in trying innovative strategies. In these challenging times, customers appreciate engaging interactions and seamless shopping experiences. To that end, innovative fintech solutions will go a long way in helping retailers unlock competitive advantages.