Singapore retailers turn to AI amid falling store sales: survey

69% of Singapore retailers believe AI agents will be essential to outpacing competitors within the next year.

A growing number of retailers in Singapore are betting on AI to stay competitive in a challenging retail environment.

According to Salesforce’s latest Connected Shoppers Report, 69% of Singapore retailers believe AI agents will be essential to outpacing competitors within the next year, whilst 85% plan to increase AI investment in 2025.

Retailers are facing mounting pressures — from higher customer acquisition costs and inflation to increasingly fragmented shopping journeys.

Physical stores still matter, but their share of purchases is expected to decline from 43% in 2024 to 38% by 2026, as digital spending spreads across websites, marketplaces, brand apps, and delivery platforms.

Salesforce’s report, based on surveys of 8,350 shoppers and 1,700 retail executives globally (including 100 in Singapore), highlighted AI agents as a strategic response to these challenges.

These autonomous systems can perform tasks across business functions, from marketing and customer service to inventory and associate training.

Marketing is emerging as a top use case, where AI agents help segment audiences and automate campaigns based on real-time behavior. In stores, AI supports productivity by automating common queries and returns — a key concern as 75% of retailers report productivity losses due to inefficient systems.

Consumers are also warming up to AI. 36% of shoppers in Singapore already use AI for product discovery, a number that climbs to 53% among Gen Z. Shoppers are open to AI agents managing loyalty programs and answering questions, though they want clear safeguards: privacy, transparency, control, and the option to speak to a human.

To fully unlock AI’s potential, 82% of Singapore retailers are investing in unified commerce platforms — integrating systems across stores, online channels, and back-end operations to provide better data and faster, more personalized service.