Illustrations by Si Qi Fung
Singapore is known for many things, but most importantly food and shopping! According to SPRING Singapore, Singapore’s retail industry in 2020 contributed to almost 1.4% of our Gross Domestic Product (GDP) and 3% of total employment. However, especially with the recent pandemic, the industry has been facing some challenges. Here are the top 4 major pain points faced by Singapore’s retail landscape.
1. Digitalization of Shopping
E-commerce has become an essential part of retail and will continue to in the future amidst the COVID-19 pandemic. According to [Statista, revenue in Singapore’s e-commerce market is projected to reach USD $2,793 million in 2021. Especially with the pandemic, more and more retailers are realizing that they cannot survive with just brick and mortar shops. While Singapore’s retail sales dropped by 5.3 percent year-on-year in January 2020, e-commerce platforms witnessed a 23% growth in total web visits throughout the first 6 months of 2020. Business owners have endless options for technology platforms to streamline and scale up their businesses however, they often make misguided choices. It is important for retail owners to understand and be aware of which software fits the needs of their business model. Having a complex software platform can result in additional costs incurred as well as more inconvenience. Digitizing services is not as easy as it may seem, but with the right company, it will be a breeze.
2. Unpredictable Consumer Behavior
In the retail industry, the only thing we are certain about consumers is that they are always unpredictable. Given that humans are fickle beings, and not one of us thinks alike, it is impossible to find a single solution to this problem. However, customer-centricity is key. A good solution is utilizing technology through big data to get a better understanding of customers in order to get a more accurate gauge of what they want. By analyzing their behavior in greater detail, businesses are able to customize and personalize the delivery format for individual consumers. A chatbot can also help to collect important data, provide instant responses and a personalized customer experience to aid businesses in making the right decisions.
3. Higher Demand for Personalised Services
According to McKinsey, consumers today expect personalized services when they are shopping. In fact, 91% of consumers say they are more likely to shop with brands that provide offers and recommendations that are relevant to them. Especially with the advancement of technology, consumers today expect a lot more personalization while shopping. Large companies that have successfully created differentiated shopping experiences for their customers include Amazon and Sephora. To overcome this challenge, it is important that your business is able to make use of data to have better insights about your customers. A great way to collect data is through the integration of chatbots. As consumers use the chatbot feature, conversations will be recorded in the dashboard. Businesses are then able to make informed decisions and deliver a personalized shopping experience based on data-driven insights.
4. Volatile Supply Chains
Demand and supply – the two concerns that all retailers always have. Besides dealing with unpredictable consumer behaviors, unexpected challenges to the supply of goods do pose a great problem. With globalization, a growing population, and a global pandemic, supplies are even more scarce and volatile. Unfortunately, this is a huge pain point that cannot be solved by retailers themselves. The best way to deal with supply shortages is to always be prepared with extra inventory, or seek local alternatives. With conscious consumerism on the rise, you may also find that local products can actually garner more sales!
Conclusion
Every industry has its own challenges, and retail is no exception. Nonetheless, there will always be a way around them! In the case of retail, the best option today is to hop on the bandwagon and go digital. It may seem like another huge challenge, but when you partner with the right company, this journey will be a breeze! Learn more about what we do here, or chat with us to see what we can do for you.
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If you enjoyed this article, check out How E-commerce saved Mid Autumn Festival.
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