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Shifting consumer demands forcing the evolution of retail

Published on: 01-Oct-2019

Retail isn't dying. It's evolving because it's being heavily disrupted, and retailers are being forced to change tactics to keep up with changing consumer habits, managing director of CapitaLand Retail Chris Chong has said.

To future-proof this sector, the players in it need to make diverse offerings and offer unique experiences. 

"When we look at the future of retail, it is about shopping smart, curating the different experiences, having a seamless online-offline integration. For the retailers, what we need is for them to have close collaboration."

Mr Chong was speaking at a seminar titled "Making Sense of B2C Today", organised by sgsme.sg, a business resource portal powered by The Straits Times, The Business Times and Lianhe Zaobao.

It was the fourth of six business-empowerment series seminars supported by RHB Bank and co-hosted by U-SME, the SME arm of NTUC.

Three other industry leaders who spoke about their respective companies' experiences at the event last week backed up Mr Chong's point about changing consumer habits redefining retail.

James Chang, chief executive officer (CEO) of e-commerce giants Lazada and Redmart said that when the Alibaba-backed Lazada was launched in 2012, one challenge it faced lay in the delivery of the packages and collecting payments.

Confronting the challenge threw the company into the logistics game. It set up Lazada Express and also introduced a "Cash on Delivery" option, for customers who did not have ways to make online payments. 

Elaine Heng, deputy CEO of NTUC FairPrice, said the supermarket giant has been innovating and rethinking retail.

Ahead of the opening of the new FairPriceXtra hypermarket in Vivocity, for example, studies were done to identify the types of customers the outlet was likely to have, and it was found that these ranged from National University of Singapore (NUS) students staying in hostels to locals and tourists bound for Sentosa, and frequent shoppers en route to Batam.

Armed with this data, FairPrice was able to better curate its in-store experiences. For instance, it offers shoppers the choice of buying vegetables pre-cut and by weight in grams, so they can cut down on food wastage.

This FairPrice outlet is also where shoppers can sample cocktails or attend cooking demonstrations. 

Ms Heng said: "We believe that customer centricity will be a key force of competitive advantage. We look at placing customers at the heart of everything that we do and turning these insights into actions and responding to them."

Ng Aik-Phong, managing director of fintech firm FavePay talked about the rapid growth of mobile payments, describing this as the next big thing for the sector. 

In China, he said, his e-payment counterparts are offering perks to users of mobile wallets to leave money in them, so they can earn interest on the balance.

Mr Ng said Fave has been providing its merchants with actionable data insights into their customers. It has also introduced dynamic cashback, for example, by providing more cashback during off-peak hours, and provided micro-loans to small and medium-sized enterprises (SMEs) in a pilot scheme.

Dr Lynda Wee, founder and CEO of consulting firm Bootstrap and an adjunct Associate Professor at the Nanyang Technological University (NTU), moderated a discussion among the speakers after each had spoken.

One question posed to the panellists from the audience was whether the bigger retail players were considering the introduction of unmanned retail stores like Amazon Go. 

Mr Chong said that although a store like Amazon Go appears not to have employees in sight, the retail concept actually entails having about 100 people in the backroom, "scrubbing" through the data and analysing that the retail experience is on track.

Another question was about what the landscape for mobile payments might look like in the future, given the sheer number of e-payment providers in Singapore, compared to China, where only AliPay and WeChat Pay are the dominant ones.

In response, Mr Ng said that of the 20 or so e-payment providers in Singapore, it is increasingly becoming a four-horse race among FavePay, Singtel's Dash, GrabPay and DBS PayLah!.

He also said that while it is unlikely that Singapore will become a purely cashless society - unless the government legislates to ban physical cash - there is likely to be a big shift towards cashless payments in the next three to four years.

Source: The Business Times, 1 October 2019

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