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The retail industry in Singapore contributes about 1.4 percent to the GDP and employs three percent of the country’s workforce.
However, traditional Singapore retail stores are struggling to keep themselves afloat, with the triple threat of rising costs, declining sales and industry disruption from e-commerce.
On one hand, the decline in Singapore retail mirrors the global drop in performance of the retail industry – according to a Business Insider report, 3,800 stores are set to close worldwide in 2018 alone.
But the pinch in Singapore retail is keenly felt at the local level. From 2014-2017, Singapore’s Urban Redevelopment Authority (URA) reports persistently declining retail rentals and increasing retail vacancy rates.
Store closures are becoming more frequent. In the last five years, international retailers such as Carrefour, Gap and Banana Republic have closed their Singapore storefronts. Local and regional brands, such as furniture retailer iwannagohome and fashion house Raoul have closed their shutters as well.
Retail’s decline does not mean that Singaporeans are buying less. On the contrary, Singapore retail’s abysmal performance and the rise of e-commerce is closely linked. While Singapore’s retail sales have gone down, online shopping has increased.
As early as 2014, a survey by Visa ranked Singaporeans as the top online shoppers in South East Asia, while an industry report by Google and Temasek Holdings forecasts the Singapore’s e-commerce industry to grow to S$7.5 billion by 2026.
However, the use of technology in Singapore retail isn’t limited to customers buying goods online; traditional retailers stand to benefit too. From improved and more efficient supply chain procedures to the use of big data to provide personalised services, digital adoption in the retail industry will help Singapore retailers to not just survive but thrive.
Two major trends are helping to revive Singapore’s retail landscape – omni-channel retailing and experiential retail.
With many retail customers starting their purchase journeys through online marketplaces and Google searches, retailers who use digital catalogues and ‘storefronts’ to complement their brick-and-mortar stores stand to benefit from increased brand awareness.
A study by Singapore Management University’s Institute of Service Excellence found that department store customers who shopped at both physical and online stores were more satisfied, more loyal, and spent more than customers who only shopped at the physical store.
Further incentives for Singapore retailers to develop omni-channel platforms have been introduced by the Singapore government via the Retail Industry Digital Plan (Retail IDP).
Disclaimer: All materials have been prepared for general information purposes only to permit you to learn more about Hawksford, our services and related matters. The information presented is not legal advice, is not to be acted on as such, may not be current and is subject to change without notice.
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