In Singapore, shoppers are now less impulsive and more inclined toward personalised experiences, according to a new report by global financial technology platform Adyen.
Surveying 1,000 consumers and more than 500 businesses based in the city, Adyen found retailers are feeling impacted by a shift in consumer behaviour. Sixty-eight percent of retailers said there was an increase in customer expectations in the past year, and 52 percent have begun offering discounts year-round, in an effort to address Singaporean shoppers’ growing desire for bargains.
Here, Retail in Asia discusses the report’s findings with Priyanka Gargav, Adyen’s country manager for Singapore and head of commercial for Southeast Asia and Hong Kong.
RiA: How have Singaporeans’ spending habits evolved alongside rising inflationary and economic pressures?
Priyanka Gargav: It will come as no surprise that consumers in Singapore are becoming more cautious with their spending in the face of recent inflation. Adyen’s Singapore Retail Report 2023 revealed that more than 40 percent of Singapore shoppers are spending more time in search of deals in stores or online. Forty percent of them are inclined to wait for specific discounting calendar events like the Great Singapore Sale and Singles’ Day to make their purchases.
But discounts for the sake of it are garnering less interest from consumers. More than three-quarters (77 percent) of Singapore consumers want personalised discounts, and are also more than happy to download an app to get better loyalty bonuses that deliver on personalised value and convenience. On this front, our report shows a notable mismatch because less than a third of retailers have loyalty programs that take into account their customers’ online and offline preferences.
The line between online and in-store continues to blur as Singaporeans’ first port of call for shopping, across categories from beauty, tech, to groceries. What’s notable is that we see this trend even in older demographics which traditionally gravitated to brick-and-mortar.
A growing proportion of those aged 45 or above are now turning online for their purchases. This is especially salient in categories like beauty and tech, where there is a near-even split in their preference for e-commerce and physical stores.
RiA: Are you seeing a resurgence of brick-and-mortar in Singapore?
Gargav: We are seeing a robust outlook on brick-and-mortar. Nearly three-quarters (74 percent) of Singapore businesses said they see having physical stores as a competitive advantage and 60 percent also plan to increase the number of physical outlets in the next year.
The role of the brick-and-mortar store is also evolving. Stores today function more as a showroom where retailers mindfully curate and showcase their finest products. Part of this is driven by the shopping behaviour of consumers, who want these stores to be exciting places to visit.
Even as physical stores make a comeback, customers are not forgoing online shopping. Instead, they want in-store and online shopping experiences to be integrated.
Nearly two-thirds (64 percent) were more loyal to retailers who offer in-store and online shopping experiences. Seventy-three percent also prefer retailers that allow them to purchase an item that was out of stock in stores and have it shipped directly to their homes. For businesses, the imperative to understand their customers’ dynamic shopping habits across different sales channels is clear.
We call the integration of sales channels as unified commerce, which is a step up from the omnichannel strategy employed by most retailers today. The benefit of unified commerce, as compared to omnichannel, gives retailers a single source of truth for them to better understand both their shoppers and their business.
RiA: What are the retail opportunities in Singapore, and how can businesses capitalise on these?
Gargav: There are several opportunities that businesses can capitalise on to get ahead in a crowded retail landscape, including resurgent tourism and leveraging technology to give the customer a better experience and be more efficient.
Earning the tourism dollar: One quick way for businesses to tap into the tourism market is by accommodating the payment preferences of international visitors. For example, Chinese tourists commonly use WeChat Pay or Alipay. By offering these payment methods, retailers make their purchases more convenient. In fact, our research shows that 56 percent of consumers will simply abandon their purchases if they cannot pay using their preferred methods, whether in-store or online.
A technology-led approach: The tight labour market in Singapore is well-documented. By adopting queue-busting technologies such as self-checkout kiosks and mobile point–of-sales (POS) terminals, businesses provide a more seamless shopping experience and ease labor pressures, all at the same time. A great example of a retailer providing such offerings is Uniqlo.
Our research shows that businesses that connect both their frontend and backend systems into a unified platform, are able to not only enhance the customer experience but to grow their bottom line. It also empowers retailers with valuable data for effective and more efficient customer management and optimises crucial aspects such as fulfilment, supply chain management, and other backend systems.