Retail Asia 2018 May 2018 | Page 8

ONE VIEWPOINT Recognising the shift towards a mobile first environment… Why technology adoption is critical in the age of omni-channel retail Jeremy Khoo G ro u p C E O , i Fa s h i o n G ro u p In an embattled retail scene that is under constant disruption, embracing technology can be a game-changer to tip the scales in favour of business owners. 6 Retail Asia May 2018 T he retail sector has reached a tipping point in Singapore and other major economies around the world. Prompted by evolutions in technology, conventional retail habits have undergone drastic changes. Consumers are now gravitating towards online shopping while eschewing retail stores, leading to a steady decline in retail sales and low tenancy rates. The issue is exacerbated by the rise of the millennials, representing one of the largest generations in history and anticipated to play a central role in the ebb and flow of retail in the years ahead. According to management consulting and professional services firm Accenture, they will have more spending power than previous generations, with millennials in Asia expected to collectively possess an estimated US$6 trillion in disposable income by 2020. However, research from management consulting firm Bain & Co suggests that millennials possess vastly different preferences from their generational counterparts, leaving even the trendiest of brands dumbfounded at what drives their purchase decisions. There is no question that the retail industry is experiencing a sea change, with the North American retail scene described by investment banking company Piper Jaffray as under going a “historic moment of truth”. With the entry of e-commerce giant Amazon into Singapore, has the death knell sounded for retailers in the island nation? The end of bricks-and- mortar retail in Singapore? Not quite, it seems. While e-commerce has indeed been a huge disruptor for retail, it would be incorrect to say that it is solely responsible for the shifting fortunes of bricks-and-mortar retailers. Evidence is pointing to a phenomenon termed ‘digital-first retail’ which posits that there is an increasing tendency for consumers’ purchase decisions to be influenced by digital channels. Studies by market researchers Forrester and Deloitte have estimated digital-driven bricks- and-mortar sales to outpace online sales by a staggering five-fold margin. With a tech-savvy millennial audience, digital is increasingly the gateway to retail sales. The digital-first retail effect was perhaps behind the rise in sales in the Great Singapore Sale, which had leveraged a mobile app to drive traffic to stores, while retailers simultaneously offered online catalogues to woo shoppers. Far from competing for market share, it is clear that digital channels could serve to boost in-store sales instead. According to Bloomberg, the Singapore retail scene is a tough nut to crack as most of the population are in close proximity to shopping malls. For this reason, Singapore trails behind most developed economies in e-commerce growth rates. Bloomberg also found that Singaporean consumers preferred