Consumers worldwide have shifted their shopping patterns due to the COVID-19 pandemic. With an economic outlook that is seemingly negative, many consumers in Singapore have turned away from buying non-essential items such as make-up and fashion-related items, increasing spending on groceries and household supplies such as kitchen supplies, vacuums.
Apart from a shift in consumer behaviour, the pandemic has also fundamentally changed the way consumers shop during this period. A study conducted by Nielsen in March 2020 found that 37 per cent of consumers in Singapore have increased the amount of shopping done online and that 76 per cent of consumers feel that their increased level of online shopping will remain at the same level. Furthermore, they found that 69 per cent of consumers that bought household items online for the first time will do so again within the following year.
To curb the spread of the virus, the Singapore government implemented a two-month-long Circuit Breaker in April 2020 that restricted the act of dining out for F&B outlets and mandated the closure of most brick-and-mortar retail stores. With the closure of their physical stores, most retailers had to turn to e-commerce to supplement their drop in physical store revenue.
It might seem that e-commerce is the only way forward. However, a recent 2020 Shopper Study found that nearly 58 per cent of consumers in the Asia-Pacific region prefer to shop with online retailers that have brick-and-mortar locations. With a mix of reasons like being able to experience the product and getting their purchase immediately, it paints a situation where physical stores are here to stay.
However, having a physical retail store alone wouldn't suffice in today's digital economy. In fact, the introduction of CapitaLand's e-commerce platform "eCapitaMall" and food ordering platform "Capita3Eats" serves to highlight the importance of a combined retail strategy. The digital eCapitaMall is a space for retailers who have physical stores to foray into the world of e-commerce, allowing them to have a flexible retail approach that has both an online and offline physical arm.
To compete in an ultra-competitive e-commerce landscape, having an online retail store isn't the be-all and end-all method of having a successful business. In fact, utilising technology is only the first step to thriving in the e-commerce world.
Take for example, the experience of Mr Bazaar (see correction note), a local Singaporean FMCG merchant who supplied durians to wholesale partners such as supermarkets. The business had pivoted onto the ezbuy platform after experiencing a drop in physical sales during the Circuit Breaker. Through our Million-Dollar Markdown programme, one of ezbuy’s relief efforts to aid Singaporeans that were hit by financial woes during this pandemic, the merchant was able to effectively market and amplify their products to large numbers of potential consumers, allowing him to experience a much higher sales volume and improved cash flow. They had managed to sell over 500 boxes of durian daily and had closed their other sales channels to cope with the demand from ezbuy’s customers.
Success came from their ability to understand and use effective online marketing strategies that helped in increasing their sales exponentially. Similarly, through the use of digital e-commerce platforms, retailers can track and obtain data around consumer behaviour and preferences. Valuable online metrics such as sales conversion rates, percentage of returning consumers and shopping cart abandonment can be easily collected and analysed for critical trends and behaviour shifts. By using the data wisely, retailers will be able to stock up more on in-demand items that are lucrative while taking measures to limit the production or import of less popular products.
At the height of the pandemic, ezbuy.com reported a 15 per cent increase in basket size, a 50 per cent increase in online transactions, of which 80 per cent were made via our mobile app. Categories such as home appliances, groceries and sleepwear and sports wear were the more popular product categories during the circuit breaker period with the 55-64 age demographic tripling between April and May 2020.
Based on insights gleaned from the data, our retail partners were able to pivot quickly to fulfil the rising demand. Referencing these consumer trends enabled them to strategically stock up on groceries and other daily necessities that consumers were looking for, allowing them to have a competitive advantage over similar competitors in these verticals.
With an e-commerce platform, retailers will also be able to price their items attractively to attract and convert consumers. By reducing the prices and aligning less popular items with promotions and increasing the offerings of more in-demand product ranges, retailers can achieve a balance of parity and profitability between items of decreasing popularity while ensuring that they have a wide selection of competitively priced items in the trending market.
One of our merchants, Autovacstore, was able to increase the sales volume of its vacuum cleaners and television sets. This was achieved by offering more competitive online prices to customers as part of our Million-Dollar Markdown programme. ezbuy provided further assistance to improve its listing and boosting consumer confidence and trust by availing after-sales information. They also received regular updates and advice on how to improve their promotion and sales.
Retailers will be able to ensure a more consistent revenue stream and be less susceptible to in-market fluctuations and shifting consumer behaviour. Furthermore, through e-commerce platforms, retailers will be able to incorporate time-sensitive promotions such as flash deals and hourly-released promotion codes. These discounts are more comfortable to enforce (as compared to physical shops) and help attract the attention of even more potential online consumers. When utilised in the right manner, these simple discounts will be able to dramatically increase the sales volumes and maximise profit margins.
In this continually changing retail landscape, the correct use of a digital platform allows retailers to level up their marketing strategies. While a physical store provides many benefits that consumers enjoy, pairing the physical store with a digital one will enable Singapore's retailers to thrive in today's crowded retail scene and be able to build a successful brand.
Correction note: A previous version of this article contained a misspelling of Mr Bazaar's name. The article above has been amended to reflect the correct spelling.