WHILE Singapore retailers are innovating and coming to terms with e-commerce, they can move even faster to adapt to "new retail", said observers. "New retail", a phenomenon recently coined by Chinese e-commerce group Alibaba, entails retailers integrating their online and offline businesses, and leveraging the Internet and customer data to sell better.
Adrian Lee, research director at IT research firm Gartner, told The Business Times that local retailers have not quickly enough adapted to "new retail", where they are able to provide a true omni-channel (a combination of physical and digital) shopping experience to customers.
"At this point, few Singapore companies have neither the same scale, nor the ability to execute like Alibaba in order to combine the experiential aspects of a physical store, backed up by a comprehensive digital offering."
But he noted that Singapore is well-positioned to deliver holistic, omni-channel shopping experiences given easy access to fulfilment providers such as Ninjavan and DHL - an opportunity that local retailers must swiftly capture.
Mr Lee said: "With a palpable decline in traditional retail for Singapore, there lies a different opportunity for small to medium businesses to consider expansion into digital commerce. Large retailers with a depth of merchandise and portfolio also need to take action and bolster their digital commerce channels to exploit this phenomenon."
In various ways, businesses here have embraced "new retail". E-commerce site Qoo10 this year launched Mame Go!, a GPS-enabled mobile game (similar to Pokemon Go) that lets shoppers "pick up" Mameballs at physical stores and "catch" Mamemons to unlock discounts.
HyunWook Cho, Qoo10 Singapore country manager, told BT: "It's the first game of its kind in Singapore that converts online traffic to offline traffic … and drives footfall to brick-and-mortar shops. Singapore shoppers in particular are more sophisticated and drawn to brands that go the extra mile to provide engaging shopping experiences."
Another Singapore firm that is adapting to "new retail" is GuavaPass, whose app lets users access fitness studio classes. This month, it opened its first physical space in Singapore named GuavaLabs, a 5,000-square foot studio that fitness instructors can rent to host their classes.
GuavaPass president Rob Pachter said: "Our main platform is online, and allows fitness enthusiasts to connect with fitness studios and healthy-living experts. However, our community is also thriving offline. Our new GuavaLabs space will play a central role in this, housing a variety of offline community events."
A Better Florist, which has a mobile site and claims to offer free delivery of flowers in just an hour or two across Singapore, said that traditional florists are limited to their retail footprint and can no longer be profitable in an offline environment alone given high overheads and competition.
Co-founder and chief Steve Feiner said: "Today's modern consumer has less time and plenty of options. For businesses that want to compete, they need to be where their consumers are and offer what their consumers need. A hybrid online and offline approach is a simple first step to satisfying their demands."
He added that being in the "new retail" world means that retailers need to better understand their customers.
"This, we're able to do by partnering (payments technology firm) Stripe, which handles all our payments across both our online and offline channels, allowing us to better understand our customers and their needs, and work more efficiently to satisfy their demands."
Alibaba founder Jack Ma reiterated this very point at Alibaba's 2017 Global Netrepreneur Conference two weeks ago. He urged the audience of Internet entrepreneurs to embrace "new retail" by tapping the Internet and big data so as to obtain and analyse customer data, draw market insights and adapt their manufacturing processes accordingly.
Just last week, Alibaba unveiled its Hema stores in Beijing and Shanghai. An experimental supermarket concept, Hema is described by Alibaba as the most advanced manifestation of "new retail" to-date. It digitises every step of the consumer journey, remembers purchase preferences and makes personalised recommendations to consumers.
Its features include in-store consumption and cashless checkout with Alipay, Alibaba's digital payment platform. Consumers can view and purchase available items from their nearest store through an app. Hema stores also serve as fulfilment hubs, which will deliver groceries to local communities in under 30 minutes.
Daniel Zhang, chief executive officer of Alibaba, said: "We believe the future of 'new retail' will be a harmonious integration of online and offline. Hema is a showcase of the new business opportunities that emerge from online-offline integration."
Meanwhile, market players here are confident that moving to "new retail" will help Singapore revive its current retail slump. Qoo10's Mr Cho noted that the local e-commerce sector will become more dynamic this year with the advent of major players such as Amazon, while GuavaPass's Mr Pachter said: "Singapore is a very exciting retail market - we foresee more new retail concepts popping up here in the coming years."
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