What is the future of retail?

The future of traditional bricks and mortar retail outlets has been the subject of much attention over the last decade. Countless column inches have been dedicated to predicting the impending doom. Although their decline has been gradual, the Covid-19 pandemic proved to be the death knell for these retail outlets.

Total retail sales in Singapore fell by a staggering 52.1% year-on-year in May 2020, after lockdowns were introduced to stem the tide of Covid-19 infections. The decline is the steepest witnessed in the island nation since records began in 1986. 

However, companies who had taken the leap of faith and embraced digital transformation did not just withstand the effects of Covid-19 on businesses but thrived amidst the pandemic. Online sales in June 2020 increased exponentially year-on-year, recording a whopping 151.2% growth. 

A recent joint study by e-commerce aggregator iPrice Group, online behaviour platform SimilarWeb, and mobile marketing platform AppsFlyer showed that Singapore recorded the highest surge in online shopping website traffic, witnessing a year-on-year increase of 35%. The study also noted, “that Singapore consumers spent an average of S$83.5 per order in 2020. This is the highest among the Southeast Asia (SEA) countries”.

Ethan Hsu, head of retail at Knight Frank Singapore, was quoted in a report on Business Times saying that the pandemic underlined the importance of online presence for retail outlets. This sentiment was echoed by Joel Leong, co-founder of e-commerce rewards site ShopBack, who said, “retailers need to continuously improve their e-commerce strategy and remain adaptable and nimble to seize opportunities”.

However, market observers are quick to caution that while the digital revolution gathers pace, it would be remiss to totally write off the prospects of brick and mortar outlets. The Gen Y and Gen Z generation, who will make up the lion’s share of future shoppers, are seen as a group that place emphasis on shopping experience. They may shop in a physical store before deciding on making a purchase on a platform that is most convenient for them.

Savills Singapore’s executive director and head of retail and lifestyle, Sulian Tan-Wijaya, in a recent interview with Business Times said: “(Gen Y and Z shoppers) are savvy and discerning and drive trends in retail. Contrary to popular belief, they would happily shop offline and even queue to spend thousands of dollars given the right experience and brand story.”

This approach that involves the combined offerings of retail stores, both physical and online, is called the omnichannel strategy. Such has been the meteoric rise of the omnichannel strategy that there are roles in some companies specifically dedicated to overseeing the successful execution of this retail approach. For instance, Walmart recently announced the appointment of a Chief Omni Strategy Officer.

As the omnichannel retail strategy is one that involves cross-channel shopping across a combination of different platforms, both online and offline, the onus is on businesses to provide a seamless shopping experience across all touchpoints. Below we examine how businesses can execute a successful omnichannel retail strategy.

Strong operation and technology foundation

The success of the omnichannel retail strategy rests heavily on how much a business invests in key IT infrastructure. A powerful back-end system that addresses all pain points in the delivery of services and products to customers is of utmost importance.

Modern-day cloud enterprise resource planning (ERP) systems lie at the heart of a strong omnichannel retail execution. The ability of a cloud ERP system to consolidate data from multiple disparate sources will provide a strong central hub. This ensures a one-stop 360-degree view of every single touchpoint in your omnichannel retail business. 

Real-time view of key business processes

The key in any retail strategy moving forward does not rest solely on going digital, but it relies more on the ability of businesses to respond swiftly to customer demands. The CEO of Zalora, Gunjan Soni recently reminded businesses that “we can’t control the environment but what we can control is making sure that we are able to react very, very fast”.

In addition to offering a 360-degree view of your business, what makes cloud ERP systems stand out is that every data that is presented to you is taking place real-time. This means businesses have their fingers on the pulse, enabling them to turbocharge the delivery of services and products to customers.

Business Intelligence

One of the prerequisites for businesses in the digital age is having strong analytical tools at their disposal. Consumer behaviour for omnichannel customers is one that varies, and it is the obligation of businesses to make sense of the myriad of data at their disposal in order to offer a highly personalised shopping experience.

Analytics is one of the key strengths of cloud ERP systems. By consolidating data from different sources and in real-time, cloud ERP systems are equipped with predictive tools that can help businesses unlock new insights.

In a nutshell

Benjamin Franklin said death and taxes are the only certainties in life. Well, what did he know? You can now add disruptive business markets to the list of certainties. Technology has altered the business landscape at such a rapid pace that it would be folly to predict what retail may look like in 10 years time.

But what is certain is, if you are a business that is willing to ride on the crest of the digital wave and make sound investments in technology, you can rest assured that you are equipping your business with the ability to be nimble and respond fastest to the rapid pace at which changes take place in the market.