Singapore fashion retailers are going digital at a pace like never before, driven by government incentives as much as the constraints of the pandemic. But the journey can be confusing, frustrating, and sometimes result in missed opportunities.
Retailers who are new to the game often struggle to define what digitalisation should look like. Those already underway with it start energetically but can find it hard to maintain the pace. They are overwhelmed by the varying costs of implementation, and the pressure to get to grips with data and analytics. But it doesn’t have to be difficult, and the right e-commerce partner can make all the difference.
A simple setup changes everything
In fashion, products can change hands in seconds, and retailers have a hard time keeping up with their inventory, not to mention responding to enquiries manually across different platforms.
This is where omnichannel retailing comes in. The term sounds daunting, but it becomes less so when you realise that it essentially means controlling everything including inventory, payments, owned online channels, physical stores and social media assets, from a single dashboard. Taking this step can reduce manpower costs as well as errors.
Retailers should also aim to automate their processes as much as possible. As their business grow, they may find it challenging to keep up with manual inventory updates and have the necessary manpower to fulfil fast delivery orders.
One retailer overcame these challenges by using an all-in-one platform to run smart advertising that shuts off as soon as a product sells out, as well as unify orders through live selling. This enabled the retailer to fulfil orders in just 30 minutes, compared to the two hours it used to take.
Fashion retailers often assume that shifting online means guaranteed revenue. But the investment does come with a certain level of responsibility. The most versatile retailers are those who are open to adopting an integrated approach, meaning they are willing to spare a part of their budget on digital marketing like social media advertisements. Thirty percent of Shopline’s merchants opt for digital marketing solutions and in return, they experience a six times uplift in returns of ad spends.
Merchants should also look into fresh approaches when pushing out new products to differentiate themselves from their competitors. In addition to their day-to-day tasks, monitoring consumer data is important as a means of predicting and managing inventory.
Social commerce grows in popularity
A study by creative agency We Are Social found that there was an eight percent increase in social media ad spend in Singapore over the course of 2020. In parallel, the number of active social media users in the city-state rose by four percent to nearly five million, with Internet users spending an average of 2 hours and 17 minutes on social media a day. Against this backdrop, we have seen fashion retailers increasingly adopt social commerce or s-commerce strategies.
In 2020, the total revenue of s-commerce grew 25% year-over-year, and the global s-commerce market is expected to reach US$2 trillion by 2024. As well as seeing value in additional channels to reach out to customers directly, these retailers appreciate the potential for two-way interactions through platforms like Facebook and Instagram using Marketplace and Checkout in-app features.
Fusing e-commerce and s-commerce when going digital opens multiple opportunities for brands to generate more direct revenue. Merchants who opt for both tend to earn 30% to 50% more than those who opt for either one. S-commerce serves to meet the expectations of rapid response and peer reviews before purchase.
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The open, dynamic nature of social media mirrors what consumers expect from a shopping experience while encouraging communities to form around brands. As such, it is fertile ground for brands that play by the rules of responsiveness and transparency to generate more direct revenue.
In line with the increasing popularity of s-commerce, live commerce is growing rapidly too. Live commerce combines instant purchasing of a featured product and audience participation through a chat function or reaction buttons via the retailer’s website, app or social media channels.
According to Shopline Singapore’s data, transaction volume from live commerce grew 20-fold in the first five months of 2021. Retailers can jump onto this bandwagon effectively by leveraging live stream shopping tools that use AI technology to crunch performance statistics such as viewer counts, viewers’ actions of adding products to shopping carts, and the number of live sales.
Finding the right partner defines the journey
The 2020 SME Digital Transformation Study by Microsoft and the Association of Small & Medium Enterprises (ASME) found that 80% of Singapore SMEs are willing to embrace digital transformation. However, 40% of them are concerned about the lack of relevant skills to move onto a digital platform, and 28% do not have the right technology partners.
Working with local fashion retailers on the ground opens our eyes to their specific needs. Sometimes, I find myself chatting with merchants who think it’s an either-or situation when it comes to going digital. They pick between setting up an online website, opening a store on a marketplace like Shopee and Lazada, or opening a social media account to sell their products, not realising that these channels can be integrated in some way and that they can all be managed at the same time, as long as they understand how it works. The best part? All of this can be done at a low cost!
To put it more simply, I would say a good smart commerce enabler should be able to offer merchants ease and comfort throughout the digitalisation journey. It should help them manage their own sales channels in an organised and cost-efficient way, providing the same benefits of large-scale logistics players and marketplaces without having to work directly with them.
It is estimated that the Southeast Asian e-commerce market nearly doubled to US$62 billion ($84.6 billion) in 2021 from US$38 billion in 2020. This trend shows no signs of slowing down. The region is growing increasingly competitive, and it is advisable to compare and contrast the various digital solutions out there and speak with the representatives on the ground to find one that matches your needs. Cost will always be a barrier for merchants on their digitalisation journey, and solutions providers have a duty to price their services fairly and explain clearly what people are paying for.
Ultimately, omnichannel retail need not be overwhelming. It is here to stay and, with the right approach, technology and partner, will prove to be a great ally for fashion retailers.
Jeff Lim is the general manager of Shopline Singapore
Photo: Shopline
