Refreshing the retail experience

Robinsons may have endured the Great Depression in the 1930s, stood up to bombings of World War II and even a deadly fire that gutted its store in 1972 did not kill the brand. Alas, it was the Covid-19 pandemic that dealt the final blow, forcing the brand to shut its two outlets here early this year, along with two others in Malaysia.

The stark transformation of Robinsons is a good example of how the industry is evolving. A large part of the Robinsons shopping experience was the fun of browsing through the wares available on display. In its new incarnation, this can now be done through a simple search for whatever you desire — whether it’s new bed linen, a stainless steel wok, or a trendy blouse.

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See: Shopline sells social commerce to Southeast Asia

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See also: Foodpanda sees growth in food and grocery delivery services

“Closing any business is not a pleasant task, especially having to shut down a business with such a colourful and illustrious history as Robinsons, which was all the more disheartening,” Robert Teo, liquidator for Robinsons’ business in Malaysia, told the New Straits Times.

With its head office based in Singapore, the newly independent Robinsons Department Stores Online is headed by Jordan Prainito, former managing director of Canningvale Australia and a third-generation member of Canningvale’s founding family. Started in 1977, the company began as a towel manufacturer, eventually supplying US retailers Bloomingdales and Macy’s before building out its own e-commerce site in 2010.

“The global pandemic has expedited the mainstream adoption of online shopping. We think now is the right time to pivot to a digital-first strategy,” says Prainito, 29, who had lived in Singapore for four years while studying at the Lasalle College of the Arts.

Robinsons Online’s Prainito: The global pandemic has expedited the mainstream adoption of online shopping. We think now is the right time to pivot to a digital-first strategy

Given the circumstances, building a successful online storefront is now more urgent than ever for retailers and brands, as they struggle to remain in business while attracting consumers who are stuck at home.

With vaccinations underway, the world is slowly but surely wresting victory from the jaws of the pandemic. Market watchers see a light at the end of the tunnel for retailers but has Covid-19 tightened the purse strings of shoppers? What does this mean for the retail industry and should they follow Robinsons’ lead by shuttering their stores and going completely digital?

In the early days when e-commerce was still emerging, most brands and bricks-and-mortar stores viewed it largely as a threat. Market watchers even predicted how e-commerce marketplaces would eventually drive physical retailers out of business as online webstores are open 24/7, enjoy lower overheads, and offer customers exclusive deals and even same-day deliveries.

How times have changed. To stop the community spread of Covid-19, shops have been ordered to shutter for months at a time, accelerating the shift of retailers online. What was previously seen as a competitor is now a much-needed partner.

According to R Dhinakaran, president of the Singapore Retailers Association (SRA), bricks-and-mortar retailers had indeed looked at e-commerce as a threat just a few years ago. Many did not understand the medium and were lagging behind in embracing digital platforms.

SRA’s Dhinakaran: The global Covid-19 pandemic brought much destruction to retail businesses. For those already struggling, it decimated them

“In the last 18 months, however, many have begun their e-commerce journey and now realise that they must engage consumers on this medium or lose market share. The emergence of strong marketplaces over the last few years has also enabled retailers to enter this arena in an easier and less expensive way,” adds Dhinakaran.

Some now even see online retailing as a lifesaver. “Today, retailers do not see e-commerce as a threat but look upon it as an enabler to broaden their reach, and control escalating and unsustainable costs in the physical space,” he says.

The new normal

At the end of lockdowns, whatever hopes retailers had for a “revenge shopping” phenomenon were dashed by strict social-distancing measures, which placed a limit on the number of people in a physical store at any time. The subsequent long queues also made for an unpleasant shopping experience, and the once busy and bustling Orchard Road shops now seem less fun with a much smaller group of shoppers.

In many areas outside of retail, the phrase “new normal” — the new state that an economy, industry or society settles into following the crisis — has been mentioned so frequently that it is in danger of losing its significance. After more than a year of living under some form of lockdown, consumers and businesses alike have already grown accustomed to these new habits.

According to PayPal’s 2021 Borderless Commerce Report, the pandemic has created mass uncertainty across “almost every facet of business operations”. However, consumer confidence is beginning to grow again despite the uneven global recovery. The survey also found that global online retail sales surged to US$4.28 trillion ($5.82 trillion) in 2020 from US$3.35 trillion in 2019.

The same retail phenomenon is happening here in Singapore. “The coronavirus plunged the Lion City into its deepest recession in history, propelling the government to dip into reserves to mitigate the fallout. But while Singapore’s economy contracted, e-commerce surged,” reads PayPal’s report, which concluded findings of its survey conducted across 13 markets globally.

According to the report, e-commerce platforms in Singapore experienced a 23% growth in website visits during the first six months of 2020. Based on the frequency of visits, the top five e-commerce sites here were Shopee, Lazada, Qoo10, Amazon and Ezbuy.

In addition, consumer price sensitivity was the highest in Singapore when compared to the region. Nearly 56% of Singaporeans used e-commerce to benefit from lower prices and greater access to products, hinting at high prices set by bricks-and-mortar retailers here.

Delivery costs were the main deterrent for Singaporeans when shopping from other markets while 22% would not shop from an online store if customer support was not available in English. While credit cards remained the most popular payment choice for 67% of Singaporeans, PayPal was used in 31% of cross-border transactions.

What can businesses take away from these findings? Rakesh Krishnamuti, head of enterprise sales for Southeast Asia at PayPal, says in these times, merchants need to first prioritise business survival as their most urgent and critical need.

The next important step is to build their online presence and offering, Rakesh adds. “For small merchants that have just come to the market, they should first start building their online presence, such as creating a webstore and establishing a presence on social media.”

With the rise of social commerce, merchants should also create “mobile-first experiences” that may attract customers to visit their physical locations, says Rakesh in an email to The Edge Singapore. “Eighty per cent of shoppers stop transacting on sites with a poor experience … Merchants need to think more holistically about captivating shoppers through the entire customer journey if they are to attract and retain customers for the long term.”

The rise and rise of social commerce

For families who make a day out of heading to the shops, the weekend retail experience has changed dramatically in under a decade. Gone also are the days of shopping malls with grand atriums and eager sales assistants beckoning to customers at the entrance of every store. To purchase anything from toilet paper to a new television set, shoppers simply swipe their phones and click to place orders, all without leaving the safety of their homes.

According to PayPal, 83% of Singaporeans will use their smartphones to access the Internet, making it crucial for merchants to ensure that their websites are optimised for a seamless, secure checkout process by mobile.

Buttons that urge viewers to “shop now” are also turning social media users into shopaholics. According to Bain & Company, social commerce, as this trend is dubbed, accounted for about 44% of Southeast Asia’s e-commerce market last year.

Meanwhile, PayPal reports that the most popular social media avenues for Singaporean shoppers were Facebook as well as its messaging services Instagram and WhatsApp.

Benjamin Joe, vice-president of Southeast Asia and emerging markets at Facebook, says the social media giant is working on evolving along with the e-commerce sector in Southeast Asia. “We see ourselves as the discovery platform facilitating commerce for all by making shopping seamless, and to empower anyone from a small business owner to a global company.”

More consumers are spending more time online than ever before, experimenting with more products and services, adds Joe in an email to The Edge Singapore. This, in turn, has sped up the digitalisation trend. “In Southeast Asia, five years of digital consumption happened within a year,” says Joe.

On average, digital consumers shopped at an average of 5.2 websites in 2020, up from 3.8 in 2019 — a one-year increase of 40%, says Facebook. Brands looking for conversions have to create a fast and lasting impression. “Creating sticking experiences on the website and app platform is key for brands to attract and retain consumers regardless of geographical boundaries,” says Joe.

“This means creating a seamless and reliable shopping experience for consumers — from discovery and research to building a cart and checking out — adds to the shopper experience that helps build loyalty and, in turn, converts them to loyal customers who will not only keep coming back but also recommend you to others,” he adds.

Despite the strides made towards e-commerce, Joe stresses that an omnichannel approach — where customers have multiple touchpoints with brands — is still the most effective strategy. “Even as online becomes the primary source of discovery, it will be critical for businesses to develop capabilities to meet their consumers where they are.”

The retail revolution, it seems, flows both ways. “While traditionally offline businesses will need to capitalise on online moments and harness the power of digital technologies to further optimise the shopper journey, online businesses should also consider going offline to extend multiple touchpoints to better reach their target audience,” says Joe.

Mega-sales days

Even with retail stores back up and running, e-commerce platforms are still sucking in more retailers and shoppers. Amazon, for example, saw 17,000 small businesses join its platform during its Prime Day 2021 on June 21 and 22, a 40% increase from the previous year.

With foot traffic limited at shopping malls, Singaporean homes became the city state’s biggest retail hubs. It is no wonder Singapore took its biggest sale event of the year, the Great Singapore Sale (GSS), and moved it online.

Organised by the SRA in partnership with stores and malls to promote the tourism industry in Singapore, the annual GSS typically runs for two months in the middle of the year. Last year was unique, as Singapore’s “circuit breaker” lockdown coincided with the start of the GSS period, forcing SRA to postpone the GSS and move it online as uncertainties loomed.

From a strictly physical event in its earlier years, GSS transitioned to include online sales from 2017, leveraging digital and marketing tools like virtual reality and livestreaming to connect with consumers.

GoSpree is SRA’s online market tool, which has been in use since 2017. Taking the form of a mobile app for shoppers, GoSpree lets retailers share digital coupons for consumers to redeem in-store. “In 2020, SRA pivoted GSS to online and named it ‘eGSS 2020’ to encourage and promote online retail due to the Covid-19 pandemic. We also enhanced Go­Spree to include an eGSS Catalogue, the Furniture Centrium (a virtual reality furniture mall comprising 30 furniture retailers) as well as an in-app feature that will direct shoppers to retailers’ e-commerce sites or their nominated e-commerce sites, for direct purchase,” explains SRA’s Dhinakaran.

This year, SRA collaborated with e-commerce giant Lazada to launch its 2021 edition of the eGSS. “SRA’s collaboration with Lazada for this year’s eGSS is to reinforce to retailers the merits of embracing a strong e-commerce marketplace platform and leverage on the platform’s many in-app features to engage shoppers as well as take advantage of frictionless shopping from purchase to delivery,” says Dhinakaran.

“Shoppers can also opt for in-store pick-up and in-store redemption of shopping vouchers to offer shoppers more options in the way they wish to transact with the retailer. This also enable retailers to upsell when shoppers do visit the physical store,” he adds.

This, however, does not spell the end for the physical GSS event. Dhinakaran explains that from now on, GSS will continue to happen both online and offline, providing opportunities for retailers to have a consolidated platform to attract consumers to shop.

James Chang, CEO of Lazada Singapore, calls this year’s eGSS a “huge success”, with one in five Singaporeans shopping on Lazada in the first 24 hours. “Naturally, this translated into higher sales for our merchants, with 2,000 of them selling more than $10,000 during the 6.6 [to] 7.7 time period, with the top categories being health and beauty, electronics and groceries.”

Lazada grew its merchant base by more than a third and witnessed a sixfold growth in the number of merchants utilising LazLive, Lazada’s livestreaming feature, he adds.

Singaporeans are adapting to the lockdown restrictions, and so are their spending habits, says Chang. “It is heartening to see that sellers are leveraging our platform to improve their brand awareness and user engagement via LazLive, helping to revamp the e-commerce experience for consumers in Singapore and across the region.”

Such mega-sales days (MSDs) are the main drivers for online shopping adoption in Southeast Asia, according to a June report by Facebook and Bain & Company. MSDs are defined as large-scale shopping events that span several days across the year. These include the 10.10 Sale, the Singles’ Day Sale on November 11, Black Friday, Cyber Monday, the 12.12 Sale and the Boxing Day Sale, among others.

Some 86% of shoppers surveyed in Southeast Asia purchased products online during MSDs. Of this number, 43% said that their first MSD was also their first time shopping online. The report involved 3,919 internet users aged 16 to 64 during 4Q2020 across six Southeast Asian countries: Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

The massive marketing campaigns created by e-commerce platforms imbue the MSDs with an almost festive air, urging consumers to loosen their purse strings. As a result, 67% of shoppers reported buying from categories they would normally not spend on.

With MSDs taking place more frequently across the region, shoppers are also becoming savvier in anticipating such sales moments. 72% of shoppers plan their purchases in advance, particularly for big-ticket purchases like smartphones and accessories (56%), home living and groceries (52%) and beauty and personal care (51%). Meanwhile, impulse purchases during MSDs were more common among food and beverages (47%), women’s fashion (39%) and men’s fashion (37%).

Despite Facebook’s current efforts at converting users to shoppers, e-commerce platforms still account for an overwhelming majority of online purchases. Some 92% of shoppers made a purchase on e-commerce platforms during MSDs, while just 26% shopped on social media platforms.

“Despite the current restricted business environment, Southeast Asia’s digital economy is still on track to cross US$300 billion by 2025 with over 40 million people coming online for the first time in 2020,” says Praneeth Yendamuri, partner at Bain & Company.

“At present, only 70% of the region is online and we foresee events like mega-sales days playing a significant role in further helping the region unlock the full potential of its digital economy.”

The O2O phenomenon

Although this may be a key moment for retailers to hop onto the online bandwagon, that does not necessarily spell the death of bricks-and-mortar stores. Instead, they complement each other, creating a retail strategy known as the online-to-offline (O2O) or omnichannel retail.

Just like how the eGSS pushes out options for shoppers to pick up their shopping from a physical store or purchase shopping vouchers to redeem in-store, there is still a need to keep these physical stores alive and leverage e-commerce to do so.

“Retailers recognise that consumers today are looking for an omnichannel experience from brands where both online and offline experiences cater to their needs — online for exploratory and research and offline for store and purchase experience — and are responding to it positively,” says SRA’s Dhinakaran.

Superapp Grab says in an article: “Now is the time for retailers to adopt an omnichannel approach and focus on mobile.” Citing data from Malaysian online shopping aggregator i­Price, 72% of Southeast Asian e-commerce traffic now comes from mobile while the gap in cart sizes across devices is narrowing.

“Just like with a bricks-and-mortar store, when you’re selling online you need to be where your customers are. You could offer the most amazing products on the market but if your sales are primarily from foot traffic and your store is nowhere near where people walk, you’re not going to do well. It’s the same online,” says Grab, adding that social media is now a popular platform for retailers to engage with their consumers. “If you want to maximise your sales, you need to be everywhere they are.”

However, the online and offline experiences are different and it may be complicated for retailers to consolidate sales and stocks concurrently. With that comes the rise of companies that are in the business of e-commerce logistics Software-as-a-Service (SaaS).

One such company is the Singapore-based Anchanto. Its CEO, Vaibhav Dabhade, explains the growing field to The Edge Singapore: “Software-as-a-Service (SaaS) technology is a choice ideal for retailers of all sizes. Given its high agility and easy accessibility, SMEs can easily equip their business with modern technology on a ‘plug-and-play’ basis. This is significantly useful for SMEs as they need to maintain leaner operations with clear visibility on their cash flow.”

He notes that the post-purchase experience of a consumer is also something retailers must not ignore as it could very well be as important as the product being purchased. “Supported with the right technology, businesses can start offering game-changing O2O services like ‘try-and-buy’, ‘click-and-collect’ and more. This will not only result in increased sales but also a superior customer experience,” adds Dabhade.

Beyond geographical boundaries

“In another significant shift, many of our surveyed markets reported greater comfort level with cross-border shopping,” reads the PayPal report. For cross-border sellers, the most promising developments lie in the number of new online shoppers and the higher totals per shopper, as consumers turned to online channels for more of their everyday needs during a lockdown.

As shoppers became more comfortable in the online environment, they became more comfortable shopping globally. Across Pay­Pal’s surveyed markets, 22% said they became more comfortable with cross-border shopping since the pandemic. This could also be a result of travel restrictions. The statistics are higher in Singapore, as 78.1% of Singaporean online shoppers surveyed stated that they only shop cross-border or a combination of cross-border and domestic. This is the highest of all the surveyed markets.

“At the same time, new shopping choices are everywhere, and online shoppers have high expectations for value, convenience, security and overall experience,” says PayPal in its report.

With e-commerce platforms, retailers of any size can easily expand their presence overseas and capture a whole new market. Gone are the days of meticulously planning an entry into a market while running the risk of receiving a less than stellar response. Instead, by just creating an online presence for the brand and relying on logistics, their products can easily cross borders and reach new shoppers.

With that, Lazada’s Tmall Global has seen high traction among companies within the region, hawking their wares to the massive Chinese market. China, in particular, has a high barrier to entry for retailers. Cultural differences, in particular, are oft-forgotten by several business owners hoping to break into China’s consumer market.

However, thanks to e-commerce platforms, businesses can mitigate this risk by listing their product online in Tmall and immediately reaching out to the Chinese market. Plus, with travel restrictions still ongoing, businesses don’t have to worry about putting off their expansion plans and just go online.

“The global Covid-19 pandemic brought much destruction to retail businesses. For those already struggling, it decimated them,” says SRA’s Dhinakaran. “At some point, eventually, life will return to normal or a new normal. People will still need to wear clothes and shoes, and while they never stopped buying these during Covid-19, we expect that with the recovery, expenditure will go up domestically.”

“What will probably change is where consumers buy goods from. Obviously, by then, many would have gotten used to buying on the Internet.”

Photo: Shutterstock