Member Article

How retailers can harness technology to beat e-commerce at its own game.

“It's official: Singapore malls are dead, as occupancy reaches its lowest level in 10 years,” screams one headline. “At some suburban malls, retailers confront the sound of silence,” another chimes in.

As e-commerce takes hold, shoppers are eschewing brick and mortar in favour of the convenience of point and click. According to a PwC poll, three in five Singaporeans shop online at least once a month in 2016. This year, Amazon set up its two-hour Prime delivery service here, joining incumbents like Lazada, Redmart and Qoo10 to further entice consumers in the Republic away from traditional retailers.

How has the physical store changed in the face of the digital onslaught? Not much. It still functions largely in the same way as it did decades ago, passively displaying merchandise in the shop window, in the hope that passers-by enter the store, pick something they like and close the sale.

Yet, the experience that a brick-and-mortar establishment offers – the scent, furnishings, lighting, product display, and the important human engagement – cannot be easily replicated by its online aspirant.

The physical store can fight back, by combining its ability to deliver on the visual and the tactile, with a dose of technology to manage inventory, optimise store layout and product display, and analyse customer behaviour to predict buying trends and preferences.

Retailers and mall owners can start by looking towards data analytic service providers like Starhub to help them understand their target audiences. The telco collects and aggregates information from mobile devices and online services to provide tailored consumer insights. Through this service, businesses learn who turns up at a mall, what he likes and where he hangs out, allowing them to make decisions based on data rather than gut feel.

At a more micro level, beacons can tap into the GPS function of customers’ smartphones and wearables to track them. Such devices have been deployed in a trial to help visitors navigate Changi Airport, but what is also noteworthy is the gadgets’ ability to send retail offerings to potential customers when they are near a participating store. This can be developed further. Say a customer moves to a competitor’s store. To lure him back, the retailer can beam to his iPhone a special deal on a similar product.

Retailers may also wish to utilise data analysis and interpretation to curate a personalised shopping experience. Sephora, for instance, uses iPads to display deep, user-generated product content, such as whether a particular lotion gave a rash to anyone with a certain skin type. By scanning an item on the tablet’s camera, customers can see this additional information, read product reviews, or add it to their shopping list. These features are also available as a mobile app that’s been downloaded over 1.1 million times.

Or if you can’t beat them, join them. Capitaland is adopting a novel omni-channel approach, connecting retailers to shoppers offline and online in a tie-up with Lazada Singapore. By the end of this year, the landlord will launch a shop-in-shop on the Alibaba-controlled platform to showcase its tenants’ offerings. Buyers will have the option of collecting and returning their purchases through a unique in-mall service. For a start, CapitaLand will roll out two such unmanned click-and-collect lounges at Plaza Singapura and Bugis+. In addition to lockers, the lounges will feature fitting rooms and a product-testing bench.

There, retailers can do more, perhaps by offering a scaled-down store experience, deploying an on-demand sales assistant to attend to its customer (and, along the way, collect more intel). Or the fitting rooms can be digitalised: the retailer can offer similar products, based on the customer’s personal profile, for browsing on iPads. The customer may then request for the particular item to be sent to be tried on at the fitting room.

Given this landscape, landlords must change the use space at the shopping mall. As stores shrink due to more inventory being shipped directly from warehouse to customer, skipping the backroom, freed-up real estate can be creatively repurposed to curate unique experiences. After all, as window shopping migrates to cyberspace, consumers will need another reason to visit physical malls. Malls can drive footfall by devoting a higher proportion of floor area to experiential offerings: concept food courts, 3D cinemas, or maybe even a kitchen studio for cooking classes with celebrity chefs.

Where does all this leave the physical retail store? It will have to undergo a makeover. Work with technology to create the smart store and the seamless user experience. Internet companies may be well ahead of the curve when it comes to interpreting data, but physical retail stores know how to seduce our five senses. The marriage of the best of online and offline will give birth to the new experiential lifestyle mall.