The Retail Industry Transformation Map (ITM) was announced by Mr S Iswaran, Minister for Trade and Industry (Industry) last week at the Singapore Retail Industry Conference (SRIC) 2016. This is the second roadmap to be announced following the launch of the Food Services ITM. The Retail ITM aims to create a vibrant retail industry, comprising highly productive retailers, local brand owners with global footprints, supported by a professional and skilled workforce.
In addition to improving productivity to address headwinds that the industry is currently facing, the Retail ITM also aims to exploit growth opportunities ahead, highlighting focus areas that retailers can improve to stay competitive. Key strategies mapped out include the need to focus on innovation and the adoption of new technologies to drive productivity and competitiveness, as well as having the flexibility to adapt to evolving trends in jobs and skills. Strong industry partnerships and internationalisation were also highlighted as central to the industry’s transformation.
Retail is an important industry in Singapore, made up of about 21,000 retail establishments contributing almost 1.4% to GDP and employs approximately 3% of the total workforce1. The industry encompasses a wide range of sub-sectors, including supermarkets and convenience stores, fashion and sporting goods, consumer electronics, department stores, jewellery & timepieces and furniture and household products.
The launch of the Retail ITM takes into consideration the challenges of the industry in Singapore, mainly attributed to fewer business travellers, lower spending per person, and consumer shifts from brick-and-mortar to e-commerce. Many local consumers have also turned to foreign e-commerce sites to find a wider variety of goods at much lower prices as compared to traditional shops.
To address the changing buying patterns of consumers, SPRING and Infocomm Development Authority of Singapore (IDA) are taking a concerted approach to help SMEs in the retail industry with e-commerce2. Retailers can look to expand their markets locally and internationally through e-channels, beyond traditional “brick and mortar” retail shops. Adoption of an omni-channel strategy is encouraged for retailers to better reach out and support targeted end-to-end consumer needs across both online and offline channels.
“Integrating brick-and-mortar retail with e-commerce will be useful for business growth. Another benefit is for retailers to build customer communities and be able to engage their customers more effectively”, said Dhinakaran, President of Singapore Retail Association and Board Member of Singapore Productivity Centre.
To help alleviate retail manpower crunch at both store-front and back-end, and to drive operational excellence, the piloting of emerging technologies needs to be considered. The deployment of humanoid assistants to provide customer service, as well as RFID applications for inventory management, automated retail services and cashier-less stores are some of these possible solutions. Retailers can also look forward to utilising Augmented Reality (AR) to enhance seamless experiences in store and at home.
The retail industry is anticipated to see less rank-and-file and more skilled workers performing roles significantly distinct from traditional job scopes. Trends such as e-commerce and omni-channel retail models will pave the way towards a leaner workforce. The industry is encouraged to upskill workers in the latest in-store technologies to meet the anticipated demand for specialists in digital marketing, e-commerce and data analytics.
Besides providing SMEs with access to e-commerce platforms, SPRING is also working with Singapore Workforce Development Agency (WDA) to conduct master classes on omni-channel retailing and digital marketing3. To date, more than 25 companies have benefitted from these classes. The agencies will introduce more initiatives to build up omni-channel retailing capabilities in local enterprises. SPRING and WDA will also embark on a Job Redesign Study in Oct 2016 to develop frameworks for retailers to review their business models and implement job redesign to create higher value-adding jobs.
Internationalisation is critical for growth in the retail industry, given limitations in our domestic market. To facilitate retailers’ entry into overseas markets, businesses can partner international e-commerce platforms for better outreach to overseas clients. Retailers can participate in International Enterprise (IE) Singapore’s e-commerce partnership platforms or tap on their Global Company Partnership Grant to develop digital marketing capabilities.
Retailers can also seek out the services of industry partners for growth in overseas markets. The Singapore Retail Association (SRA) and the Singapore Productivity Centre (SPC) have worked in tandem to organise industry initiatives such as the SRIC, which facilitate learning and networking opportunities. SRA has subsidiaries which run numerous skills and management courses for businesses as well. SPC too, offers various services like consultancy in the areas of process optimisation and business re-modelling. It also conducts annual benchmarking studies, and organises seminars and learning trips for the industry.
Mrs Kee Ai Nah, Group Director (Industry & Enterprise), SPRING Singapore, said “In these challenging times, retailers have to strengthen their business models and seize opportunities in growing areas. To stay competitive, they must explore innovative solutions and strive towards highly productive manpower-lean formats. We encourage retailers to tap leverage technology and retail digitalisation efforts to enhance growth.”
Developed by SPRING in partnership with trade associations, unions and the industry, the Retail ITM is aligned with the Industry Transformation Programme announced at the 2016 Budget. It systematically lays out four principle pillars – productivity, innovation, internationalisation, and jobs and skills.