TL;DR – But retail bosses, beware! Innovate or Die!
Retail business is tough in Singapore.
Firstly, rental is high and the footfall usually doesn’t justify the rental per square foot. Our domestic market is small. Secondly, manpower cost is high. This, coupled with the fact that it is hard to recruit and retain local retail staff, makes this part of managing the business tough. Recruitment and training costs can be high too due to high turnover.
Those in retail would know that retail is detail. By this, it also means watching over every dollar, every cent, every percentage of spend. And this means ensuring that the gross profit margin is maximised, and all other costs are kept efficient.
And of course, there is also increased competition from online and overseas shopping.
As we read about international brands exiting the Singapore market and of retailers closing or consolidating, we wanted to find out if retail (floor) workers are worried about the future of retailing in Singapore, and more specifically, whether they fear about their job security.
Turns out the retail workers ain’t worried for their future
All of the 10 retail workers we spoke to shared very similar views.
- Retail is not dead.
- There is a severe manpower shortage when it comes to local retail talents.
- There is progression in the industry, you just have to work hard for it.
- Local retail talents are pretty much like “prized possessions”.
- Retailing teaches you plenty, and yes, that includes skills that you can easily transfer to another job if you want to switch industry or job.
So yea, they are not exactly fearing for their job security, as they have confidence they can easily find another job, be it in retailing or crossing over to some other industry.
Why are the retail workers not worried?
Shane, 21, has been working on the retail floor for about a year. He does not think that retail is dead.
“Even though it’s true that online shopping is easily available now, but there are still a lot of tourists and locals who prefer to see and try the product before purchasing. Creating a bond with our walk-in customers also brings them back, hence I believe that the industry is definitely still relevant.”
Mr Chew, 32, has spent five years in the retail industry and is currently a Store Manager. Chew shared, “I think that the biggest changes in this industry over the last five years have to do with the customers’ profile, their buying pattern and spending power.”
“Conceptually, consumers feel that online is the new way of shopping, however in Singapore, it appears that the bricks and mortar way is still the traditional and main way of shopping… Just look at all the new malls that keep coming or upgrading. There are also plenty of new businesses opening up.”
Mr Ho, 39, is now an Area Manager after eight years in the retail trade. He, too, doesn’t think retail is dead.
“Retail will always be here. Retail is still a major contributor to tourism. If you look at government spending, marketing spend, developers’ and mall operators’ spend, you can tell that retail will still be around. The challenge is locals are now so well-travelled and they are spending money overseas.
And also, online shopping. So the relationship between the brands and customers is very important. Brands need to innovate, refine and sharpen the service element and make the customers come back. It is not just about selling the products per se anymore.”
But the retail bosses should be worried
Due to digitalisation (and also globalisation), many industries are seeing sea change. Digitalisation brings about plenty of opportunities, as with new technology, there can now be new, different and more productive ways of doing things. Or previously un-served or under-served markets can perhaps now be tapped with the new technology.
We say these are “opportunities” and they are for both existing players to take advantage of, as well as for new entrants.
So if you’re an incumbent in the market, and you pick up the new tech and apply it to your business to increase market share, to better serve your customers, to increase efficiency, to cut costs, then good on you.
But if you’re an incumbent and you do not do anything with the new technology and trends and you continue to do your business same old same old, then the “opportunity” then becomes a “threat” because someone else might seize that opportunity and out-sell or out-serve you. And that “threat” can come from yet another incumbent in the market or it can also come from a completely new player.
With so many retail businesses shuttering their stores, exiting markets, it is actually the retailers who need to be worried, and not the retail workers.
The retail workers, if resourceful enough, can easily find another job. They can move to work for another retailer who is more successful in serving their targeted segment, or they can move to work in another job.
Mr Ho, an Area Manager with eight years’ retailing experience, shared that the retailing business is dynamic and evolving and hence, it is critical that retailers adapt and adapt quickly to take advantage of the new technology and new opportunities.
“There’s so much happening all the time, it’s very dynamic. And the job involves all sorts of work, from people management, to the science of retail. Over time, customers’ profiles and consumers’ behaviour change as well. So trends and changes are inevitable, the cycle just keeps going on and on. We need to keep up.”
“In terms of challenges, skills required for retail and people management are less dynamic and these skills are easily portable. But in the backend and in terms of business management, it is a different ballgame. Marketing, technology, logistics, etc etc etc, there is a whole lot of things going on. Whilst you can say these pose challenges, but I think there are more opportunities in all these new developments than there are challenges.”
“The online-offline experience is very important. Getting people from online to shop offline, getting the walk-in customers from offline to become fans online and build loyalty. This is something that is increasingly important that our local retailers need to get comfortable with as it is the reality and it will stay. So we have to adapt and learn to thrive amongst these.”
Checking out the cool technology in the retail industry
In the last decade, the impact of e-commerce alone on brick-and-mortar retail shops has been immense, putting even some well-known retailers out of business. This trend continues to gain strength today, with in-store traffic suffering as more and more consumers become accustomed to shopping without ever leaving home.
Other technology trends are also beginning to gain a foothold in retail. Many retail outlets are providing seamless shopping experiences – integrating online, offline and mobile app shopping so that there is a uniform customer-centric experience. Afterall, the more touch points with a consumer, the more likely the conversion rate.
Digital payments and wallets are a thing of the present and paying with your mobile phone through payment apps, QR codes, Google/Samsung/Apple Pay is becoming increasingly common. In Singapore itself, many are already paying for purchases at retail or dining establishments with the likes of GrabPay, or FavePay.
In a time where labour costs are high and there is a manpower crunch, brick-and-mortar retailers that embrace technological innovations are on the road to being more competitive.
Automated checkouts or even “walk-out checkouts are becoming a trend where shops no longer need to have staff at the cash register. Robot store assistants incorporated with Artificial Intelligence can serve customers efficiently, offer real time promotion information and allow virtual searches, all without needing lunch breaks. That said, staff of retailers might be redeployed or laid off due to this disruption.
Retailers have no choice but to innovate in order to stay competitive.
Some has shifted towards an immersive customer experience with the use of augmented or extended reality. A customer can use a retailer’s mobile app to try on watches and rings in the comfort of their own home, try on outfits in store with the help of smart mirrors that allow shoppers to make better purchase decisions or shop for furniture and with the flick of an augmented reality app to see how their home would look like with that item.
Internet of things (IoT) and Big Data are also changing the face of retail.
By collecting and analysing customer data, retailers are able to deliver highly customised and targeted marketing to said customer. This data-first strategy of pairing customers with the most relevant products and services translates into higher sales. With the use of data to forecast demand and optimise prices, retailers can afford to spend less on warehousing while managing their supply chain and distribution more effectively.
These are just examples of how technology can be applied in retailing.
We wonder how many Singapore retailers are working on applying new technology on the old retailing business.
And we wonder, even more, how many enterprising digital natives are dreaming up business plans and working them to make retailing more efficient and along the way, squeeze out the traditional same-old-same-old retailers.
Government grants and initiatives and consumers’ support for local brands would help
Did you know that there are Government grants and initiatives to help retailers digitalise their business and to train and upskill their staff?
Andrew Tan, founder of lifestyle brand atomi, a lifestyle and furniture gallery that specialises in Japanese designs, highlighted the “serious need to have a mindset shift of consumers to support good local brands.”
“If consumers do not support local brands, the mountain that retailers have to climb will be an even more difficult task. Global expansion of brands begin at home. Without protection, we can never develop strong global brands.”
Mr Koh, a local entrepreneur who has been in the retail scene for several years and wants to expand overseas, adds that local support definitely helps, which is why his company participates in local trade shows and exhibitions to beef up brand and product awareness.
Retailers, innovate or die!
We set off wanting to share the plight of how retail workers might be fearful of their future in terms of job security, only to find that they are actually in a good place, so long as they stay adaptable and open to learning new retail tech.
It is the retail bosses we should be worrying about.
Fundamentally, if you’re running your business full-time, you should be paying attention to the opportunities and threats that your business face and react accordingly.
And if you fail to seize the opportunities and if you fail to fight the threats, then perhaps your business deserve to close. Because it is not efficient.
After all, if these boss are not adaptable and quick enough to tap on the opportunities that digitalisation can bring, they could find themselves out of business soon!
(Featured image via)
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The Dive | Retail workers tell us that retail is not dead, and they’re not worried about job security
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