The Singapore Retail Report
Trends and insights shaping the industry
10,000 businesses, from 23 markets
Then we asked 40,000 consumers from 26 markets, including 1,001 from Singapore, if they’re getting it right.
Welcome to the Singapore Retail Report 2022:
The shape of ambition
When faced with sudden and significant change, we are compelled to examine our hopes, fears, and ambitions in a new light.
The pandemic had a huge impact on Singapore. Two years of circuit breakers and restrictions on travel was always going to be a challenge for a market that is famous for its nightlife, highly sociable culture and economy that revels in international tourism.
But in a typically pragmatic fashion, Singapore businesses adapted and found a way to survive and thrive during challenging times, showing incredible positivity and resilience. Whether that's shifting online, creating new contactless experiences, or booking systems for customers to visit stores, businesses in Singapore have led the way in embracing technology to engage with their customers.
As a result, 68% of businesses across the retail, food and beverage, and hospitality sectors grew in revenue by 20% or more in 2021.
Digital transformation has played a pivotal role. In the face of enormous pressure and uncertainty, an overwhelming 97% of businesses in Singapore have chosen innovation, and plan to invest in the coming months. Businesses are optimizing processes, breaking down silos, growing loyalty, helping communities, and working towards a better future.
With things seemingly trending in the right direction, businesses are once again examining their ambitions.
Ambition comes in many shapes and sizes. As do customer expectations. There are challenges on the horizon, in evolving risk, regulatory complexity, and rising competition. But now you know what’s possible. And you know that your adaptability and willingness to use technology to improve your business and customer experience hold you in good stead.
These insights and recommendations are provided to help you shape, grow, and realize your ambitions for 2022 and beyond.
Digital transformation is a $17 billion opportunity.
In spite of – or perhaps because of – the multitude of pandemic-fueled challenges hitting retail, food and beverage (F&B), and hospitality over the last year, businesses around the world managed to invest in digital technologies. The goal? Improving operations and breaking down silos in backend processes and systems such as payments. More than 1 in 4 businesses connected payment systems to other parts of the organization, such as inventory management and supply chain.
This proved to be the right move. 56% of respondents say their business is now in a better position due to their investments to improve operations. And customers agree, with 68% of consumers believing retailers used technology well to make their products available during the pandemic. No wonder 97% of businesses plan to invest further in this area in 2022.
With so much investment planned, it’s time for businesses to take a holistic view of digital transformation. Connecting operations and customer experience is key to success – not just in terms of sales, but also operational efficiency.
Our studies show that 70% of businesses that connect their payments systems across the organization grew by 20% or more and 79% of businesses that connect online and offline systems expect to grow by 20% or more in 2022.
Digital transformation is expected to continue opening up a wealth of opportunities. Our research found that 77% of businesses expect to grow by 20% or more in 2022. Overall, hitting these growth ambitions equates to a SGD 17 billion opportunity – and with so many planning to invest further and grow bigger, that number could be even higher. In fact, if technological adoption is accelerated, the retail sector could add 3.9 percentage points to its growth rate over the next five years.
How does Singapore compare?
Keith Tan — CEO & Founder, Crown Digital
From insight to action
Connecting opportunities with unified commerce
Businesses that consistently perform the best are those that can combine their physical and digital worlds to create a fluid, channel-agnostic experience, which prioritizes the customer. This is unified commerce, the next level up from omnichannel sales.
Omnichannel businesses are great at delivering cohesive cross-channel experiences to their customers. But behind the scenes, backend systems are often unconnected, complicating cross-channel reconciliation, limiting the experiences businesses can offer customers, and hindering their operational agility across multiple channels and regions.
With unified commerce, payments from all channels – online, in-app, and in-store – feed into the same system. This gives businesses more targeted, data-driven decision making, and a more seamless, flexible experience for customers. It also keeps businesses agile since they can add new channels and support new customer journeys quickly because everything’s connected.
67% of consumers believe that retailers should deliver the same cross-channel flexibility they provided during the pandemic.
The flexible, tech-driven experiences made available during the pandemic have blurred the line between sales channels and encouraged the rise of nonlinear customer journeys. Businesses are providing new or simply different ways to shop, from the convenience of click and collect to the perks of brand-owned apps – and customers love it. 64% of shoppers reported using shopping apps more frequently during the pandemic than previously, higher than the APAC and global average of 58% and 50% respectively.
Both businesses and consumers have a taste for what’s possible with technology – and now there’s no going back. 67% of consumers believe that retailers should deliver the same cross-channel flexibility they provided during the pandemic. Keeping up with these expectations greatly improves the likelihood of repeat purchases and higher spending. Falling short could result in the opposite: 73% of consumers will not shop with organizations that have a bad shopping experience, either online or in store.
It makes sense that linking online, in-app, and in-store payments with a single system – i.e. unified commerce – has proved to enhance both brand resilience and customer satisfaction. 60% of businesses say online stores were able to offset the losses at physical stores during the pandemic.
And the more channels shoppers use, the higher their value: 48% of businesses say a benefit of unified commerce is improved customer experience, 52% say it increases customer loyalty and 46% say it helps sales. Furthermore, our research shows that unified commerce increases businesses’ performance by 6%.
This brings us to some interesting findings around loyalty programs. Singaporeans are famous for having loyalty programmes for practically everything – from groceries and shopping, to cafes and restaurants and even the doctor. But loyalty is an area that is ripe for innovation. 80% of consumers say retailers should use tech to make their loyalty or rewards schemes easier and more effective. Payments-linked loyalty apps are a good place to start, as 65% of consumers would download a retailer’s app to receive better loyalty rewards.
How does Singapore compare?
Saad Ahmed — Managing Director - Regional Head of Commercial, Grab
From insight to action
Cross-channel recognition and payment-linked loyalty
Address customer needs in real time
Payments data enables businesses to build a picture of their customers, their purchases, and their preferences in real-time, across every channel and region. With these insights, businesses can investigate their customer segments, understand their behavior, and shape their strategy with confidence.
Recognize and reward loyal customers
Use customer recognition to make loyalty programs more frictionless by removing the need for a traditional loyalty card or app. When customers make a payment online or in a physical store, businesses can automatically recognize them and award them with points, discounts, or a reward.
68% of consumers say that physical stores are an important touchpoint, even if they shop with the same retailer online.
They say absence makes the heart grow fonder, and everyone is feeling very fond of the physical store experience indeed. The majority (56%) still prefer to shop in a physical store, which is slightly below the global average (59%). However, (68% of consumers say physical stores are an important touchpoint, even if they shop with the same retailer online, above the global average of 64%.
On the business side, there is an acknowledgment that physical stores remain important, especially as restrictions continue to ease: 55% expect the proportion of revenue to increase from physical stores in the next year, and half of the retailers surveyed (51%) plan to open more stores in the same period.
But shopper expectations of in-store experiences have evolved. Singaporeans want technology to be part of the physical retail experience more than most others surveyed, with 74% being more likely to shop with retailers that use technology to improve the shopping experience.
This doesn’t mean we can stock some shelves, throw open the doors, and expect the crowds to come and spend. It’s about creating a destination that entices: 69% of consumers say physical stores should be exciting places to visit. What this means for retailers, is that their physical stores must offer something more than the products and services available online.
Technology proves pivotal in creating an in-store experience worth visiting. From endless aisle shopping – providing kiosks or terminals to check additional stock for home delivery – to offering new ways to pay through QR codes or mobile payment terminals, Singaporeans are shopping in physical stores for excitement and pleasure. For example, retailers can allow customers to purchase an out-of-stock item in store and have it shipped directly to their home, with 67% of shoppers saying they would be more loyal to these businesses.
But even more crucial is the ability to connect online and physical channels to ensure a truly seamless experience: 66% of consumers would be more loyal to a retailer that lets them buy things online and return in store. Shockingly, only 27% of businesses say they currently provide this option.
Customer and staff experiences are inextricably intertwined; any technology leveraged for in-store experiences should help, not hinder, sales teams. 58% of consumers say they would love it if in-store sales assistants used technology to assemble items from their online Wishlist in the changing room ready to try on.
How does Singapore compare?
Nathan Alexander — CTO, R.M.Williams
From insight to action
Driving in-store convenience through technology
Enhance in-person payments
Make donations easier
Make donating at the checkout easier for businesses and their customers.
Recognize your customers
Localize the checkout
Present customers with relevant languages and payment options.
32% of businesses use payments data to understand user behavior and improve customer experience.
Our research shows that consumers want businesses to recognize, predict, and meet their needs in a relevant and timely way: 54% of consumers prefer retailers who remember their preferences and previous shopping behaviors to create a more tailored shopping experience. Similarly, 52% of shoppers like it when retailers serve them with personalized adverts and suggestions.
Businesses who can leverage real time data insights instead of relying on historic data will be best placed to deliver these more personalized, sophisticated experiences.
The insights unlocked via payments data, particularly unified payments, allow businesses to act more immediately on what consumers are telling them. A growing number of businesses are leveraging this opportunity – but many are still missing out. 32% of businesses use payments data to understand user behavior and improve customer experience, and 30% to build a better picture of their customers.
Those businesses who are using payments data can identify popular product lines, inform inventory management, create personalized marketing campaigns, and inform decision making – a testament to the wealth of insights made possible through payments data.
Businesses need to strike a delicate balance. Clearly, consumers want businesses to personalize the customer experience and use technology to create unique interactions – this can’t be achieved without data. But there are a few crucial things to keep in mind. The Personal Data Protection Act (PDPA) provides a baseline standard of protection for personal data in Singapore. It complements sector-specific legislative and regulatory frameworks such as the Banking Act and Insurance Act. Singaporeans are also extremely trusting in nature and tend to be fairly compliant – the degree to which people tend to follow rules is high.
40% of consumers believe retailers shouldn’t be able to use their data or purchase behavior information unless they give express permission. And 42% of consumers will only allow data to be stored and used by retailers if there are assurances around security and privacy. Businesses need to stay informed and compliant to protect shoppers and themselves from data breaches and fraud.
How does Singapore compare?
Casper Mooyman — Head of Marketing, Domino’s
From insight to action
Securing trust with smooth payment authentication
No ecommerce strategy is complete without a clear plan for Strong Customer Authentication (SCA), especially since consumers expect the process to be fast, with no action required from them. There’s no one-size-fits-all approach to applying SCA, but the right technology partner will take care of this for businesses.
Implementing authentication protocols, even when required by regulations, helps to reduce fraud – but there are additional steps businesses should take to ensure secure payments.
With the Adyen Authentication Engine, we won’t trigger 3D Secure for out-of-scope transactions or exemptions. We'll also skip 3D Secure if the issuing bank doesn’t enforce it.
A resilient industry with new ambition
Whilst resilience and adaptability have been key themes of the last few years, there is also opportunity. Singaporeans’ preference for technology to permeate the customer experience presents a significant opportunity. Businesses that get ahead in the digital transformation journey, who connect online and offline systems and embrace technology to enhance in-store experiences, will not only survive but thrive moving forward.
At Adyen our focus is, and always has been, on supporting long-term, sustainable growth. We’re committed to ensuring that our customers remain at the forefront of this ever-evolving industry and look forward to speaking with you about how payments can be the strategic growth driver you’re looking for.
Opinium Research LLP polled 40,020 adults in Singapore, Hong Kong, Japan, Australia, UAE, the UK, France, Italy, Spain, Portugal, Germany, Poland, Belgium, the Netherlands, Brazil, Norway, Denmark, Sweden, USA, Canada, Malaysia, Mexico, Ireland, Austria, Switzerland and India. Respondents were incentivized to participate.
Censuswide polled 11,530 merchants in Singapore, Hong Kong, Japan, Australia, UAE, the UK, France, Italy, Spain, Portugal, Germany, Poland, Belgium, the Netherlands, Brazil, Norway, Denmark, Sweden, USA, Canada, Malaysia, Mexico and Ireland. Respondents were incentivised to participate.
Fieldwork was conducted between 23 December 2021 - 8 February 2022.
The sample includes minimum quotas of 100 in retail, 50 in travel and hospitality, 50 in food & beverage per market.
Opinium and Censuswide campaigns are conducted in accordance with all ESOMAR principles and best practice.
We commissioned the Centre for Economics and Business Research (Cebr) to provide analysis on the current state of retail, hospitality, and F&B businesses around the world.