Singapore retailers are investing for growth despite rising interest rates, inflation and the GST hike. Research released by Adyen, shows merchants are looking to invest both in brick-and-mortar and in online offerings, with most expecting to grow revenue in the coming year. At the same time, consumer expectations of retailers are also changing towards personalized discounts and more integrated shopping experiences.
Despite these trend shifts, businesses that have made such unified experiences a priority investment make up only 14% of Singapore retailers. Adyen commissioned Opinium LLP to poll 36,000 consumers and Censuswide to poll 12,000 merchants globally, including 1,000 consumers in Singapore and 507 Singapore businesses, to understand how inflation is affecting behaviour change among shoppers and how businesses are adapting to this change.
The impact of a heating inflationary environment
Singaporeans are more cautious with their spending as a result of rising inflationary pressures. 48% of them said they were spending more time hunting for deals, making them the most bargain-conscious in Asia Pacific (APAC). A further 40% said they time purchases around specific calendar moments like the Great Singapore Sale and Singles’ Day.
In response, 52% of Singapore’s merchants believe their customers expect discounts to be offered year-round in the inflationary environment, and 30% of retailers see this expectation as a key threat to business growth. Yet, regular discounts might not be the best approach to win the hearts and wallets of customers, as the research findings indicate that 77% of consumers prefer personalized discounts from retailers they regularly shop at.
The tech advantage
Singaporean businesses generally understand what makes their target consumers tick, such as a roughly equal preference for e-commerce and brick-and-mortar, especially for verticals like clothing, tech, groceries and beauty products.
In fact, 74% of Singapore’s merchants perceive having in-person stores as a competitive advantage in the crowded retail space, and 60% plan to increase the number of physical outlets in the next year. At least two-thirds of retailers are also confident in revenue growth from both online and offline platforms.
While brick-and-mortar is mounting a strong resurgence, the data illustrates that Singaporean consumers are looking for a much more unified shopping experience between online and offline channels, with 64% being more loyal to retailers that allow them to shop in-store and finish the purchase online or vice versa.
Singapore retailers still have some way to go
When it comes to enabling a seamless online/offline shopping experience, Singapore’s retailers still have some way to go. Only 37% are easily able to offer unified experiences across channels, and only 16% prioritize investments in cross-channel journeys.
“It comes as no big surprise that Singaporeans expect more out of their shopping experience. They want retailers to know their spending preferences and offer personalized discounts on their shopping wishlist as a reward for their loyalty,” said Priyanka Gargav, Country Manager for Singapore and Head of Commercial, Southeast Asia & Hong Kong, Adyen. “The imperative for retailers, then, is to connect the dots of their customers’ dynamic shopping habits across different shopping channels. Retailers that can identify and adapt flexibly to these preferences will be well-positioned to capitalize on Singapore’s retail rebound.”
Balancing security and frictionless experiences
While Singapore’s retail experiences have leveraged technology to be more engaging, varied and omnichannel, fraud, especially through e-commerce, continues to be on the rise, and it is estimated that Singapore consumers lost an average of US$253 (S$339) to payments fraud. Such issues are pushing more consumers to expect safety mechanisms to be employed when making purchases: 35% of consumers use biometrics to authenticate transactions online and in-store, and 36% prefer to have retailers use technology to prove their identities.
The battle against fraud
The battle against fraud has also impacted Singaporean retailers, with more than 50% not only noticing increased payment fraud attempts over the last 12 months but also incurring significant costs in dealing with fraudulent transactions. At the same time, half of the retailers found that strong customer authentication checks have lowered their business’ conversion rates.
“It’s common to see shoppers dropping off in frustration when they can’t check out their items easily. However, it’s not a zero-sum game between security and frictionless experiences. It’s possible to offer shoppers both, so long as businesses partner with the right fintech provider that can make smart authentication decisions.” said Gargav.
Download The Adyen Singapore Retail Report 2023 here to learn more about the insights.
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