Physical retail store’s slow death is inevitable as younger and more savvy shoppers buy their shirts, shoes and even jewellery online. Online shopping in Singapore accounted for only 2.1% of retail sales in 2015 but by 2025, it is expected to grow at least 5 times (US$5.4 billion).
However, online shopping isn’t the only reason why brick-and-mortar stores are starting to shut down…
1) Rise of E-Commerce/M-Commerce
Online stores are also open 24/7, so if your customer has a smartphone or laptop, making a purchase wouldn’t be limited to regular retail operating hours. With Facebook ads, retailers can attract someone when the store is closed or during odd hours in any part of the world. Most physical location stores are open between 9am to 9pm,. By being available at all hours, you can attract people who would normally pick up a product in stores, if the store were open.
Mobile-ready websites lead to greater engagement with consumers. Retailers should consider their presence online and on mobile as consumers use these devices to make decisions and assumptions about your brand and store. Retailers can also drive more in-store traffic and revenue by developing new offers exclusive to mobile customers and promoting them through online channels, such as social media. Deloitte reported 85% of consumers who used a mobile native app during a recent shopping trip made a purchase. Retailers can use branded mobile apps to deliver geo-targeted promotional and product offerings to mobile users while in store or when they’re outside of the brick-and-mortar environment.
2) Experiential Shopping [restrict]
Experiential shopping refers to a store in where certain experiences are provided in addition to selling, and shoppers do things besides buying. The idea is that a retailer offers consumers a chance to buy an experience rather than just an object or service.
The old retail model focused mainly on products being sold. This was seen in both in-store and online shopping. However, consumers have been moving away from strictly shopping for products, instead looking for a more engaging experience. The trend has been driven largely by millennials and their preference for experiences over things. The emergence of virtual reality, augmented reality, and improved mobile technology has continued to push retail brands to add layers and new experiences to their traditional retail models.
As a growing number of establishments in Singapore close up shop after falling to the might of e-commerce, analysts are placing their bets that experiential retail is set to give Singaporeans a reason to go beyond their online shopping apps, visit malls again and breathe life into the struggling sector. 53% of shoppers in Singapore admitted their love for shopping. Not only do they love the experience and entertainment value shopping provides, but Adyen also reported that Singaporean consumers are the most willing to pay for a brand experience as compared to other APAC consumers.
3) Shifting Consumer Behaviour/Trends
Technology has made it easy for consumers to see the people, processes, and values that your company represents. Poor customer service or rude employees can, and will, be called out on social media, often immediately. Brands are being held accountable for their practices, and toxic cultures of secrecy are being torn down. There’s a broader cultural movement taking root and now, consumers are shopping with their emotions instead of their wallets.
Ethical shopping is one of the fastest growing sectors in retail today. Indeed, millennials’ changing preferences and attitudes regarding corporate responsibility, social consciousness, and more have already impacted how retail brands present and position themselves. In a retail environment where choice is everywhere and brands are scrambling to lower price points, there is a distinct subsection of shoppers out there actively seeking higher ethical standards. The rise of ethical brands is a clear demonstration of how the compass is moving from guilt to virtue in the retail sector.
More than 88% of consumers check ratings or reviews before making a purchase, online or off. Studies have also found that, after family and friends, online reviews were the second most-trusted source when someone is buying a product or trying a restaurant. Companies will have to consider the image their brand conveys to the world, and work to create cultures that match consumers’ changing values and world view.