Retailers urged to go on offensive
A guy shopping online. TODAY file photo
SINGAPORE — Retailers need to stop playing defence and start playing offence if they want to drive growth in an industry increasingly infiltrated by ecommerce players, and they can start by selling beyond the limitations of the physical store front and targeting overseas markets, said Senior Minister of State for Trade and Industry Mr Lee Yi Shyan at the 24th Singapore Retail Industry Conference (SRIC) today (Sept 22).
Speaking at the conference, Mr Lee unveiled a new retail productivity plan, a five-year strategy that aims to increase topline growth by helping retailers sell online and market their products on international platforms. The plan will also continue to help retailers improve operational efficiency.
“On a worldwide basis, e-retail sales reached US$1.3 trillion (S$1.8 trillion) and accounted for an increasing share of total retail sales in 2014. E-retail sales are also expected to grow by 56 per cent over the next three years … I personally believe that it is a matter of time before e-retailing becomes commonplace in Singapore. This is because consumer preferences are changing.
“The choices before our retailers are clear. If we only play defensively, we would see our retail sector growing very slowly, or perhaps not at all. Our strategy therefore cannot be limited to cost-cutting and efficiency improvement. Our strategy has to be offensive, to include selling beyond the limitation of store-fronts and serving markets in the region and beyond,” said Mr Lee.
The first productivity plan, which was launched in 2011, was aimed at helping retailers help improve operational efficiency, including technology adoption, human resource upgrading and customer-centric initiatives.
To date, the first retail productivity plan has provided support to more than 1,900 retail companies that embarked on over 3,600 productivity and service upgrading projects. These projects helped retailers improve operational efficiency and reduced manpower reliance.
Under the second plan, the government aims to go further by providing support and know-how for retailers in e-commerce, branding and concept innovation, in a bid to help them sell online and market their products on international platforms.
SPRING will support brick-and-mortar retailers to capture sales online through collaborations with e-commerce multipliers and providers, through tie-ups with companies such as SingPost, Google, eBay and RedMart, allowing retailers to tap their expertise in digital retail channels.
Shared platforms in logistics and warehousing will also be created, as well as support for retailers’ capability upgrading projects in areas such as inventory management and digital marketing. Support areas for brand building activities will be expanded to include product development for private labels, SPRING said.
The plan will also continue to improve operational efficiency of retailers by building on efforts from the first plan to encourage more retailers to adopt manpower-saving technologies.
“While a good majority of our retailers could improve their productivity by improving operational efficiency, at least in the short term, I believe a vast number of our retailers will have to transform to become e-retailers quickly. The trend of shopping online is unlikely to reverse, and we have to be prepared for this,” Mr Lee said.
