Innovating businesses in Singapore's services industry

At first glance, Singapore’s consumer culture presents a rosy climate to budding entrepreneurs venturing into the food and beverage (F&B) and retail industry. 6 out of 10 Singaporeans dine out at a daily basis, opening up demand in a cosmopolitan melting pot of local and expatriate flavours.

The generally high disposable income is also a welcome sign for retailers introducing new products to the market. 

A closer look, however, uncovers the real hardship of restaurants and retailers in a highly competitive industry. According to the Accounting and Corporate Regulatory Authority (ACRA), 575 new restaurants were set up while 435 closed down from January to November 2013.

The brutal truth is that only one entrepreneur in four will survive. And those that do are not immune to the other challenges ahead.

Over the last few years, the domestic manpower crunch has become increasingly evident. The Singapore Department of Statistics reports labour productivity in the food services industry at a continuous decline since 2012, coupled with the highest turnover rate across all industries.

Rising costs is another external factor. Landlords and malls can increase rentals by up to 140 percent, given the market conditions in a land-scarce market.

In such a harsh landscape, what are business owners to do? Competition in these sectors are intense and profit margins are wafer thin.

Many hope for instant revenue with a “star product” but in actual fact, businesses need to look at smart long-term decisions. They could continue to focus on keeping their costs lean to survive longer, fine-tuning goods and growing a customer base over time.

For business owners operating multiple outlets (or with ambitions to do so), investments to trim processes and optimise staff allocation are crucial, but as business concepts continue to evolve, these measures are not sustainable.

Businesses and entrepreneurs need to gain a competitive edge to stay ahead and flourish in Singapore’s ever-changing F&B and retail setting.

Redefining Businesses with Technology

While there is no silver bullet, many of the issues can be managed with technology. Business technology today is redefining how we identify growth opportunities, operate our businesses, and manage risk.

By adopting and utilising technology effectively, business owners will be able to capitalise on improving business conditions.

The truth is that consumers are ready and eager for a new customer experience. In a survey we conducted of 100 Singaporeans between the ages of 20 and 30, it was found that 84 percent think retailers should leverage technology to improve customer service. 37 percent have used apps to order at restaurants, while another 47 percent are interested in doing so.

These insights alone should convince owners who might have previously not considered adopting technology into their business models to have a long, hard re-think.

The latest retailing concepts and technologies can boost productivity by alleviating workload, thus helping owners focus on the very thing that consumers want – better customer service. With improved customer service comes a surge of profits but only if businesses pump up productivity of their existing employees and operations as a whole.

F&B business owners can consider more intuitive solutions such as wireless ordering, which reduces human error and customer waiting time, thereby increasing customer satisfaction and return business. The concept of devices sharing data with each other, or “The Internet of Things” offers vast potential to reinvent business operations, but it is still untapped on a larger scale.

Imagine your favourite restaurant’s app on your smartphone to make reservations and order meals in advance with your personal device from anywhere. Once arriving at the restaurant, the kitchen has already processed your order, allowing waiters to focus on customer service and greet you with a smile.

Now imagine all retailers with the same technology, and how that greatly changes the way we make purchasing decisions as consumers. This is a game-changer.

Businesses are now beginning to recognise the value of using data and analytics to improve decision making related to consumer insight, brand and product management, and pricing.

Smarter businesses can transform Big Data to “smaller data” for quicker planning, especially with fast-moving consumer goods such as fashion, electronic products, and seasonal menus.

Logging-in to web-based dashboards housed on secure platforms allows owners to monitor and analyse real-time activity in multiple stores at a glance. If sales is more brisk in one outlet at a certain hour, owners can reallocate staff to accommodate different manpower needs and achieve greater efficiency in processes.

Instead of reprinting menus, price tags, and retraining staff on seasonal promotions, it will be quicker and more cost-effective to update on a centralised system that will then send the information through to wireless cashiers, receipt printers, and electronic menus on tablet peripherals for staff to know the latest prices and items in stock.

A Collaborative Effort from All Ends

Raising productivity to improve customer service and business performance requires efforts on all fronts. Owners cannot afford to neglect any process of their business, and a good technology infrastructure can improve each part of the chain from back-end operations to front-end point of sales.

When decisions can be rolled out immediately, retailers are in a better position to customise strategies and also react to competitors in a highly competitive environment.

In the current landscape where an average of 50 retail outlets are launched each month, productivity improvement means a fundamental shift from the current way of doing things.

Planning the next move at the balance books is too late, and looking to a collaborative alignment of interests between staff and business owners is perhaps the most effective place to start in motivating employees to excel.

Through tech-enabled solutions, businesses can look to reap cost savings, reduce overheads, and focus on delivering quality goods and exceptional services.

Ultimately, it’s all about how we as businesses provide our customers a seamless experience that will leave them coming back for more.