Why it's high time for Singapore retailers to shape their own future

There are two ways to predict the future: the first one is to turn to the experts and trust their wisdom; the second is to look at the gap between what people expect and what they’re able to do, and see in it the shape of things to come.

After 20 years of research with 284 experts producing 28,000 predictions, Philip Tetlock concluded that “the average expert was found to be only slightly more accurate than a dart-throwing chimpanzee”.

While the object of his study was Political Science, it could as well have been retail marketing: ever since the time of dial-up modems, analysts have been anticipating the day when brick-and-mortar shops would be made obsolete by a new generation of shoppers that would buy everything, from avocados to Z4s, from their computer/smartphone/Facebook page/twitter feed.

Of course that day hasn’t come yet, and chances are it never will, so when we decided to investigate the face and fate of retail in the digital age for Havas' latest Prosumer Report, we focused on real habits and expectations.

The state of commerce in the digital age
Surveying over 10,000 people across 31 countries, “Digital and the new consumer” discloses what we’re getting right and wrong about digital commerce and what the challenges are for online and offline retailers. (Spoiler: this is an example of what we’re getting wrong…)

Bill Gates once said that “we always overestimate the change that will occur in the next two years”, and this seems to be the case with mobile commerce: despite all the talk of it, only 22% of mainstream respondents have used a smartphone to shop online.

Things are about to change, though, as that figure climbs up to 38% among Prosumers, a relatively small cohort of influencers who have been proven to give a good indication of what the majority will soon think and do.

Moreover, if we take geography into account, mobile is confirmed as the new frontier: in Singapore, where shopping is almost a competitive sport, 48% of people have made purchases from their smartphone and 26% from their tablets, a figure that, given the category penetration, shows that virtually every tablet user is a tablet shopper.

Having said that, before we rush to stick miniaturized versions of our stores into an app, we should be aware that we are not just talking about another screen. It’s the shopper that is mobile, and that is fragmenting the purchase process across multiple real and virtual steps: the smartphone is only the glue that keeps it all together.

A transition towards a new form of shopping
51% of Singaporeans say that for major purchase decisions their first stop is usually the internet; that’s far from being their last, though, with 66% “showrooming” (i.e. visiting stores to see/try-out a product before buying it online) and 58% checking for price and customer reviews online while in a shop.

This blend of on- and off-line has unlocked the e-commerce potential of non-commoditized goods, such as clothing, shoes and accessories, which is now the most popular category of online shopping in Singapore (65%), well ahead of books (37%).

The most important insight offered by the Prosumer Report is that we’re not in a transition from an age of brick-and-mortar to one of bits-and-bytes, but rather from one of confrontation between the two models to one where retailers can create a hybrid model to respond to what is already a fluid experience in the minds and habits of shoppers.

Singaporean retailers have been waiting for too long
Unfortunately, the local industry seems to be lagging behind: some retailers are still very hesitant to create an online presence, leading to nearly half of all Singaporeans feeling frustrated; at the same time, e-stores have problems of their own, with 70% of online shoppers feeling overwhelmed by the amount of choice and information, and 64% still preferring to buy certain products in person for the tangible benefits of touching them and trying them on.

Real innovation seems to be coming from local start-ups, who understand that the best use of new technologies is not to support old business models, but rather to invent new ones: companies such as Swiff, MOGi or ERN are determined to unleash the full potential of mobile commerce, while Tate & Tonic is suggesting that we could rid of shops altogether, replacing them with a monthly subscription to a curated, personalized fashion collection delivered to your door.

While this is certainly good news for entrepreneurs and venture capitalists, established retailers should start worrying, as they cannot expect to leave radical innovation to smaller competitors and still stand to benefit from it.
Whatever commerce will look like ten years from now, it will reflect the objectives and needs of those talented and ambitious enough to shape it, and it will surely be more disruptive than just more windows on more screens.

After saying that “we always overestimate change that will occur in the next two years”, Bill Gates went on to add that “we underestimate change that will occur in the next ten.”

It’s time for retailers to stretch their imaginations and start shaping the retail industry of 2023, to ensure that they will play a part in it.