Queues at cash registers cost Singapore retailers over US$1.6bil a year
By Digital News Asia November 8, 2018
- Fifty-five percent of Singaporean shoppers fall into the ‘spendsetter’ category
- For spendsetters, context and control are critical, shopping with a smartphone is a given
ADYEN, the payments platform, announced that while 53% of Singaporeans love the experience and entertainment value shopping provides, merchants are not meeting the needs of the new generation of shoppers leading to missed expectations and revenue losses of US$1.63 billion (RM6.67 billion).
“Retail has shifted from transactional relationships to experience-driven ones. We’ve found that creating a frictionless and convenient customer journey across offline and online sales channels is key to delighting the Singaporean shopper and ensuring businesses convert shoppers into customers. Consumer preferences also differ when they interact with different retail categories, making tailored and personalised checkouts an important strategy for businesses.
“In Asia-Pacific, we’ve built strong momentum, partnering some of the leading brands in the region like Grab, RedMart, ofo and Cotton On. We look forward to partnering with more innovative businesses to create convenient, contextual and controllable retail experiences for shoppers. This helps to maximise the brand’s revenue and strengthen customer loyalty,” said Warren Hayashi, president, Adyen, Asia-Pacific.
The rise of the Singaporean spendsetter
Singaporean spendsetters, a rising category of shoppers who embrace technology, are setting the trends for how people want to spend and shop. Fifty-five percent of Singaporean shoppers fall into the ‘spendsetter’ category. They are strong users of technology and have the highest demands for digital shopping experiences. This reflects in their payment method preferences.
While cash and credit cards are still the preferred mode of payment for everyday transactions, contactless payments are rising quick in popularity and tied with debit cards as the third choice, making them an essential addition to a retailer’s checkout process.
Spendsetters are also a leading indicator of where broader customer demand in retail is migrating. Encouragingly for brick and mortar retailers, the Singaporean spendsetter still prefers to shop in a physical store. However, a major gripe with the in-store experience is queues.
“In the retail space, 89% of Singaporeans have left a store in the past six months because the queue was too long,” said Warren.
“More alarmingly, 34% did not attempt to purchase the item again while 27% purchased a similar item from a different retailer, resulting in US$1.63 billion in total losses for merchants.”
Primed for experiential retail
The spendsetter’s appetite for digital shopping experiences, coupled with a love for the experience and entertainment value shopping provides (53%), makes Singapore a prime market for new retail experiences.
Singaporean consumers also registered the highest affinity for brands among the APAC markets surveyed (Australia, Hong Kong, and Singapore), with 34% stating that they are willing to pay a premium for a brand experience.
This, along with strong connected device ownership like smartphones, offers an opportunity for retailers to drive new channels of engagement and explore more digital solutions in-stores like augmented reality apps for more information, digital mirrors in dressing rooms and connected store associates.
Codeswitching seamlessly between offline and online
For spendsetters, context and control are critical, and shopping with a smartphone is a given. To encourage brand loyalty and delight spendsetters, synergies and consistency between online and offline sales channels must be in place.
For example, within the fast fashion segment, 31% of consumers say that the ability to purchase their items online and pick them up in store would increase their loyalty to a retailer. In the luxury segment, 33% of Singaporean consumers also say that the ability to have a returned item picked up at home would increase their loyalty to a luxury retailer.
Meeting these preferences - whether it is pay in-store, ship to home or buy online/in-app/over the phone, pick up in-store - can be crucial for local brands looking to win customers.
Singapore’s digitally-empowered spendsetters expect to be able to purchase what they want, when they want, at the time and place of their choosing. Putting unified commerce strategies like the above in place allow retailers to tailor shopping experiences around individual preferences.