The pandemic certainly brought forth the need for therapy in our lives, but the mental health kind. Retail therapy, however, took a backseat and suffered a hit akin to many other industries and sectors. Within Singapore itself, the retail market shrank by 6.7 billion (from SGD 44.9 billion in 2019 to SGD 38.2 billion in 2020).
People love their shopping though, and it was only a matter of time before the industry bounced back. In 2021, a significant recovery occurred with sales figures (value of retail sales) at SGD 42.5 billion, nearly reverting to pre-pandemic levels.
With the numbers painting a picture of optimism, what are the current trends in the retail industry that will define it in the days to come?
People may be stepping out, but e-commerce isn’t going anywhere
Singapore’s e-commerce market is expected to cross SGD 14.2 billion in 2025. Globally, it is predicted that 22% of all retail sales in the world will be through e-commerce and overall the industry, as per estimates, may hit USD 6.5 trillion dollars. It is clear then that this is not just a trend but a massive business opportunity, and increasingly, many traditional brick-and-mortar stores are going the e-commerce way owing to the wider reach it provides.
Consumers are accepting of this new trend as well. In a recent survey by Blackbox Research, 62% of Singaporeans felt that shopping online is a good change to have emerged from the COVID-19 pandemic. Going forward, omnichannel marketing (multiple ways to promote your products from websites to email marketing to print and digital ads) will be adopted by more brands in a bid to reach out to customers at multiple touchpoints in their buying journey.
Integrated and immersive experiences for the ultimate retail fix
Technology has its fair share of supporters and naysayers, but the truth remains that it makes life more convenient, and in the case of the retail industry—particularly of the fashion kind—it can aid decision-making for consumers as well. For example, when shopping online, there are now virtual dressing rooms using Augmented Reality (AR) that help one figure out the size and cut of clothes. This trend heightened post the pandemic, with players like Revery coming into the limelight and the use-case scenario extends beyond fashion to furniture and other products too.
Even offline stores have incorporated AR technologies—Sephora, Target, and Ikea to name a few. AR and Artificial Intelligence (AI) not only benefit consumers but also play a part in business revenue. For instance, through AI, consumer spending habits and patterns can be analysed to help predict behaviour and forecast sales for certain products while tweaking marketing strategies to better attract the intended audience. Additionally, robotic inventory management and customer service robotics are becoming commonplace. Incorporating smart technologies is critical for businesses to remain relevant in an increasingly tech-driven world.
The influencer’s influence: Fad or lasting trend?
Livestream Shopping is another example using technology to create a unique experience for people. It essentially refers to the promotion of a product by an influencer or celebrity though a live video (streaming) on social media platforms. Promotions and giveaways are usually part of the package, and this created sense of ‘urgency’ and ‘exclusivity’ helps push sales.
For anyone who thinks this may be a fad or passing trend, the numbers seem to paint a different picture with the livestream shopping market expected to hit USD 500 billion this year (2022) itself. Amazon, Google, TikTok, and Facebook are already players in this space, so clearly it seems to be something that might stand the test of time as influencer culture, like it or not, continues to grow. But in a world of ever-evolving consumer preferences, nothing can be predicted with certainty.
Seeing the sense in sustainability
Climate change is a reality, and the truth is that retailers have not done enough to play their role in combating this problem. In fact, they are active contributors to it, with 40% of global plastic usage being attributed to plastic packaging by retailers.
Consumers are in agreement about this crisis. When asked in a recent poll about the biggest threats globally, climate change was ranked among the top two.
The link between plastic and climate change is evident. Moreover, despite talk on green supply chains, data suggests that 25% of global emissions are due to retail supply chains. As consumers increasingly make sustainable choices, from their food to travel, there will be pressure on retailers to make their offerings as environmentally friendly as possible, with actual data to back up the claims. Within the fashion industry itself, trends of ‘boycotting fast fashion’ are becoming commonplace.
The industry seems to recognise the importance of accountability. In an interview to CNBC, the CEO of Zalora Group, Gunjan Soni, said, “We decided that the best way to do it is to make commitments public because that creates a degree of accountability that you can’t shy away from. We’ve now made sure that all of our packaging is at least 80% recycled.”
For Singapore, its commitment to sustainability is outlined in its Green Plan 2030. With ambitious targets that include sustainability measures in a host of areas, the time to put all the plans in action would be anytime now. Other Singapore Government initiatives include Zero Waste Masterplan and the Enterprise Sustainability Programme.
As for consumers, they are in favour of eco-consumerism and sustainable shopping, with even greater support among the younger generation. 1 in 2 Singaporeans polled in our recent survey, ‘Emerging From The Pandemic: The New Mood In Singapore’ mentioned that they are enthusiastic about this trend, and this number swells to 68% among those in the 20-34 age group, which is the segment targeted most by brands.
Whether it is the latest trends in retail or the kind of insights that are relevant for your specific industry, Blackbox Research helps you make the right decisions that are best for business. Interested? Reach out to us at connect@blackbox.com.sg
Author: Blackbox Research Team
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