retail challenges in the digital economy (off line to on line in singapore)

Confidential

Retail Challenges in the

Digital Economy

Off Line

to

On Line

O2O

22th July 2015Dr Tan Guan Hong

ConfidentialUpdated: 28/01/2017Pg 2

Mega Trends of On-Line and Off-Line Retail

Year on Year % growth

Global Trends


APAC forecasted to lead in global

tourism for next couple of decades.

Source: Singapore Tourism Board

10 M visitors

growth / year

Global Trends


Source: Singstat

JAN-DEC 2014: -3% VS JAN-DEC 2013

Relatively Flat growth in 2014 ~ 2015 !

Singapore Trends

Confidential

Why is A*STAR Focusing on Retail?

Updated: 28/01/2017Pg 5

• Wholesale & Retail Trade is the most significant portion of GDP

From : Singapore in brief 2015, MTI

Singapore

http://www.singstat.gov.sg/docs/default-source/default-document-library/publications/publications_and_papers/reference/sib2015.pdf

http://www.singstat.gov.sg/docs/default-source/default-document-library/publications/publications_and_papers/reference/sib2015.pdf

Confidential

Mega Travel Trends in Asia-Pacific

• More Personalisation - ‘Me, Me, i Effect’

– More niches, smaller groups and individualistic

unique experienced travellers

– Lesser large, organised travel “we” groups

– Willingness to self-manage/book travel via the web

• Mobile Convenience

– Business travellers and leisure travellers now

routinely use these devices for travel & travel-

related arrangements and bookings

– Use social networking sites during travel

Updated: 28/01/2017Pg 6


Structured Tourist

Group with

planned activities

Unstructured Tourist

with Individual self plan

activities


The population grew up from the computer generation

using eyes and fingers to interact

This is the “i” Generation of iWatch, iPhone and iPad

The self centric world of “i” or me, me, me …

Everything revolves round “i”Knowing this, how do we grow business in future ?

Gen Y & iGeneration

i ii

Confidential and Copyright9

The total fertility rate was 1.19 in 2014,

compared to 1.29 in 2013, the Dragon Year. This

is below the replacement rate of 2.1 per cent.

Manpower Shortage

Confidential and Copyright10

Rental is

going to

keep

increasing ?

Rising Rentals

Confidential

Singapore’s Challenges

• Increasing costs

– Manpower

– Land

• How to increase outreach to

tourist

– First time

– Repeated

– Younger Tourist

– Individualistic iTourist

• Tourist interests

– Who: Interests, Demographics

– Pre-arrival data for Targeted pre-

arrival Marketing

– Traveling patterns (elsewhere

and in SG)

Updated: 28/01/2017Pg 11

• Insights to Develop New SG

Attractions

– Who to target

– Next generation tourists

• Budget airlines

• SG- Malaysia high speed

rail

– Relevant latest events &

promotions

– What different ways to entice

spending

Confidential

Trends in Retail

• Productivity – Max. Sales with Min. Cost

• Challenge of Rising Costs

• Looking for Incremental Sales

– Threats/Opportunities of On-Line eCommerce

• Emergence of Multi-Channel Shoppers

• Opens up $21.8B market at our door-step

– Social Trends – Emerging Market

Updated: 28/01/2017Pg 12

Confidential

Cost of Retail Business

Updated: 28/01/2017Pg 13

Confidential

Singapore Biz Cost Structure

Updated: 28/01/2017Pg 14

• Retail Costs in Labour is 35% & Rental 28% of Total Cost

Confidential

Opportunity

• High cost to consumer vs. total manufacturing cost

Reducing overhead costs is a

Win-Win-Win for consumers,

manufacturers and our spin-off !

High Cost to

Consumer v.s.

Total

Manufacturing

Cost


• Only High Margin business can afford to maintain urban footprints

• Virtual Store & Online Catalog reduce Retail Space/Inventory• http://sbr.com.sg/retail/exclusive/singapore-retailers-turn-technology-boost-productivity

High $ item

Low $ item

http://sbr.com.sg/retail/exclusive/singapore-retailers-turn-technology-boost-productivity

Confidential

Emerging Trends in Retail

1. eCommerce is growing very fast

2. Smartphones are forcing retailers to come up with new biz models

3. In-person shopping is being transformed by technology too

Updated: 28/01/2017Pg 17

Confidential

Mega Trends Focus for 2015

Updated: 28/01/2017Pg 18

i and

Confidential

Social Media provides “She” Insights

Updated: 28/01/2017Pg 19

From : Financesonline.com

Digital “She” Shopper


• Increased tourist spending (economic impact)

• Discovery tourism for connected generation

• Accurate regulatory statistics

• Pro-active brand monitoring

Inbound

Tourist

Big Data Analytics

• Places of tourists' interest

• Authentic experience & event

• Relevant & emotive recommendation

• Effective (data-driven & ROI-based) marketing

• Increased sales

• Future Investments for attractions upgrading

Other social profile

& behaviour

+

• STB Overseas offices (Pre-arrival)

– Insights

– Targeting marketing, promotions, etc.

One App

when in SG

…

• Demographics

• Travel patterns,

• Places of interests, events, promotions

Tourism Example

Higher

resolution

of tourist

pattern in

SG


Traditional Handicrafts

•Videos:

•Images:

•DIY courses:

Chinese Calligraphy

•Basic introductory course:

•Videos:

•Images:

1950s shop house

•Architecture:

•Layout:

•Significance:

•Videos:

•Trades:

Trishaw rental tour

•Special offer:

•Book in advance:

•Language specific Guides

Kong Chow Cultural

Centre

•History:

•Famous people:

•Videos:

•Images:

Creating an authentic & cultural experience… In Singapore

In SG Tourism Example

www.i2r.a-star.edu.sgwww.facebook.com/i2r.research

Online:

Thank You

Updated: 28/01/2017Pg 22

http://www.i2r.a-star.edu.sg/

http://www.i2r.a-star.edu.sg/

http://www.facebook.com/i2r.research