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Mass-personalisation and collaboration leading the way for retailers
LAST December, SK-II's revolutionary smart store concept landed in Singapore as part of the brand's move to create unique and personalised consumer-led experiences for their consumers.
The Future X Smart Store wowed visitors with its immersive and intuitive state-of-the-art technologies which provides them a personalised skin analysis, then displays the recommended SK-II products via the Smart Beauty Bar and teaches them how to attain crystal clear skin.
With the digital economy coming to the forefront, SK-II is one of several retailers which are evolving in the way they market and engage shoppers to accommodate more participation from the ground up.
Shoppers can now be involved in co-creating products, with social media helping to identify shopper expression and amplified product wants that shoppers are keen to associate themselves with.
This has led to the rise of mass personalisation, as retailers realise the importance of tailoring and personalising their products and services to appeal to discerning shoppers.
Co-creation is not an entirely new concept - F&B retailers in Singapore have long introduced the concept to enable customers to create personalised beverages or food items.
Tung Lok's make-your-own-pancake concept restaurant Slappy Cakes has turned the idea of playing with food on its head, giving shoppers free play from the selection of flavours to creating pieces of pancake art with their creative will.
Retailers have creatively refreshed and repackaged the concept of personalisation to provide customers with unique and bespoke products and services.
Through the decades, friendly neighbourhood coffeeshops have been providing their customers with made-to-order kopis, tehs and even Milo beverages. Today, consumers are spoilt for choice, from personalised pizzas, rice bowls and salads to bespoke leather goods by local artisan collective The General Co, to customised monogrammed bags with handpainted initials and designs by international luxury brands such as Louis Vuitton.
Given the more competitive landscape, more retailers are focusing on improving the retail experience of shoppers.
According to Knight Frank's 2019 Retailers Sentiment Survey, an in-depth survey completed by around 40 local and international brands, about 37.8 per cent of retailers indicated that shoppers prefer to create their own customised products, and have a preference for in-store cafes (35.1 per cent) and pop-up or flash events (35.1 per cent).
Shifting trade mixes and the move to cross-collaborations
To draw footfall from the online into the offline, collaborative spaces are making an entrance by pulling together a mix of retailers and employing technology to create an experiential shopping environment.
NomadX, Singapore's first "phygital" (physical and digital) store at Plaza Singapura offers a glimpse of what is to come. There, major retailers, start-ups and online stores offer experiential spot offers for their products through new technologies. NomadX even houses Taobao's first physical outlet in Singapore.
New player, habitat by honestbee blends the best of a supermarket experience with F&B offerings, incorporating technology to present shoppers a unique experience which is seamless and experiential.
In this supermarket-cum-dining concept, one can get in their grocery shopping, selecting from a myriad of quality produce and feasting in one of the dining options at the same time. Leveraging technology, habitat by honestbee offers a multi-sensory experience which aims to help customers save time with features such as cashless auto-checkout and auto-collection systems.
Shifting retail landscape; the appeal of collaborative concepts
Rents in the Singapore retail market have remained largely subdued since 2015, stemming from a confluence of factors that have impacted retailers over time.
First, operating costs remain high. Results from Knight Frank's 2019 Retailers' Sentiment Survey revealed that 89 per cent of retailers interviewed bemoaned high rental expenses and, the hiring and retention of staff as their top concern in running their business.
As a result, retailers are reassessing their business models to overcome manpower and cost issues. We are seeing more collaboration among retailers across various trades, sharing space and common resources, to help lower rental and better circumvent the recent cut in S-pass quotas.
Second, millennials are forming a larger proportion of retail sales in the market. The tech-tuned generation is more open to using e-commerce platforms to make purchases, and rely on social media or web reviews of products and services to determine purchase decisions.
As e-commerce platforms keep shoppers better informed with their plethora of both product and customer knowledge shared, shoppers have grown to place greater importance on searching for value-for-money products, an attribute highlighted by 65 per cent of retailers in the survey.
Other attributes highlighted by retailers include satisfactory customer service (48.6 per cent) and experiential services (32.4 per cent).
Communities and social spaces
Mall landlords are also reshaping traditional bricks-and-mortar businesses to encourage shopper engagement in new ways. As malls continue refining and defining the best mix of tenants by redesigning the overall shopping experience, landlords are looking to create destinations for shoppers of all ages to gather and find community in.
This has led to an added emphasis on place making and curating social destinations for families and friends to hang out at, be it the very young or the young at heart.
The idea of a social destination has been taken a step further with digital, as millennials go onto social media to share their take on impressionable features witnessed, be it through photos, videos, comments or location tags.
ICONSIAM, which opened in Bangkok in 2018, has strived to move in such a direction. The mall built a water dance feature as its highlight attraction and with a span of over 400 metres, is the longest water dance in South-east Asia. On the ground floor, a floating market that has long been an iconic traditional attraction in Thailand can be found offering traditional Thai snacks and handicrafts from the region.
The scale of the mall, numerous social spaces and spots of attractions have resulted in positive posts by the shared online community, with both the mall aesthetics and offerings winning hearts with good reviews on sites such as TripAdvisor.
Back in Singapore, Jewel Changi Airport, which will be opening this year, is looking to attract similar clout from the online community. Boasting the world's tallest indoor waterfall of 40 metres - Rain Vortex, Forest Valley, a huge five-storey garden housing Singapore's largest indoor collections of plants, as well as 14,000 square-metre Canopy Park, Jewel Changi Airport will be an attraction to behold for both locals and tourists alike.
The Transformation of Orchard Road: A new beginning
Moving forward, the need to engage consumers both across all levels of social interaction online and off will be imperative, to shape and drive the retail landscape.
Best exemplified by ongoing plans to enhance the Orchard Road precinct, the newly launched Design Orchard will give brands and products with a Singapore identity a platform to a larger audience and at the same time, widen the diversity of retail options for shoppers.
Additionally, the shopping belt will be spruced up on the ground level with a showcase of vibrant trees and shrubs, as well as dedicated lifestyle experiences in different precincts that all will find appealing.
- Wendy Low is the executive director and head of retail at Knight Frank Singapore. Dr Lee Nai Jia is the senior director and head of research at Knight Frank Singapore.