The Future of Holiday Retail is Blended Experiences

From Sasa to once-popular departmental stores such as Metro and Isetan, a number of retailers have left Singapore shores or announced plans to do so over the last decade. However, while it is true that there have been some troubling signs such as store closings and an increase in the number of retailers filing for bankruptcy, they don’t quite tell the whole story. Here in Singapore, over 90% of retail sales are still spent at a physical location, with e-commerce making up only 5.6% of all shopping. Physical retail is far from dead. However, staid retail experiences that are boring, unimaginative and disengaging is making its way out.

In the brave new world of retail, customer experience is key. It is no longer an either/or proposition, and leading retailers are swiftly evolving to digitise the entire customer experience through an omni-channel approach. To compete, retailers will need to provide a seamless, personalised and convenient online and in-store experience for shoppers, driven by insight.

As data is captured, it needs to be analysed and exchanged between different systems and partners to be useful. This is driving demand for interconnection, which is the direct and private exchange of traffic between key business partners. The private interconnection bandwidth in the retail sector is projected to grow by 63% annually in Asia-Pacific between 2018 and 2022.

Digital payments fuelling growth in holiday sales
With the recent Singles’ Day sales hitting new highs, Singaporean e-commerce sites are gearing up to capture a share in the growing e-commerce sector. Driven by rising smartphone penetration rates and Internet access, tech-savvy consumers are demanding for convenient, personalised experience that is shifting the entire shopping and payment process to one of open collaboration across a digital ecosystem of partners behind the scenes, driving further demand for interconnection. This is further supported by the GXI Vol. 3, which forecasts that Financial Services & Payment Providers account for 10% of all interconnection bandwidth in Asia-Pacific by 2022.

The future of retail
The winners of this festive season will be the retailers who can harness data insights to deliver better virtual and in-store shopping experiences, improve operational efficiencies and create new sources of loyalty and revenue. Some examples of what this may look like include:

1. Personalised: By aggregating data from multiple sources and applying advanced analytics and machine learning, retailers will be able to provide hyper-personalised offers to consumers the minute they walk into a store or begin browsing the web. A customer with school age children might receive an email discount offer on toys for Christmas. A teenager might receive a pop-up alert on their mobile phone to go check out the new “insta-grammable” opportunity near their physical location (where the retailer has a holiday display of merchandise targeting the Instagram crowd). 
2. Convenient: Mobile apps enable local retailers to provide convenient services like in-store pickup or returns of online orders, and cashier-free checkout, while deepening insights about and engagement with customers. Partnerships with other brands and services can expand the opportunities – for example, offering Amazon Counter or in-store health and wellness services.
3. Exclusive: New reward and loyalty programs can be created based on deeper insights about what customers value. One customer may value a reward programme for sustainable product purchases, while another one would be more engaged by opportunities to unlock in-store and digital experiences.
4. Timely: Sensors and radio frequency identification (RFID) tags on items can help retailers track in-store consumer shopping behaviour for better inventory management. Using automation and machine learning, retailers can pair these insights with online browsing and purchasing patterns to ensure that stores have just what consumers want when they want it.

All of these trends underscore the reality that “in-store” and “online” are now intertwined. Consumers expect a seamless, convenient experience tailored to their values and preferences regardless of how or where they shop. While many retailers have built a strong foundation in omnichannel to address these trends, staying in the game will require broader capabilities.

Providing that kind of experience depends on having 360-degree insights that can only come from harnessing multiple data sources, partnerships, ecosystems and digital technologies. Better customer insights can also unlock data monetisation opportunities for retailers, a market that’s expected to nearly quadruple between 2018 and 2026, reaching US$13.3b by 2026. By deploying direct, private connections at the digital edge, retailers will be able to integrate and exchange data with partners, providers and their own systems to automate and scale insights for new value creation.