Digital is key for SMBs to thrive this holiday season: study

Three in five consumers in Singapore plan to do most of their shopping online.

Local small and medium business (SMBs) face having to go digital else miss out from the money rush of Singaporean's holiday shopping plans, a study by card and payments giant Visa stated.

Nearly four in five (78%) consumers in Singapore are still expected to be shopping for the holidays despite the pandemic, according to the 2020 Visa Back to Business Study, Holiday Edition. Of the respondents, almost three in five (57%) indicated that they plan to do half or most of their shopping online, whilst less than one in three (30%) plan to shop both in person and online.

Only 13% of consumers plan to shop exclusively in person.

Overall, more than half (56%) plan to shop at local retailers, small and medium-sized businesses (SMBs) in Singapore, making it imperative for local retailers to go digital in order to benefit from the holiday shopping season.

However, although more than two in three SMBs in Singapore (68%) say that the year-end holiday season is a major sales opportunity for their business, nearly a third (31%) say their business is not prepared to take on the holiday season sales influx.

With the global pandemic accelerating the shift towards e-commerce and digital-first experiences, SMBs in the city-state need to keep pace with changing preferences and demands to maximise sales, as well as to ensure secure and frictionless holiday shopping experiences for consumers.

“Beyond going digital and having an online presence, local SMBs should also look at establishing an omnichannel approach, whilst ensuring their payments infrastructure is robust and secure,” said Kunal Chatterjee, Visa Country for Singapore and Brunei.

Beyond changing the way they shop, consumers are also changing what they shop for. Nearly half (49%) are planning to buy digital gifts for the year-end holidays, as it remains uncertain how the COVID-19 pandemic will continue to change. Singaporeans expect to give more digital gift cards (23%) compared to last year, followed by digital entertainment (22%), and experiences such as tickets, activities, and trips (21%).

To prepare for the influx of holiday season sales, more than a third of SMBs in Singapore (36%) are expected to digitalise parts of their business operations. SMBs in Singapore are also expected to extend their business hours (28%), hire more operational staff (18%), and outsource some business operations to vendors (17%).