Back in 2019, a survey found that 49% of Singaporeans considered shopping a hobby. Five years down the line, many can still attest to the joy of shopping – online or at a mall. It goes without saying that retail is a key pillar of the Singapore economy, accounting for over 22,000 establishments today. The majority of these retailers are SMEs, and for them, AI is transforming the shopping experience and becoming a key driver of online growth and profitability.
In Singapore, 80% of e-commerce organisations are already using AI, with 42% having fully implemented it and 38% experimenting.
As we approach the upcoming Lunar New Year holiday, marked by the extensive festive shopping in Singapore, delivering fast, easy, and personalised digital experiences is more important than ever.
Harnessing the power of AI will turn this vision into reality. To do this, SME retailers need to focus on leveraging their proprietary data safely and securely.
How does predictive and generative AI can drive costs down and loyalty up?
During festive seasons like the Lunar New Year, keeping products on shelves is a persistent challenge.
According to Salesforce research, 52% of leaders globally want better visibility into their inventory, and AI-powered retail execution solutions can help.
With predictive AI for inventory management using historical data, market trends and store locations, SME retailers can better understand demand, optimise inventory levels and prepare for more sales.
The incorporation of automation and seamless experiences benefits SME retailers that are already strapped for time and resources, while contributing to overall customer satisfaction. By analysing consumer behaviour, product performance, and sales patterns to understand what attracts consumers, AI is also helping retailers design displays and in-store promotion materials using that data.
All this saves merchandising, marketing and design teams valuable time spent on researching and creating rough layouts, instead allowing them to focus on more strategic and creative decision-making.
Mobile phones are the new remote control
An insight from last year’s holiday season is that the mobile phone is fast becoming the remote control for shopping, instantly connecting consumers to brands as they navigate across online and offline channels.
A record-breaking 79% of global e-commerce traffic during Black Friday and Cyber Monday was on mobile phones, up from 76% in 2022. Globally, social traffic on mobile was a critical acquisition channel – representing 10% of all referrals to retailer websites.
Looking into the new year, understanding this trend becomes crucial for effectively engaging with consumers on their mobile phones.
Marketers are also continuing to embrace alternative communication channels to engage on-the-go consumers. The volume of messages sent via push notifications, SMS, and streaming services (OTT) is increasing much quicker with a notable 37% growth globally during this Black Friday and Cyber Monday, compared to the more modest growth of traditional email at9%.
Furthermore,cross-functional commerce touchpoints — known collectively as “embedded commerce” — are proliferating. Customer service channels are emerging as particularly significant in embedded commerce strategies. 29% of commerce professionals globally report that customer service drives substantial incremental revenue.
Personalised, seamless experiences drive shoppers to the buy button
In addition to expanding how and where they shop, customers are changing how they pay. No payment method exemplifies these changing behaviours more than digital wallets — a broad category that includes Apple Pay, Google Pay, among others.
According to Salesforce’s recent State of Ecommerce report, 64% of global organisations now accept Apple Pay — up from 54% in 2022. In Singapore, 65% of organisations transact on Apple Pay, meaning accessibility and connectivity will continue to be at the core of digital wallet innovation. SME retailers need to take note of exactly how their customers are choosing to pay.
When it comes to checking out, amid inflationary pressure and shrinking budgets alternative payment methods have proven to break down friction. With generative and predictive AI, retailers can take a data-driven approach to personalise every moment in the customer journey.
Through personalisation, brands now have the power to turn every shopping interaction into a meaningful and rewarding experience, whether that is through recommending the perfect gift for a friend or finding the best deal for a new gadget. Such shopping experiences are key to customer engagement, retention, and loyalty in today’s retail landscape.
According to Salesforce’s Connected Shoppers report, 1 in 6 shoppers globally have already used generative AI for purchase inspiration. This is having a significant positive impact in helping connect consumers to the products they love.
The need for trust to unlock AI’s potential
It’s important that AI-powered productivity and profit do not come at the expense of consumer trust. Customers are concerned about the societal impact of AI, fearing the introduction of biases and unintended consequences. 89% of SMEs in Singapore are concerned about regulatory developments surrounding AI, with some respondents highlighting risks about sensitive data disclosures and intellectual property rights.
To combat this skepticism and build trust, retailers can emphasise transparency in communicating how AI is used, making it clear that employees — not technology — are in the driver’s seat.
Upskilling becomes a vital component as well, to ensure that teams know how to safely use trusted data sources and keep first-party data secure.
Whether the goal for retail SMEs is achieving top-line growth or bottom-line efficiency, the primary focus should be on enhancing the customer experience – and AI can help.
More than ever before, you cannot spell retail without AI. Across marketing, merchandising and customer service it will continue to drive profitability, productivity and customer loyalty, changing retail and commerce forever. As SMEs navigate the challenges and opportunities of the Lunar New Year holiday, trusted use of AI can contribute to a positive and valuable customer experience.