Speech by Associate Professor Muhammad Faishal Ibrahim, Parliamentary Secretary, Ministry of Education and Ministry of Social and Family Development at the Singapore Institute of Retail Studies (SIRS) Industry Practitioner Lunch and Seminar 2016

Published Date: 30 November 2016 12:00 AM

News Speeches

Mr Ng Cher Pong, Chief Executive, SkillsFuture Singapore

Professor Cheong Hee Kiat, President, SIM University

Ms Jeanne Liew, Principal & CEO, Nanyang Polytechnic

Mr Eddie Wu Yong Ming, Senior Vice President, Alibaba Group


Distinguished Guests

Ladies and Gentlemen

1. A very good afternoon, I am happy to join you at the Industry Practitioner Lunch and Seminar 2016 organised by the Singapore Institute of Retail Studies, or SIRS in short. This seminar provides an excellent platform for retailers to keep abreast of the latest retail trends and technologies, which will empower them to succeed in the face of digital disruption.

2. Set up as a Continuing Education & Training institute of Nanyang Polytechnic (NYP) by the then Singapore Workforce Development Agency (WDA) in 2006 and now under SkillsFuture Singapore (SSG), SIRS plays an important role in the training and shaping of Singapore’s retail sector. Since its inception, SIRS has trained more than 56,500 individuals through its Retail WSQ programmes and delivered over 115,000 training places. This year, SIRS’ critical role was affirmed through its appointment as the Anchor Provider for the retail industry. As an Anchor Provider, SIRS provides crucial consultancy and training services to help the retail industry grow, adapt and evolve.

3. This year also marks the tenth anniversary of SIRS. I would like to extend my heartiest congratulations to SIRS for serving the retail industry so well, and we hope that you will have even more good years ahead.

Disruptive Technologies in the Retail Sector

4. Singapore is a shopper’s paradise, and our cosmopolitan retail sector is also important to the Singapore's economy. Contributing about $5 billion to Singapore’s GDP in 2013, the retail sector employs more than 125,000 people in over 20,000 establishments.

5. However, the retail industry must evolve to address challenges that it is facing. Manpower shortages and high rentals have contributed to risings costs and shrinking profit margins. On the demand side, consumer behaviour is changing rapidly, largely shaped by the rise of online retailers and disruptive technologies. These disruptive technologies have shaped the industry in two ways: (i) by increasing the proximity between buyers and sellers, and (ii) by accelerating the speed and changing the mode by which consumers access information on what they buy.

6. Let me illustrate these changes. Before there was Taobao, most of us would travel to do our shopping. This could entail physically going to various shops during opening hours, searching for the right item at the right price. The internet eliminates the distance between buyers and sellers by bringing shopping to the consumers. With smartphones becoming almost commonplace, Singaporeans can shop anytime and anywhere, virtually. What this also means is that competition becomes internationalised. Previously, competition was relatively localised within geographical boundaries. With the rise of online retailers, local retailers not only have to compete amongst themselves, but also with overseas retailers who have gained access to Singaporean consumers through the internet.

7. Disruptive innovations have also accelerated the speed and changed the mode by which consumers access information. Previously, the search cost involved in getting the best price for an item was prohibitive. Often, consumers relied on their own community’s word-of-mouth and reputation to determine the places where they can get the best prices. Now, with the click of a few buttons, consumers can compare prices across different websites and read peer-to-peer reviews of a product. The cost involved in such searches has dropped significantly. Technology has also enabled online retailers to replicate some of the shopping experiences that brick-and-mortar businesses traditionally offer. Augmented reality enables online retailers to virtualise the changing room, allowing consumers to try on clothes using their programme and a webcam, virtually. These pose real challenges to the industry as some of the most valued aspects of brick-and-mortar retailers are being eroded by technological change.

Transforming Challenges into Opportunities

8. How then should we respond to such challenges? Perhaps we can draw some inspiration from the stoic philosopher emperor Marcus Aurelius, who wrote this oft-quoted passage while on the battlefront: “Our actions may be impeded… but there can be no impeding our intentions or dispositions. Because we can accommodate and adapt. The mind adapts and converts to its own purposes the obstacle to our acting.” He then concluded with this: “The impediment to action advances action. What stands in the way becomes the way.”

9. While local retailers are facing vast challenges from disruptive technologies, there are also plenty of opportunities within for them to transform and rejuvenate. Local retailers can make “what stands in the way” become “the way” by leveraging the very platforms that are disrupting the industry. With the rise of online retailing, local retailers now have access to a consumer base beyond the shores of Singapore. Likewise, retailers can make use of personalised marketing and data analytics to help them create better shopping experiences for their customers and make more informed business decisions. Technology can also help businesses re-think and re-design employee roles, deploy them more efficiently and train them more effectively.

Innovating and Transforming to Stay Ahead

10. For the retail industry to succeed, the industry must be poised to capitalise on these opportunities. There must be a re-think on how retailers approach their businesses. While investments in software and hardware are necessary conditions for success, they are insufficient; business owners cannot forget the heart-ware of the industry: its people.

11. Developing the right human resource is a fundamental enabler for retailers to ride the digital wave and succeed in a volatile and uncertain future. It is the people who uncover creative solutions to complex problems and offer that human touch that technology cannot replace. For this to happen, businesses must rethink their approach to human resource development. Employers must explore new ways to attract passionate new talent into the sector while continuing to reskill and upskill its existing workers.

Significance of the MOU

12. One way to achieve this is to work with education institutes to help existing workers deepen their skills and widen the scope of their competencies over time. By embracing the idea of lifelong learning, we can ensure that we will be well-equipped to handle any new challenges that may come our way.

13. In this light, I am happy to see SIM University and Nanyang Polytechnic come together to sign a Master Collaboration Agreement, which will give SkillsFuture Earn and Learn Programmes credit recognition for degree programmes offered by SIM University. For example, upon completion of their WSQ Specialist Diploma in Retail Management, graduates of the SIRS programme can sign up for a Bachelor of Science in Marketing degree with SIM University, receiving exemptions of up to 30 credit units, or about 1 semester’s worth of work.

14. I am also pleased to see that SIRS will be inking the Training Cooperation Agreement with the Alibaba Group’s Taobao University to share Alibaba’s best practices with local retailers. Singapore has always placed paramount importance on investing in our people, and I am particularly heartened to have a global frontrunner like the Alibaba Group join forces with us in this respect. Learning from the experiences of the world’s leading online retailer, customised by SIRS for the local context, will galvanise the Singapore retail industry and take us to greater heights.

Conclusion

15. As Anchor Provider for the retail sector and an appointed Lean Enterprise Development Multiplier, SIRS is well-equipped to offer the right mix of training and solutions to help retailers weather the challenges ahead. The two agreements that will be signed today will enable SIRS to further broaden its offerings to help our industry workforce deepen their skills, widen the scope of their competencies and formulate creative solutions to push retail to the next level. I strongly encourage retailers to take advantage of the courses and business solutions offered by SIRS.

16. As we look towards the future, perhaps the only certainty is that the pace of change will continue to quicken. But if we remain nimble and adaptable, I am certain that we can together embrace these challenges and catalyse them into opportunities for business growth and transformation.

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