Good afternoon. I am delighted to join you at this year's Industry Practitioner Seminar.
The Evolving Retail Landscape
2. Retail is an important industry for our local economy. It contributes almost 1.2% to Singapore's GDP and employs 3.9% of the total workforce in 2018. To ensure that the sector remains vibrant and productive, we rolled out the Retail Industry Transformation Map (ITM) in 2016. We believe transformation and innovation is key for the sector amidst a rapidly-changing external environment.
3. According to the latest figures published by the Department of Statistics, overall retail sales (excluding motor vehicles) declined by one percent year-on-year. This situation is not unique to Singapore. Retail sales in the United States (US), one of the world's largest retail markets, has also registered a month-on-month decline of 0.3% in September. Store closures in the US have outpaced store openings, with over 40 retail bankruptcies recorded just over two and a half years.
4. It is challenging times, but it is not all doom and gloom. The landscape is actually quite uneven, with some stores doing well. As foot traffic in malls and stores continues to decline, retailers need to reinvent the physical store experience and create reasons to draw customers to stores. The physical experience is what will draw customers out of their homes and into stores, rather than them merely making the purchase online. When I went to Japan recently, I visited the Suntory Whiskey House at Grand Front Osaka, a large commercial complex to the north of Osaka Station. It was more than just a whiskey shop.
5. There was a gallery showcasing their 90 years of history, displaying original old bottles that Suntory has sold, including limited edition ones, photographs and advertisements. There was a restaurant with a carefully curated menu, designed to complement the whiskey drinking experience. There was also a furniture shop selling tables, sofas and chairs that have been hand-crafted by artisans, using dismantled wood from whiskey barrels. Basically, it gives you an experience you cannot get by just going online. In Tokyo, I visited MUJI's global flagship store in Ginza. It is the largest MUJI store in the world, with a diner in the basement, a supermarket on the ground floor, and four more storeys of MUJI products. There was even a MUJI hotel, which uses their own products, to appeal to people who like the MUJI brand. The MUJI flagship store provides a new and immersive way of enjoying the lifestyle giant's offerings, as well as to extend its brand influence beyond just their products, to give customers an overall experience of enjoyment.
6. These examples demonstrate how retailers are trying hard to innovate to address changing consumer preferences, by shifting towards experiential retail, where retail, F&B and entertainment are combined to provide customers with fun and unique offerings that lift up the shopping experience.
7. I am heartened to learn that some retailers in Singapore are also taking steps in the same direction. One such example is Mothercare Singapore, which recently revamped its flagship store in Harbourfront to feature stroller test tracks, a baby-wearing zone and baby gear cleaning services. It also launched a nursery advisor programme to help first time parents make better purchase decisions and increase customer loyalty.
8. Even though competition from companies like Amazon, Alibaba and JD.com have disrupted traditional retail boundaries by integrating marketplaces, services, platforms and digital content, such disruptions have also brought about a new wave of opportunities – it offers our retails access to new markets. For example, smaller brands can now market themselves directly to consumers on the internet using platforms such as Shopify and social networks such as Facebook and Instagram without necessarily making big investments in technology. In a way, this has lowered the barrier to entry for entrepreneurs with innovative products to bring to customers, who no longer have to go through a retailer to reach their customers directly.
9. Customers have become more tech-savvy and demanding, and many have taken to shopping online. Many now expect to be able to browse, preview and compare items on their mobile devices on-the-go or in the comfort of their homes. In fact, many online shops have even gone a step further to tap on data analytics to provide personalised recommendations for consumers to make it even more appealing to shop online. Retailers now have to transform in order to seize opportunities in the digital economy.
10. For traditional retailers, many have ventured beyond their traditional brick and mortar model, into the online space. They have moved to an omni-channel retail model, which seeks to provide consumers with an integrated and seamless shopping experience – both online and offline (O2O). By successfully implementing an O2O strategy, you are able to offer customers the best of both worlds. But to do so successfully requires a change in the skill sets of the workforce in such retail companies. Workers in retail companies will need to be able to bridge the online and offline worlds.
Building Online Presence and Improving Retail Sales
11. As SkillsFuture Singapore's (SSG) appointed Continuing Education and Training Centre for training solutions and consultancy in retail, the Singapore Institute of Retail Studies (NYP-SIRS) is constantly analysing global industry trends, and helping local retailers innovate and transform. NYP-SIRS has rolled out various courses to upskill and reskill workers in the sector. For example, three years ago, NYP-SIRS worked with Alibaba's Taobao University to launch e-commerce training programmes. Collectively, SIRS has trained staff from around 600 companies through these programmes. This is a laudable, forward-looking initiative undertaken by SIRS. One company that has benefitted is Home-Fix. Home-Fix is developing a learning platform called Home-Fix XPC for the community of makers, tinkers and inventors who seek a deeper interest to enhance their skill sets. By infusing training with the retail experience, Home-Fix is strengthening its relationship with its customers and building a strong and loyal consumer base. Another example is Montreal (Aldo), where integration of both the web-store and physical stores led to the development of an integrated O2O sales process, thereby allowing for an omni-channel shopping experience.
12. I am pleased to announce today that NYP-SIRS will be embarking on another strategic collaboration, this time with the Singapore Media Academy (SMA). In line with the recommendations outlined within the Retail ITM, NYP-SIRS and SMA will be launching a Professional Conversion Programme (PCP), focusing on New Media Professionals. This is the first of a series of upcoming programmes under NYP-SIRS' new Retail Digitainment initiative. Digitainment, a mashup of digital and entertainment, refers to content by live streamers that entertain and interact with their followers even as they sell products. We are starting to see more live streamers in Singapore as well as in overseas markets like China. They offer a new avenue for commerce, relying on the unique connection between the live streamers and their followers to sell products. Through NYP-SIRS' Retail Digitainment initiative, we hope to be able to support retailers to upskill their existing staff and build a talent pool to have the first-mover advantage amidst this global wave and to be able to meet consumer's appetite for good content.
13. The new PCP aims to enable mid-career Professionals, Managers, Executives and Technicians (PMETs) to reskill and equip themselves with the relevant e-commerce and content management skills to be able to take on emerging roles in the industry. Under this programme, participants will learn how to enhance their company's online presence through different marketing strategies and content development. Participants will also learn how to use data analytics to evaluate the effects of different live broadcast techniques on their audience, enabling them to react quickly to changing market demands. These are useful skills to pick up in a digital economy, not just for retail, but for other sectors too.
14. The programme will commence later this year and aims to benefit 40 PMETs in its first batch. It is off to a strong start, with 12 retail companies having already indicated their interest to participate. This programme can help boost the talent pipeline for local retailers, and support them in their enterprise transformation journey, and hopefully, generate new business ideas and innovative concepts.
Conclusion
15. Let me conclude by thanking NYP-SIRS and SMA for taking the first step towards supporting our local retailers in their transformation efforts. I look forward to more such initiatives. This is not the only thing we are doing to help our retailers – one way we are doing this, is a major project to rejuvenate Orchard Road. We hope to create new and interesting experiences for visitors and hopefully, bring about a boost for retailers. I hope that with this, and our efforts to increase tourism spending in Singapore, it will help to boost our retail industry, and create more demand for retailers. At the same time, I urge all retailers to also embark on transformation and skills upgrading efforts, as the two need to go hand in hand. Through all these, I think we will have a more vibrant retail industry that can then compete with online retailers. With that, I would also like to thank NYP-SIRS and SSG for organising this year's seminar. I wish all of you a fruitful discussion today.
Thank you.