Every June sees Singapore undergo a momentary transformation (maybe this is an exaggeration to call it that) as retailers dress up for the annual Great Singapore Sale (GSS) rebranded in 2019 as GSS: Experience Singapore.
Outside of the glitz and glamour that come with the transformation, however, is another form of metamorphosis behind the scenes. One of the biggest changes to retailing in the past couple of decades has been the emphasis on volume and the lost of the engagement that was part of the neighbourhood store.
Hopes are that this lost art of engagement can be rekindled through technology. And retailers are right to be hopeful.
FutureIoT spoke to Professor Reetika Gupta, Associate Professor, Marketing Department, Global BBA Associate Academic Director, ESSEC Business School Asia Pacific, to talk among other things how technologies like Internet of Things (IoT) is making it possible to rekindle the neighbour shopping experience.
What key trends are impacting the adoption of IoT in the Retail industry in Singapore?
Reetika Gupta: The first would be the significant manpower crunch. Singapore, in particular, is emphasising productivity gains and is looking to reduce the flow of lower-skilled, foreign workers. Because of this, we anticipate that automation in retailing will continue to be a key trend, for example, automated checkout counters.
Another key trend is the rate at which online retail is being adopted. The e-commerce market in Singapore has been expanding at a compound annual growth rate (CAGR) of 7%, according to WorldPay’s 2018 Global Payments Report, and big operators such as Lazada/Redmart and Qoo10 are gaining traction. For success, IoT has to provide visitors to physical stores with greater personalized shopping experiences, similar to what online retailers are achieving.
How will regulation (or lack of it) drive adoption of IoT?
Reetika Gupta: Data protection and privacy, including the Personal Data Protection Act (PDPA) regulation, will influence IoT practices. PDPA in Singapore requires organizations collecting personal data (such as biometrics or fingerprint scanning, or facial profiles collected by cameras) to first gain explicit consent from consumers.
Accordingly, adoption of technology must be accompanied with relevant business processes to ensure that such consent is collected. Moreover, PDPA requires organizations to ensure appropriate protection and care for such data – through the use of appropriate security technologies (such as access control and encryption).
As IoT becomes deeply embedded in retail stores, store operators will thus also have to implement technologies and best-practices to protect the data, such as having the additional infrastructure to anonymize it, establish policies to regularly delete data, and enabling options to opt-out.
Cite any common misconception of the IoT as it relates to the retail industry?
Reetika Gupta: There is the misconception that ‘mobile marketing’ solely implies the use of mobile applications, such as via social media, to deliver ads and promotions to consumers. However, there is so much more that one can do with mobile devices.
We have early examples such as location-aware alerts within stores and customizing the content of public digital displays based on proximity sensing of mobile devices as seen at Changi Airport. IoT will be the key to deeper personalisation, one example being delivering promotions based on real-time user behaviour in stores. Without such personalization, it will be difficult for physical retail to survive.
Cite one best practice around the use or deployment of the IoT in the retail industry?
Reetika Gupta: A great example of IoT in practice, is Changi Airport’s use of beacon technology. The key idea behind this is how beacons are deployed not just in retail, but also at check-in counters and other places around the airport. They give proximity-based notifications of things such as products (in stores), food offerings (in food courts) and alerts (based on plane schedules).
We’re also seeing growing attention around the use of video analytics and AI in stores, or automated item recognition and no checkout-required shopping. This has gained a lot of attention in the United States with the launch of Amazon Go’s cashierless convenience stores in Seattle, Chicago, San Francisco, and most recently in New York City.
In 2019, how do you see this IoT being used in the retail industry?
In 2019, proximity-based in-store advertising/notifications will be a big global trend. The use of push notifications to alert consumers about relevant nearby products will gain traction as retailers have developed more sophisticated backend Customer Relationship Management (CRM) systems, and so are better able to track and build profiles of consumers based on their past online/offline purchases. Retailers are also now rapidly building mobile-first apps to engage directly with their customers. In addition, the “beacon market” in APAC is also taking off and is expected to grow rapidly.
Another use of IoT will be in creating greater ‘experiential stores’, where stores are not just about shopping, but about delivering experiences using Augmented Reality (AR) and Virtual Reality (VR). For example, Sephora’s connected store concept uses iPads or connected mirrors to visually project the items’ looks onto customers’ own faces. This is a great way to enrich the in-store customer experience enabling the customer to have more fulfilling store visits where they can make more informed and immediate purchases.
IoT has been around since the term was coined by Kevin Ashton in 1999, said to be following his “witnessing of the challenges of inventory, logistics and supply chain management challenges in retail.”
Will IoT change the game for retailers at the GSS: Experience Singapore event? Only time will tell.