SPEECH BY MR TEO SER LUCK, MINISTER OF STATE, MINISTRY OF TRADE AND INDUSTRY, AT THE SINGAPORE RETAIL INDUSTRY CONFERENCE 2013 ON 11 SEPTEMBER 2013, 9.05AM, AT SUNTEC CITY CONVENTION CENTRE
Dato Dr Jannie Chan, President, Singapore Retailers Association
Distinguished Guests,
Ladies and Gentlemen,
INTRODUCTION
Good morning. I am delighted to be here with you today at the opening ceremony of the 22nd Singapore Retail Industry Conference (SRIC). Over the past year, the Singapore Retailers Association (SRA) has been instrumental in promoting industry upgrading efforts as well as initiatives to uplift the capability of the retail sector workforce. I would like to take this opportunity to commend SRA and its members for their contributions in shaping the Singapore retail landscape to what it is today.
The retail industry continues to be an important economic pillar in Singapore, generating over $32 billion in operating receipts1 in 2012. The sector contributes to the vibrancy of the city, the quality of living for Singaporeans, and is a key draw for tourists from the region. The vibrancy of the retail landscape is due to the fact that it is constantly evolving. Consumer preferences change; driving new concepts and new products. Retailers have to constantly update their capabilities and strategies in order to capture the additional dollar from every customer that walks through the store.
In order to stay ahead in the constantly evolving retail landscape, I would like to encourage you to invest in three things – productivity, people and technology.
INVEST IN PRODUCTIVITY
I am glad to note that the productivity of the retail sector has been increasing, with nominal value-added or VA per worker growing at 3-4% per annum from 2009 to 2012. Since the launch of the retail productivity plan in 2011, over 250 retailers have been supported in various productivity upgrading initiatives, such as process improvements and customer service enhancements. Over 300 CEOs and productivity managers from the retail sector have been trained under the retail productivity plan via learning trips, productivity projects and hands-on workshops. They will be the champions for driving productivity within their companies.
I would like to urge more retailers to tap on the productivity schemes available to grow their businesses. Micro-retailers can also take that first step forward to make incremental improvements to their businesses as well. They can either tap into the readily-available online self-help toolkits or the Innovation & Capability Voucher (ICV) to help them enhance their capabilities and improve productivity.
At Budget 2013 earlier this year, I announced the recommendations from the SME Review completed last year. One of the new programmes announced was the Collaborative Industry Projects (CIP), led by SPRING Singapore. CIP takes the productivity improvement effort one step further, by having groups of companies come together to adopt improvement initiatives through shared services and other innovative solutions. Since then, we are beginning to see interesting collaborative productivity projects taking shape in the retail sector. For example, SingPost has taken the initiative to work with SME retailers to offer integrated e-commerce solutions. These e-commerce solutions include digital marketing strategies, warehousing capabilities, fulfilment platforms and customer service initiatives.
INVEST IN PEOPLE
In a knowledge-based economy, companies compete on their productivity, innovative capacity and knowledge assets. People are a key, if not the most important, knowledge asset for a company. This is especially true for a services-oriented industry like retail. It is therefore an imperative for retail companies to be committed to investing in their people at all levels.
I am encouraged that our retail companies have indeed been investing in training and upgrading their retail personnel, to ensure that they are equipped with the latest best practices and skill sets. Since 2006, more than 43,000 individuals have been trained in retail Workforce Skills Qualifications (WSQ) programmes by the Singapore Institute of Retail Studies.
In addition to training the current retail workforce, it is also important to attract the right talent to help shape the retail industry of tomorrow. I am pleased to announce today that SRA will be participating as one of the strategic partners in SPRING’s SME Talent Programme (STP). The programme, which I launched in June this year, enables SMEs to attract and retain talents by offering study awards and work opportunities for students graduating from the Polytechnics and Institute of Technical Education (ITE). A key success factor for this programme will lie in the partnerships with trade associations that possess a deep understanding of their sectors’ needs. The associations will be important partners to match suitable talents with the companies participating in the programme.
In the short few months since the launch of the STP in June, 200 student applications have been received for the programme for various industries. I am confident that with SRA joining this programme, the retail industry will be able to reach out to the next generation to embark on an exciting career in the retail sector. I strongly urge retailers to come forward and take advantage of this programme.
INVEST IN TECHNOLOGY
Retailers also need to invest in technology to innovate, up the ante with their concept offerings, and widen their market reach. Technology can give retailers an advantage over competitors and generate new growth opportunities for their companies.
One company that has used digital technology to their advantage is local fashion tailoring company, Marcella. The young entrepreneurs behind the brand were not tailors to begin with. Using a different approach, they used technology to automate the usually long-drawn and laborious tailoring process. To remove inconsistencies in taking body measurements, Marcella invented a measurement module under the Enterprise Resource Planning (ERP) system using a set of proprietary algorithms to process raw body measurements into a body profile. This eliminates human error to improve accuracy in tailoring, and reduces the time taken to take numerous body measurements.
Marcella also invented the “Reference Fit” model on their website, a breakthrough method for determining their customers’ sizes when they place tailoring orders online. The model contains a database of off-the-rack shirts from other major brands, such as Ralph Lauren and Zara. When customers select these references, the system will automatically churn out a set of body dimensions for tailoring orders. With these new initiatives in place, Marcella saw an average reduction of four days for order delivery and managed to reduce their in-store manpower requirement by approximately 50%.
Technology has also given retailers more opportunities and avenues to market their products beyond their brick-and-mortar stores. One of the areas many retailers are looking into is Omni-channel Retailing. Through leveraging on digital technology, Omni-channel Retailing enables retailers to engage customers through multiple channels, providing the customer with a seamless retail experience across different platforms.
As an illustration, let me walk through a few typical omni-channel purchase scenarios. A customer can start by researching about a product online. He or she can order the product online and opt to collect the item from the physical store. The reverse is also possible. A customer could try or examine a sample product in the physical store, and after deciding on the model, order the item online. Going further into the future, in-store digital kiosks can update customers on the latest offers and loyalty programmes or give additional information about a product by scanning a barcode. Through these digital channels, retailers can also keep track of customers’ purchasing patterns and adjust product offerings based on customer demand. The result would be a retail experience which is convenient, customised, and most of all engaging for the customer.
CONCLUSION
The key to success for our retailers lies in the ability to consistently adapt and stay ahead in the competitive landscape. By investing in productivity, people and technology, retailers can better understand and respond to the needs of customers, and develop innovative concepts which give them an edge over their competitors.
I hope that over the next three days, you will be able to gain meaningful insights from the conference which will inspire and spur you to chart new directions for growing your retail companies.
I wish everyone a fruitful conference and a great learning experience. Thank you.
1 Source: DOS, 2012e. Retail sector as defined by SPRING excludes motor vehicles & petrol stations as well as hawkers & stall-holders