11 Trends in 2018 That Will Improve The Retail Industry - A Fearless Forecast

1. Brick & Mortar

Daniel Tay
Founder & CEO, Foodgnostics Pte Ltd / Cat & the Fiddle Pte Ltd / Old Seng Choong Pte LTd

2018 is going to be challenging, but at the same time exciting as more businesses are going cashless and are taking automation to the next level.

I foresee many F&B businesses and brands, in pursuit of efficiency and cost effectiveness, outsourcing much of their R&D and production to companies that are set up specifically to cater to those needs, as they are unable to meet the demand of on-site R&D and production. This is not a bad thing as long as these brands take responsibility to ensure quality control of the products under their brand.

Brick and mortar businesses may now be more a cosmetic-driven investment, i.e., focused on giving consumers an opportunity to see, touch, smell, and taste products, but still with the main mode of operation being cashless payment and online purchasing.

This means more store spaces are going to be made redundant. Landlords may need to be a little more realistic with rental prices if they want to fill spaces and they may find there may be more demand for smaller spaces, compared to the ‘large store’ formats from previous years.

Several huge concepts this year have folded due to lack of walk-by customers and their inability to sustain rental and staff pay.

2. The Need for More Manpower

Aziza Sheerin
Director, Singapore, General Assembly

There are 18,200 job vacancies in the Infocomm sector, and this is expected to grow by another 42,300 in the next three years, says IMDA’s Manpower Survey. Individuals skilled in areas like software development, digital marketing, data analytics/data science, and cybersecurity are going to be in demand.

As technology shifts industries, the kinds of skills that organizations need from their staff evolve as well. Companies can’t just fire a whole batch of ‘obsolete’ talent and hire new ones, and the current practice of companies poaching talent from each other is not sustainable—there just aren’t enough people with tech skills to go around in the market. Right now, organizations spend way more on hiring and firing than they do on training. 

We’re going to see companies focus more on re-skilling and upskilling their staff. General Assembly has come up with an alternative, sustainable approach to help companies build their talent pipeline. We’ve been working with a number of Fortune 1,000 companies to re-skill workers, equip new hires with relevant skills, and ensure that organizations are creating a more diverse workforce.

3. Data Science

William Chin
Director, Mummys Market Pte Ltd

Data collection and data science will be the key force for the digital world, regardless of industries. Many businesses are starting to acknowledge the power of data. Alibaba, Amazon, Facebook and other global enterprises have specific departments for Data Scientists.

Retail will start stabilizing as the industry begins to see an equilibrium between retail, exhibitions, and online. Having said that, I believe Niche Baby stores will be the driving force of the retail segment, and departmental stores may start looking at shrinking their baby and kids section. 

Due to Singapore’s limited land size, retail rental rates will remain high. I don’t expect to see any new large niche baby/kids stores opening, and because of that large-scale exhibitions will still be the one-stop-shop. It will be a year where the strong gets stronger and the bottom 20 percent will be replaced/removed unfortunately.

I foresee the landscape of digital to be a fierce battleground between Lazada (Alibaba) and Amazon within the baby and kids verticals amongst other verticals that they do.

4. The Rise of Experience Management (XM)

Foo Mao Gen
Head of Southeast Asia, Qualtrics 

Experience management (XM) XM category was created to help companies measure, prioritize, and optimize the experiences across the four foundational aspects of a business – customers, products, employees and brands.

In 2018, XM will continue to rise in Asia Pacific, with more organizations increasingly adopting a customer-centric strategy. 

To be successful at providing exceptional experiences, businesses must be able to capture real-time, quantifiable feedback; therefore, they will look to leverage technologies to help them process data faster and gather invaluable insights.

Organisations that successfully nail experience management will reap positive benefits including improved employee engagement and customer retention rates. Failing to do so, on the other hand, will result in negative consequences including damaged brand reputation, loss of customers and revenue in the long run.

A New Direction for F&B

Yuan Oeij
Chairman and Founder, The Privé Group

Conditions will continue to be challenging for F&B, but will favor those who offer quality. Landlords are likely to realize that they need to be more realistic in terms of rentals, leading to more choice spaces becoming available at realistic prices.

The trend towards healthier eating will gain momentum in 2018. Whether for health reasons or greater concern for the environment, people will care more about where their food comes from. Seafood and vegetables will play a larger role in dishes and menus.

I anticipate one or two properly executed vegetarian lifestyle concepts, or some that put vegetables first, embracing the philosophy of having vegetables as the ‘star’ and meat or seafood as the ‘garnish’.

2018 will also see new concepts that are more casual, given the everyday dining preferences of people, rather than fine dining destinations where the market is smaller and conditions can be more challenging. This applies to celebrity or renowned chefs hoping to join in on the ‘Michelin’ bandwagon, where even if the food is ‘fussier’, the restaurant set up will be more casual and prices a little bit more realistic.

6. Go Niche or Go Home

Andrew Tan
Managing Partner, atomi x consultancy  

2018 is going to be a watershed moment for the retail industry. We may see more luxury brands exiting Singapore, just like what happened in Hong Kong. The retail industry outlook remains weak and I foresee the big shopping malls have to disrupt themselves completely to stay relevant in this tough environment. 

That said, it's time to go niche or go home. Most importantly, the retail industry must attract talents to join them, to elevate the industry beyond the Mom & Pop, and brick & mortar outfit. Strong independent retail leadership will emerge in 2018, putting the foundation for 2020.

7. Millennial Entrepreneurs Become The ‘New Normal’

Mao Daqing
Founder & CEO, URwork, 5LMeet 

The rising concept of co-working address supports the mobile working style of today’s modern urban professionals. An increasing number of people work on the go, resulting in an underutilization of working spaces. The market is not yet saturated, and the trend of optimizing latent spaces through the co-working model will continue for a longer while worldwide. 

We will see more rounds of M&As to form larger network of scale, and more cross-industry partnerships that will maximize utilization efficiencies.

As start-ups become more ubiquitous, and millennial entrepreneurs become a ‘New Normal’, co-working spaces gain heavy traction with the younger generation who find the community services and the business synergy appealing. Not just for indie start-ups, more and more MNCs are choosing co-working space, instead of the traditional corporate offices, to lower operational cost and maximize business synergies. 

8. Product Design to Take The Lead

Anders Buchmann
Chief Intrapreneur, Bang & Olufsen

In 2018, I think we are definitely going to see design play a different role, which is more integrated and kind of taking the lead. So instead of buying technology for the sake of the purpose it serves you, it's more a matter of “How does this product empower me all the time and not just when being switched on?” On the design front, it is going to be many things right now. It can be mixed with artificial intelligence, so design is something where the designer gives the brief and then the computer will proceed with design, saving both design hours, but also materials used, and the like. And then we see design of new business models, much like what we're doing with the BeoSound Shape, but all over the place. So design is really becoming many things right now, but even more so it's turning around what we expect from product and industrial design, and for design being the key driver and technology being an integrated part of that. I think that's where we're going to see change.

9. Autonomous Driving

Paul de Courtois
Managing Director, BMW Group Asia 

2018 will be an exciting, yet challenging, year for the automotive industry in Singapore and the region. In Singapore, the new Vehicular Emissions Scheme (VES) will have a significant impact on the price of vehicles, with diesel variants and plug-in hybrid models being affected the most. Car manufacturers in the market will need to rethink their strategy for capturing market share moving forward. 

We expect there to be more developments in the area of Autonomous Driving. Autonomous Vehicles are key to the Singapore Government’s plan for a car-lite future and many private, public and academic institutions are working to test these vehicles and address the challenges that lie ahead of us before Autonomous Vehicles can be tested on Singapore roads.

In the Southeast Asia region as a whole, there is a lot more opportunity for growth in 2018 with the ASEAN Free Trade Agreement in full effect. The lowering of intra-regional tariffs will result in higher economies of scale in the region and the opportunity for car manufacturers to offer a wider selection of vehicles to consumers and a growth in sales across ASEAN.  For the consumer this will eventually translate into lower retail prices for cars across all segments.

10. Corporations & Innovations

Barbara Guerpillon
Head, Unilever Foundry SEAA & LEVEL3 

In 2018, we will see more meaningful partnerships between startups and corporations, contributing to their business growth. As the pace of change increases, corporations know that meeting evolving consumer needs requires the right partners to innovate and build relationships with.

Ninety percent of corporates already working with a startup expect to continue doing so, and Unilever Foundry predicts physical shared working spaces will become commonplace to facilitate growth and break down barriers to collaboration. 

The State of Innovation research published by Unilever in late 2017 revealed the three most important reasons that startups and corporates work together: To learn something new, improve efficiency, and solve business problems in new ways that can scale.

LEVEL3 brings together Unilever, tech partners, investors, thought leaders and entrepreneurs – a clear example of a program that connects corporates and startups delivering results, and a community and workplace where startups can build sustainable and impactful solutions.

With the co-working market in Singapore evolving and maturing, we will see more spaces offer tailored solutions and services to their communities, further fuelling the startup ecosystem. 

The accelerator model will be redefined in order to insure real actionable output at the end of the program. The result will be more solid startups solving true business problems.

11. The Improvement of Logisitics

Dhruvil Sanghvi
CEO, LogiNext Solutions

We are now at a point where one-hour delivery in Asian markets are a scalable reality. Retail, e-commerce, FMCG, manufacturing and even maintenance services are focusing on delivering an omnichannel customer experience. To realize scale at this level, I predict that every facet of the distribution cycle will be analyzed and optimized to create an agile and responsive network.

The key success differentiator in fulfilling the omnichannel promise will be achieved by those that excel at logistics optimization and field service management. One-hour deliveries will involve an intricate distribution management system where all hubs and stock points are interlinked or connected through a central cloud-based tech solution that automates the dispatch of all deliveries while balancing product availability across the network.

Achieving such a system will entail a complete focus on end-to-end visibility of each logistics process and through real-time tracking of all field agents and vehicles. Reductions of 30-40 percent in address-locating errors will be made possible by machine learning backed schedule planning.

Brands will then better their customer or client interactions through strong analytics and feedback capturing mechanisms.