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Gearing up for Post-Pandemic Recovery: Why Digitisation and Innovation are Crucial for the Retail Sector
October 12, 2021 News

Authored by: Tan Choon Chai, Senior Vice President, Business IT and Digitalisation at SPTel. 

The COVID-19 pandemic hit the retail sector hard with reports suggesting that revenues plunged by 40.5 per cent in just the last year. Besides the financial struggles of having to juggle rent, overheads and the decrease in customers due to lockdown restrictions, the pandemic highlighted new challenges for the retail sector.

For starters, established and predictable buying cycles which delivered year-on-year against accurate revenue forecasts were upended. The industry saw unpredictable demand cycles as buying patterns changed drastically whether it was from panic buying or a greater shift towards outlets that provided online shopping and delivery options.

Advance planning for stocks, inventory and even manpower scheduling was disrupted and with the uncertainty of the entire lockdown landscape, many aspects of day-to-day operations became almost unmanageable compared to the familiar routines established over decades in the pre-pandemic era.

Alongside the usual health and safety at work issues, retailers needed to implement initiatives that can minimise human contact between their staff and customers while still ensuring a good in-store experience. Retailers also needed to deploy their available manpower more effectively and efficiently to minimise exposure risk.

Against this backdrop, Covid-19 created a realisation that transforming digitally and adopting innovation is critical if they are to future-proof their operations against this and future disruptions.

The advantage of digitisation – A boon to operational efficiency and improving the customer experience

By implementing Internet of Things (IoT) sensors such as temperature scanners, retailers immediately send a strong message to customers that they have adopted a safety-first approach that not only reduces the hassle of manual temperature-taking and improves their in-store experience, it demonstrates tangibly that their safety comes first.

With sensors and video analytics, retailers are also able to determine shop congestion through a data-driven approach. This will enable retailers to abide by capacity regulations without deploying additional manpower to physically count and track in-store customers, minimising the need for human interaction. In parallel, by better managing traffic flow, retailers are able to better deploy their now-reduced manpower to more important tasks.

Retail process flow automation can drastically simplify store, warehouse and stock management. For example, in the case of a supermarket, through introducing automated monitoring of refrigerators the benefit is receiving real-time notifications when temperature levels shift, mitigating potential losses due to spoilage while meeting food safety best practices. Moreover, sensors can also provide much-needed visibility on inventory, ensuring that retailers have the right amount of supply and resources.

Today’s retail players have the opportunity to change their game but if they are to address these challenges, they need to have the right technology and infrastructure that is cost-effective and robust.

A robust and cost-effective Internet of Things (IoT) platform

This future-proofing relies on being able to connect a whole host of different sensors and smart devices onto an easy to use and robust Internet of Things (IoT) platform. Fortunately, this does not require dealing with multiple vendors or suppliers to build the system from scratch as there are a number of proven and ready to use platforms for IoT device management available today. These reduce the investment requirements and provide a one-stop solution that will provide end to end device management through to system connectivity. These providers also offer pay as you use models that minimise the cost to entry and allow an organisation to scale up as they become more familiar and start to reap the advantages.

Grants are also readily available from Enterprise Singapore (ESG) to help retailers kick-start their IoT journey and deployment.

Thinking on the edge

For retailers that have progressed or are looking for applications that require real-time responsiveness especially in managing a cluster of store fronts within the neighbourhood or “district”, such as video analytics to improve their in-store experience, they should consider edge cloud computing. This is absolutely crucial as latency and slow responses will lose the business opportunity to engage in real-time and capture customers during what could be a fleeting visit. For example, using video analytics applications, you can not only promote the right advertisement to a customer but the system can alert a sales personnel to be on hand at the right place and time to promptly attend to a customer’s needs or demands. Likewise, video analytics can provide an alert if additional manpower is needed for crowd control but to be effective, this must be built on the real-time capabilities offered by edge computing. By leveraging on edge computing, retailers could potentially shuffle resources across a cluster of stores within the vicinity to effectively increase productivity and capture business opportunity. This is the game-changer which can close the sale now as opposed to losing it through a time-lapse.

The benefit of choosing edge computing is not only the high performance it provides. It also reduces the Information Technology (IT) and Operation Technology (OT) footprint in-store, freeing up precious store space for other uses. It is also easier to maintain and manage and frees retail owners from the need to invest in server equipment.

Retailers need a partner that is able to provide the edge as-a-Service to futureproof their deployment and provide the ability to scale up their computing resources when needed to support multiple sites or outlets.

Digital connectivity is paramount

At the back of automation and smart devices, resilient connectivity is paramount to ensure the technology is up and running without disruption. Low latency is crucial to have real-time data-driven decisions as starkly demonstrated when an island-wide fibre broadband outage in 2016 left 490,000 users cut off from the Web. The outage lasted for nearly 24 hours extremely inconveniencing their customers while doing immeasurable reputational damage.

The incident demonstrated to the entire nation the importance of network resilience and digital connectivity and its place in the risk management plans of any organisation. Customers expect close-to-zero downtime and one key takeaway from the incident was for organisations to focus on network resilience to ensure their customers will have the best experience possible at all times.

Learning from local supermarket chain Sheng Siong

Sheng Siong, the third-largest supermarket chain in Singapore is always looking for a way to improve the shopping experience for their customers. To provide superior customer service and anticipate customer needs in advance, they implemented resilient and reliable connectivity to support their digitalised processes such as people tracking and stock management. Sheng Siong also leveraged edge cloud computing solutions to support their in-store analytics, reducing the need for on-premise servers while enjoying all the advantages of real-time responsiveness.

As we move from the pandemic to an endemic response to the virus and while much has been learned in the fast response tactics, it should not be considered the end of the road.

Savvy retailers must continue to adapt and see technology as a friend which will enable them to view their operations in real-time for better customer and operational outcomes. With the countless benefits provided by automation and technology, retailers must seize the opportunity to transform and digitise their processes.