Singapore has not only emerged as the new hub for innovation, but it has also come up as a new market for brands related to groceries and other daily needs. As per a study by IGD, Singapore’s grocery market is on the rise and is expected to rise by 14.5% per annum until at least 2023. In other words, Singapore’s grocery market expected to reach close to 10 billion dollars by 2023. At this size, Singapore will be the 23rd largest grocery market in Asia. While the size, in terms of money, is not very significant, but considering the strategic importance of the country, this figure can be used as a benchmark to measure the worth of industry presence in other critical Asian cities.
The traditional method of shopping groceries stands at approximately 20% right now. However, let’s believe that with time, the trend will change as markets continue to upgrade to modern technology. IGD also considers that while supermarkets will continue to flourish at a decent rate to 3% per year, it will be the hypermarkets that will suffer the most. The government policies and the changing consumer preferences will make the sellers focus on establishing their small outlets, bringing the CAGR of hypermarkets to around 1.1%. However, there are more factors than just changing government policies and consumer needs that will affect the future of grocery shopping in Singapore. Let’s take a look at the top 5 trends that will influence how people in Singapore will buy groceries in the coming future.
E-commerce and Social Selling
Like any other foray in Singapore, technology will drive ‘this’ change as well. The consumer trends will shift even more towards online buying. It will force the sellers to come up with robust and competitive solutions to enable their customers to purchase from the stores via the internet. The change in consumer habits will also result in a shift in the marketing plans of the companies, forcing them to spend more time on digital platforms.
Note that the race to win consumers will not end at creating an online marketplace. The online outlets have to be fast, reliable, and uncluttered to support a user experience that is easy to follow. However, unless the consumer winning efforts compliment the quality of the product and efficiency of the process, the companies will have a difficult time reaping benefits from the online marketplace.
One of the latest entrants in Singapore’s online grocery retail scene, Prime Now, by Amazon, is one of the few e-com platforms that has been able to strike a perfect balance between user experience and product variety. Although, it is no surprise that Prime Now has grown in popularity among the intended user base pretty quickly. Given its Amazon roots, but, the fact that Amazon limited the number of orders that the platform will accept to maintain the quality of experience and timely deliveries is a commendable move.
The lifestyle of the people – flexibility is the key.
The lifestyle of the Singaporeans has undergone a significant change. Most of the people living in Singapore do not have enough time to run to a store and shop for groceries. Hence, they need solutions that are fast, precise, and relevant. Another thing that retailers need to understand is that most of the people who shop through the phone and internet aren’t available at home to accept the deliveries. Hence, the businesses will need to come up with strategies that cater to this problem. 7-Eleven is one example that has cracked the code to higher customer satisfaction. Apart from home-delivery, 7-Eleven allows the consumers to pick up their groceries from the store while on their way back to home. Therefore, customers do not have to worry about missing a delivery, and also has the groceries just in time.
Shopping – An Experience
Surprisingly, the answer is ‘success.’ Habitat by Honestbee is a multi-sensory and omnichannel store concept, spread over 60,000 sq. Ft. of land. Several robots, machines, sensors, and touch-screens work together to create an interactive and human-less interface for the shoppers. The store has 20,000 different products and a vast experience area where customers can see, touch, smell, and taste several international varieties of food in a nature-inspired interior.
Honestbee has successfully created an impeccable shopping experience using the technology. They have found success with people in the age group of 25 to 45, who like to visit the store because of its homely feel. Habitat is one of the top 10 trending places on Google in Singapore and has also made it to several top lists of trending shopping destinations of the world on the internet.
Brick and Mortar Stores are here to stay.
Although online grocery shopping is on the rise, it will need time to surpass the current brick and mortar stores open throughout the country. Fair Price and Dairy Farm dominate the offline grocery markets with the former focusing on opening more stores in the coming years. However, their market share has been affected by the new entrants in the grocery sphere like Hao Mart. Interestingly, the new entrants are paying a premium price to establish themselves in the country, and they have gotten some success as well. However, the small-sized marts may struggle soon, owing to the high rental costs and deeply discounted prices to put up to lure customers.
Also, retailers who started online operations first are now coming up with conceptual models for offline retail sales, as well. It has led to a decreased market share for the giant supermarket chains in the country. BUT the new entrants are paying a premium price to establish themselves, and interestingly, they have gotten some success as well. However, the small-sized marts may struggle soon, owing to the high rental costs and deeply discounted prices to lure customers.
Reclaiming the Old Sense
The east has copied the idea of supermarkets from the west, where grocery stores were once the place where everybody bought their breakfast and dinner. The grocery stores in Singapore are now going back to the roots by serving ready-made food, fast-food, and even establishing a restaurant for the shoppers adjacent to the store.
Another reason why such dining options are a hit in the grocery marts is that an average Singaporean is aware of the benefits of eating fresh and healthy. Grocery stores provide the easiest way to eat fresh fruits and vegetables right off the shelf.
FairPrice has already started experimenting with this concept at its store in Vivocity mall. The store features a dining area, called The Kitchen, which serves delicious and freshly prepared delicacies to the customers. The presence of a dedicated coffee shop operated by Tiong Hoe Specialty Coffee and a live seafood tank ensures that the customer experience at the FairPrice is changed completely.
Meidi-Ya is another retail store which has experimented with kitchen concept with a store in Singapore. The Japanese brand is famous for its fresh food import from Japan and features a gelato stand, a sweet shop, and a restaurant specializing in Japanese cuisines.
The Future of Grocery Shopping in Singapore
Technology is going to change the grocery sales channels in Singapore. Habitat is one of the most excellent examples of wonders that technology can do in the sector. FairPrice stay focused on opening new stores while Dairy Farm has its eyes on the development of online selling modules, giving mixed signals on what the corporates have sensed from the market, and how do they perceive trends. Nevertheless, the upcoming grocery stores will have to involve technology in their sales and operations to achieve high levels of customer satisfaction and stay relevant in the long run.