Lifting of lockdowns - what can offline F&B owners and retailers expect?
Updated: 2 days ago
It is no question that COVID-19 has turned our lives upside-down. For business owners, 2020 has been an unprecedented year. Many had to adapt and change their business strategy almost overnight, and unfortunately, those who were not able to do so fast enough would have suffered the consequences.
A popular joke going around highlights how COVID-19 has forced businesses to embark and accelerate their digitization process. In Singapore, F&B owners scrambled to get onto delivery platforms while retailers began their shift onto ecommerce platforms, with efforts supported by the Government’s numerous digitalization packages.
While the importance of having an online presence cannot be understated, all hope is not lost for offline retailers and F&B owners. At AImazing, we believe that there is still much value in the offline market, and thus have identified offline trends that we foresee will occur in the coming months.
Short run: Revenge Shopping
First observed in China, it refers to the phenomenon where shoppers binge buy after coming out of a lockdown. For instance, Hermes's flagship store in Guangzhou recorded US$2.7 million in sales in its first day of reopening after months of quarantine. Similar scenes were also observed in Korea.
Back in Singapore, the start of Phase 2 meant people could finally shop and dine out after more than 2 months of quarantine. This led to a drastic increase in mall footfall over the first weekend, with some experiencing a 70-80% jump in shoppers and retailers also saw their sales increase significantly from the weekend just before circuit breaker. This just goes to show that while online platforms and shops were good substitutes during the lockdown, humans are still very much social creatures and long for physical experiences that digital platforms are still unable to fulfill.
Despite the promising return, many are still cautious about the road ahead. With consumers having gotten used to online shopping over the past few months, was this increase in mall footfall merely an anomaly and have consumers changed their consumption habits?
Long run: Web-influenced offline sales
Though Singaporeans may be warming up to the idea of shopping online, the concern that online will completely eat up offline sales is likely to be over exaggerated, especially in a densely populated country like Singapore. Shopping malls and food outlets are located strategically in neighborhoods, making it extremely convenient for individuals to head to a store. Recently, online sales figures in April 2020 for both retail and F&B have shown that online sales still make up less than half of total market sales in Singapore.
Nevertheless, it is important for business owners to understand that the consumer shopping journey now rarely exists in silo. No longer is a single touchpoint, sufficient in attracting the customer’s attention, but an omnichannel approach is required. After all, “32 percent of consumers in Singapore always research online before purchasing offline, and 25 percent of them always research offline before purchasing online”. It is thus crucial for businesses to not only reach out to customers by having good physical offerings, but also ensure that potential customers can reach out to your business online, be it through digital marketing efforts or user reviews. Without a good presence on either channel, it is likely that your business will slip under the radar and not even be considered by people.
AImazing understands both sides of the coin. For retailers and F&B owners, both online and offline strategies hold equal importance and it is important to capture customer’s attention and retain them in the long run. On the other hand, Singaporean consumers are generally very price and promotion-driven. We have thus come up with our Online-to-Offline Marketing Tool, which offers retail and F&B owners to take advantage of both channels to bring in new customers. You can read more about it here.
Ultimately, the future of retail and F&B lies in a hybrid model - we have even seen large ecommerce players like Taobao set up a physical store here in Funan, which goes to show that the line between offline and online is slowly blurring.