It's predicted that ecommerce sales in Singapore will reach $14 billion by 2027 as the country's digitally savvy consumers continue to move their shopping habits online. It's a thriving digital ecosystem that presents an immense opportunity for Singaporean brands to deepen their market presence and capture more revenue.
But there's work to be done if retailers are to capture this opportunity, according to the findings of our new research: "Mind the Gap: Consumer Expectation vs Retailer Reality."
Our study surveyed 300 retail business decision-makers and 2,000 consumers in Singapore, revealing a discrepancy between customer expectations and retailer priorities. Should retailers fail to bridge this gap, they risk forfeiting potential revenue and losing market share to domestic and international competitors.
Here are three areas our findings suggest retailers should prioritize to capture the ecommerce opportunity in Singapore:
Optimize delivery cost and speed
Protect customers at the checkout
Optimize payments on the front- and back-end
Singaporean consumers cite expensive delivery costs as their main pain point when shopping online. In fact, 62% say they'd abandon their cart if the delivery costs were too high. This means retailers face the difficult challenge of balancing sales loss with thinning margins—a challenge that's likely to intensify as inflationary pressures contribute to escalating logistical costs.
If retailers find their hands tied in this environment, they must think outside the box and explore alternative avenues to mitigate customer impact. Some options include reducing the threshold for free delivery or introducing membership schemes encompassing free delivery as part of a comprehensive benefits package.
87% of Singaporean consumers are worried about fraud, with 25% having experienced fraudulent incidents while engaging in online commerce in the last year. Consequently, many consumers will abandon their carts if they feel they are at risk at the online checkout.
Establishing a secure and trustworthy checkout process is mission-critical to avoid cart abandonment and revenue being left on the table. It also has a longer-term impact on the brand. The research finds 62% of consumers see payment security as essential when deciding whether to revisit a site in the future.
Retailers can implement various measures to deliver a secure service and foster trust. These include ensuring the checkout feels part of the overall brand experience and prominently displaying security badges and certifications during checkout. Additionally, more consumers are happy to authenticate themselves through 3D Secure, with 47% saying they feel more secure when asked to follow this process.
Singaporean retailers have emphasized enhancing their payments significantly, with 99% making changes or improvements to their payment stack within the last 12 months. This follows the payments innovation and explosion in alternative payment methods witnessed in Singapore and across countries in Southeast Asia.
Providing preferred payment methods at the checkout is important. One-third of merchants say they've added new payment methods to keep up with demand in the last year. And it's an area that retailers will continually need to focus on as consumer payment preferences evolve. We found that 37% of retailers report higher sales levels by widening the choice of payment options and currencies.
But in the complex and fast-changing payments ecosystem, focusing on the front end will only get retailers so far. Nearly half of Singaporean consumers want a slick, simple, and fast payment process. Ensuring payment is processed successfully after a customer has pressed "pay" is vital. This is where retailers need to evaluate the payment service providers (PSPs) they're using to ensure they deliver the desired performance at an acceptable cost. Just under 50% of retailers told us that changing their PSP has led to the biggest rise in revenue.
Read our post from our payments lead, Theo Spyrides, to understand the benefits of working with multiple PSPs and using orchestration to lower costs, improve authorization rates, and capture more revenue.
Singaporean retailers are ambitious and focused on growth in their home market and beyond their borders. However, our research emphasizes the importance of "getting the basics right" and meeting customer expectations in pursuit of this growth.
Striking this balance requires not only focus but also the presence of appropriate technical foundations and infrastructure to meet customer demands and respond quickly and effectively. This may not be the case, as 41% of retailers identify legacy technical debt as a fundamental obstacle preventing them from addressing existing challenges.
Reducing this technical debt is the most crucial step to enable retailers to serve their customers better, adapt to evolving market dynamics, and seize growth opportunities. It will empower them to meet customer expectations, optimize operations, and position themselves for success in a rapidly changing landscape.
Want to learn more? Download the full report to learn more about meeting consumer expectations in Singapore and capturing your share of the ecommerce opportunity.