It is almost unquestionable that Singapore boasted one of the most successful economic stories in the last half century. Through our rapid development, our economy has transformed from a fishing hub to one that is now heavily service-oriented. As Singaporeans rose to achieve one of the highest purchasing powers in the world, Singapore naturally became an ideal destination for retailers to set up shops here.
Yet, the irony of falling foot traffic in Orchard Road is the result of retailing becoming highly commoditised and saturated here. No longer in its former glory, Singapore’s prime shopping district is steadily losing its relevance and this should not come surprising.
To be precise, while shopping malls and those chain retail stores have sprawled all over our tiny island, retailers are mostly still sticking to their traditional brick-and-mortar model. In economics, this phenomenon is understood as diminishing marginal benefit: Why travel to town if you can find the same goods and services in your neighbourhood?
Despite having developed first world technologies, Singapore’s retail sector fell behind and failed to modernise and innovate to keep customers interested. After all, is it not consumers’ ever-changing tastes and preferences that are the demand issues that retailers have to constantly address?
Aiming to help retailers adapt, local-listed Accrelist recently developed its first unmanned store concept to address this problem. Shares Investment had the privilege to meet with CEO and Managing Director Mr. Terence Tea, who was generous enough to give us a personalised tour of the technology driving the setup.
Recognising The Problem
Society values and pays for businesses that solve problems. But as a seasoned businessman that has gone through his share of challenges in the past, Mr. Terence Tea understood that to address the problem, one must first recognise it.
For Singapore’s ailing retail sector, the problem lies with retailers not being able to meet the demands of contemporary consumers. The shopping experience in Singapore has not changed or evolved much, except that goods are now being displayed in more glamorous shopfronts.
The lack of any novel experience makes shoppers feel a growing distaste and general sense of boredom towards shopping in Singapore. On the other hand, however, our neighbours and other developing countries are gradually gaining on Singapore in terms of their retail offerings. Meanwhile, our local retailers are also burdened with the double whammy of rising manpower costs and rising rental rates. So how is Accrelist intending to help breathe some life back to the retail sector?
First Unmanned Store Concept
Accrelist is the first to bring artificial intelligence (AI) retail technology solutions to a physical store in Singapore.
Introducing its set of technologies, the store showcases how a combination of AI, facial recognition technology, mobile applications and payment systems can all be streamlined into a seamless process.
The process begins with a new customer downloading and signing up for the store’s mobile application. During the sign-up – a one-off procedure that takes less than three minutes – a facial identification is captured to form the customer’s profile. For security purposes (anti-theft), customers can only enter the store using the facial scanner.
In an unmanned shop, the store will be equipped with an AI-powered robot that is programmed to greet and assist customers with a range of queries, such as product information or perform other tasks such as leading customers to the produce aisle or playing songs upon the customer’s request. Equipped with AI technology, the robot is constantly self-learning and is also programmed to return to its charging port for recharging when needed.
After picking out items that the customer wishes to purchase, facial scanners are used again for self-checkout, payment and exit. Products are tagged with Radio Frequency Identification (RFID) to track movements which the receiver at the checkout platform detects and tallies. The bill is automatically deducted from the customer’s digital wallet. The customer could also choose other desired mode of payment during the sign-up process.
On the backend, the system is imbued with inventory management applications that enable merchants to track and collect data. There are also tools for management to analyse big data to identify consumer trends and preferences.
Redefining Local Retail Scene
The model can be easily replicated to fit the needs of various merchants and with the help of its technology, Accrelist believes that its AI retail technology solutions can help to redefine the local retail scene.
According to Singapore’s Ministry of Trade and Industry, labour cost itself makes up about 35 to 38 percent of a business cost structure in the retail trade sector. To a retailer, this could surmount to almost 25 percent of its topline, which WE9GO’s could help shave off. Ultimately, this can help retail prices to be more competitive to our regional peers and shoppers get to experience a more seamless experience. Cost-savings can also be rechanneled to value-add services or develop more attractive products.
Mr. Terence Tea explains, “WE9GO is a leading example of how a new and mdoern retail model should be. Enhanced with AI technology, retailers can become more efficient in streamlining their processes and hence giving shoppers a more satisfactory shopping experience.”
Indeed, Accrelist’s AI retail technology foray is also paving the way for Singapore’s Smart Nation aspiration. For one, we believe the tech could be transmogrified to serve the purpose of other sectors as well. It is not hard to imagine that the applications of Accrelist’s solutions being deployed in restaurants, our hawker centres and even the hospitals.
Already, Shares Investment has caught wind about some large real estate managers showing some interest in deploying Accrelist’s technology. With such additive benefits to both consumers and merchants, the potential returns are enormous.