In an exclusive interview with Telecom Review Asia, Leong Der Yao, Assistant Chief Executive, Sectoral Transformation Group, Infocomm Media Development Authority of Singapore, explored the initiatives helping businesses in Singapore leverage AI to innovate, personalize, and enhance their customer experience.
How is digitalization important to Singapore’s economy, and what steps should be taken to sustain the digital transformation efforts of Singapore's SMEs?
In the first-ever report on Singapore’s Digital Economy by the Infocomm Media Development Authority (IMDA), it was reported that Singapore’s digital economy generated a value-add of SGD 106 billion in 2022, equivalent to 17.3% of the nation’s nominal Gross Domestic Product (GDP), up from 13% of the GDP in 2017.
This signifies that digitalization is playing an increasingly important role in the nation’s growth and its ability to keep pace with the changing global economic landscape. The same report showed that Singapore’s small and medium-sized enterprises (SMEs) have made major strides in their digitalization efforts, boosting productivity and fostering innovation. We have seen an increase in technology adoption by SMEs, growing from 74% in 2018 to 95% in 2023.
What challenges have businesses faced in implementing generative AI, smart tech (robotics), and other advanced technologies into their operations, and how have they overcome these obstacles?
With the rapid evolution of technology and businesses citing challenges implementing advanced technologies like generative AI (GenAI) and smart tech, including high implementation costs, technical complexities, and the need for workforce adaptation, we have launched the Digital Enterprise Blueprint (DEB) this year. The DEB focuses on the next bound of digitalization for our SMEs. The DEB will enable our SMEs to be smarter, scale faster, be safer and support enterprises to upskill workers. The DEB is expected to benefit at least 50,000 SMEs over the next five years.
The IMDA has curated a list of pre-approved digital solutions to make it easier and more affordable for our SMEs’ broad base adoption. Around 20% of these pre-approved digital solutions under our SMEs Go Digital (SMEsGD) Programme are AI-enabled. Last year, more than 3,000 SMEs adopted and benefitted from these AI-enabled solutions, and we expect 15,000 SMEs to benefit from AI-enabled solutions over the next two years.
For digitally mature enterprises, the IMDA has also partnered with technology giants such as AWS and Microsoft to innovate and develop customized GenAI solutions through our GenAI x Digital Leaders initiative. We expect more than 400 digitally mature enterprises to benefit from this initiative over the next two years.
How are retailers in Singapore harnessing the power of data analytics and insights to inform strategic decision-making and drive innovation within their operations?
Last year, the IMDA partnered with Enterprise Singapore (EnterpriseSG) to launch the refreshed Retail Industry Digital Plan (IDP) which highlights digital solutions in three key focus areas: Customer Experience, Operational Efficiency, and Business Growth. The potential applications of these focus areas will help retailers address new challenges and opportunities to create a high-quality, immersive shopping experience for customers.
As retailers adopt more digital solutions, they increasingly face solution fragmentation. To help deliver a unified customer experience and streamline operations, digital solutions must be able to interact and complement one another in a holistic and integrated manner.
The IMDA has worked with several technology partners to offer SME retailers Omnichannel Retail Management (OCRM) solutions to help integrate different sales and customer-contact channels and back-of-house functionalities into one integrated software solution. This will provide retailers with greater operational efficiency; improved inventory management; increased sales and revenue; improved customer experiences; and will enable data-driven insights detailing consumer behavior preferences and trends, allowing them to make informed decisions about product offerings, marketing campaigns and other business strategies.
Retailers in Singapore leverage data analytics to enhance operations and customer experiences. Data analytics help optimize inventory levels and reduce wastage and stock-out situations. By tracking purchasing patterns and preferences, retailers can personalize marketing and promotions, boosting loyalty and sales.
A local retail garden centre, Far East Flora, has progressively deployed a suite of integrated solutions, including a point of sales (POS) solution, a self-checkout kiosk, a mobile app, a scan and go app, an e-commerce platform, a CRM membership loyalty and reward system, and an inventory and fulfilment management system that integrates with its existing ERP Oracle NetSuite system.
Aside from improving operational productivity, Far East Flora also obtained enhanced analytics and insights from the data gathered from the suite of integrated solutions. These insights enabled them to optimize the replenishment of fresh, seasonal, and limited-edition flowers, and ensure popular items were always in stock. Additionally, integrating data insights into digital platforms ensures streamlined shopping experiences as promotions can be sent via various channels.
Are there specific sectors or niches within the retail industry that you believe will experience significant growth or transformation in the near future? How are investors responding to these opportunities?
With more technology providers investing in AI and GenAI, we are seeing an increasing number of retailers make use of these technologies to expand their businesses. Based on consultations with EnterpriseSG, several retail sub-sectors such as beauty, fashion and furniture, are poised for significant growth and transformation, driven by the adoption of GenAI solutions.
In the beauty sector, customer experience can be enhanced through virtual beauty advisors and virtual makeup try-ons. In the fashion industry, product development and innovation are being revolutionized by AI-generated fashion designs and virtual prototyping. The furniture sector could also benefit from improved operations and productivity through inventory and supply chain optimization, and demand forecasting.
Besides developing personalized recommendations to consumers and creating unique products and services, local retailers are also using AI-enabled solutions to overcome the manpower shortage in the retail sector. One such example is the operation of unmanned stores, which are leveraging AI in the form of computer vision.
Local convenience store operator, Pick & Go, has been operating its unmanned stores using these technologies. Its stores are equipped with smart cameras that tag each customer in the store and monitor their in-store activities. Used in combination with other in-store sensors, the solution recognizes when a customer picks up an item. The item is then charged to the customer’s account when they leave the store. This solution improves operational efficiencies by reducing the frequency of stock taking. It also expands capacity by extending the stores’ operating hours without the need for additional personnel.
