As retail occupancy rates in Singapore plunge to the lowest in 10 years, it is easy to conclude that “physical retail is dead”. But Mark Wee, the Executive Director of the DesignSingapore Council (Dsg), disagrees.
Speaking recently at an industry seminar jointly organised by the Retail Centre of Excellence and Dsg, he highlighted a growing realisation that it is boring retail that is at risk of going extinct.
“Today the world is our shopping mall, the phone is our shop front and the brands that we remember are the ones that make us feel good,” he said, addressing some 80 retailers in the audience.
According to customer intelligence consulting firm Walker, customer experience will overtake price and product as the key brand differentiator for customers by 2020. Today, the retailers doing well are those that offer a customer experience that meets or exceeds customer expectations, said Mark, who was himself an experience designer before taking over the helm at the Council in 2018.
Take Muji, IKEA and Decathlon for example. All three have very intentionally designed immersive in-store experiences that leave an emotional imprint on customers. Going further, Muji has even opened two hotels in China, where guests literally live and breathe the Muji way. From the hotel room’s furnishings to its café and bookstore design, guests are immersed in the Japanese brand’s signature “zen” experience.
Mark also shared how the Alibaba Group has changed retail experience in China with its chain of Hema (Chinese for hippo) markets. Based on a hyper-local model, each Hema store serves customers within a 3-km radius. All transactions are done on a mobile app whether shopping online or at the physical store. Data is logged and machine algorithms work to deliver orders fresh or cooked within 30 minutes. As a result, the stores’ sales per unit area are three to five times that of other supermarkets, according to this report.
The race for the best experience is helping the relatively new fields of service and experience design gain new fans among organisations that don’t sell “design” as a product.
Grocers, hospitals, restaurants and banks are hiring experience designers. Some go further by placing design at the centre of their work i.e. having formal design processes for marketing, product and customer experience, and using design to shape strategies.
This goes beyond the traditional view of design as a “styling” tool – to make something look good. Instead, design is now used as a strategic tool to solve problems and create innovative solutions.
Research shows that such design-led companies attain more satisfied and loyal customers, competitive advantages, and greater market share than companies with a less mature design approach.
But design innovation needs the buy-in from C-suite executives as their endorsements will empower their employees to transform through design, stressed Mark.
This is why the Design 2025 Masterplan has clear thrusts to embed design into the national psyche, which include targeted outreach and thought leadership platforms like Brainstorm Design and the RCOE seminar to raise awareness, and pique interest in design adoption.
The Council also helps those organisations who are ready for design adoption to re-invent their business model and secure new market segments by linking them up with suitable partners as they embark on their design journey.
Author Maya Angelou once said, “I've learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
As Singapore brands experience great disruption, it is opportune to redesign themselves as memorable experiences that we cannot easily forget.