2 days ago
Singapore retailers want to use AI, but employee resistance a ‘major hurdle': poll
[SINGAPORE] Retailers in the Republic are greatly interested in the use of artificial intelligence (AI), but remain wary of giving it complete control, according to a survey released on Wednesday (Aug 20) by
Out of the 350 retail decision-makers surveyed, 98 per cent said they were actively exploring or deploying AI agents, but only 10 per cent trusted AI to autonomously manage their entire customer journey, said a report from the work management platform.
'Singapore's retailers see AI as an opportunity to deliver personalised, intelligent and faster customer experiences,' noted Gavin Watson, senior industry lead at 'However, to fully realise these benefits, businesses need the trust, skills, and resources to make the technology viable for them.'
Retail businesses in Singapore have been facing a tough time for more than a decade thanks to rising rents, labour crunches and digital disruption. Covid-19 only helped accelerate the decline in footfall, with the Tripartite Cluster for Retail responding with a new set of progressive wage model recommendations .
A Morgan Stanley research report in July flagged Sea Ltd as a 'significant driver' of technological innovation, particularly in the AI sector. Sea has adopted AI for consumer-facing and internal uses, boosting gross merchandise value by improving recommendation accuracy and improving purchase conversion rates.
Customer service was the area most picked for AI usage among the 98 per cent of respondents open to using or currently using AI agents.
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Additionally, 94 per cent of all respondents said that local businesses will be able to compete against the pressure from global retail giants thanks to AI.
Employee resistance
However, nearly seven in 10 felt that employee resistance is a 'major hurdle', with the figure reaching 77 per cent for stores in shopping centres and malls. The report posited that concerns over job security and skills atrophying, and an imperfect understanding of AI's benefits for them could be the reasons behind this.
The issue is particularly present in micro and small retailers – those with up to 50 employees. Among such companies polled, 37 per cent cited this as the top barrier to AI adoption, followed by complexity and cost.
In comparison, 44 per cent of retailers that have more than 1,000 employees have in-house AI teams, and 50 per cent have a C-suite-level AI specialist.
'Instead of viewing (AI) as a challenge, physical retailers must capitalise on this opportunity by enhancing human touch with AI,' said Watson.
He added in an interview with The Business Times that the brick-and-mortar experience is 'not going to go away'. Instead, he expects AI to enhance the customer journey. For example, improvements such as showing the 'best possible outfit' on the most relevant model via a website or an app could entice the customer to visit the store and try on the clothes.
AI can also help prevent what is called 'showrooming', said Watson. That is a phenomenon where customers go down to physical stores to test or try products, but eventually make their purchase online through platforms such as Amazon. Higher costs for physical stores can prevent permanent price-matching schemes, which means better solutions are needed for this complex issue.
'We did see that as a trend maybe three to five years ago,' Watson explained, but stated that a shift towards loyalty programmes has also helped stem the showrooming issue.
Humans still at the forefront
Even though the majority of Singapore retailers are interested in AI usage for their businesses, only 7 per cent said they will allow AI to make independent decisions.
Customer acceptance is also a factor that the respondents said they are being careful about. Data privacy in sectors such as health and beauty was flagged as a key issue to overcome.
'It's definitely a challenge,' said Watson, adding that he foresees the creation of C-suite roles for AI governance in the next few years.
He elaborated that 'overly intrusive' and 'controlling' uses of AI could end up harming brand authenticity and eroding customer trust.
Data collected in the survey seemed to back up his assertion; 75 per cent of respondents believed that customers will be more loyal to brands that are transparent about AI use. He also estimated that only about 30 to 50 per cent of retailers would want to deploy AI for customer-facing uses.
While AI is often viewed as a threat to sustainability, particularly due to its high energy and water consumption, three in four Singapore retailers polled by said they are increasingly using AI to drive their sustainability efforts.
The retail sector is considered one of the highest consumers of resources and generators of waste, said the report, and retailers said that AI has enabled them to optimise production, reduce waste reduction and implement circular economy principles.
