Dr. Vanessa Liu is the senior lecturer of the marketing programme at the School of Business in the Singapore University of Social Sciences.
Dr. Vanessa Lui is currently a full-time senior lecturer of marketing at the School of Business in the Singapore University of Social Sciences. She completed her Ph.D. in Information Systems at the City University of Hong Kong. Her focus research of interest is in online consumer behaviour.
How important is digital marketing for businesses in Singapore, especially small businesses and entrepreneurs, during the COVID-19 pandemic?
During the pandemic, 63% of Singaporean customers have spent more online with their total online spending increased by 31%. The main beneficiaries are the major retailers. This indicates that going digital should become indispensable for retailers. Digitalization is important to build digital agility amid crises like the pandemic.
Holding marketing activities virtually has become the new norm now. Even online learning, online enrichment classes and online religious events are getting more common. Businesses should therefore leverage on the trend and develop digital marketing initiatives, such as virtual product demos, online showrooms etc. For example, Nike launched its “Air Max Day 2020” virtually for customer engagement.
Digital marketing plays an important role in restoring customer confidence in retail. For example, customers now may be reluctant to visit crowded retail outlets and lose interest in products that require physical examination. They may not, for instance, be willing to try on clothes. Digital tools could be used to mitigate the situation. For example, fashion stores in China feature booking systems in their apps so that the customers may visit the store at a pre-booked slot to try to disinfect items. In other words, digital marketing does not only help boost online sales but also contributes to drawing customers back to the physical channels.
Digital marketing has also become important in engaging Generation Z. According to the Singapore Department of Statistics, the age group of 12-25 will outnumber Millennials by 2020, making up of about 17.5% of the national population. These customers are characterised by their tech savviness and navigating lives through social media. Digital marketing is important for both major or SME businesses to engage this emerging group of customers.
What advice do you have for small business owners in Singapore who are thinking about digitising their business or engaging in digital marketing?
A recent survey indicated that almost 40% of Singaporean customers are dissatisfied with delivery costs and time. Considering delivery costs are one of the major expenditure for e-commerce, SMEs should take special caution in order to strike a balance between meeting customer expectations and cost control.
Using platforms like Shopee, Qoo10 and Lazada may be a short cut for SMEs to go digital since the payment gateway and platform infrastructure are already supported by these platform providers.
About 78% of Singaporean customers were more likely to show support for local brands after the pandemic in order to help rebuild the economy. SMEs may draw on their local identities in doing branding online.
In determining the digital business model, SMEs may follow the steps of:
- Understanding the post-pandemic consumer behavior: consumer behavior has undergone dynamic and continuous changes due to the emergence of the post-pandemic new normal.
- Rethinking of needs for change of business models and strategies: SMEs may like to reflect on questions like whether their products are still desired by customers, how customers would like to acquire their products after the pandemic, and how digital technologies could facilitate or enable the business to adapt to these changes.
One common mistake made by businesses is they get obsessed about technological innovations and therefore they modify their ways of doing business or core competencies in order to go digital. The focus should be the other way round. They should see how their business should be operated and assess how and what digital technologies could do for their business.
Many SMEs consider costs as the major concern for digitalisation. In fact there is no lack of government grants that are available to support SMEs to start going digital. However, financing is not the only concern. SMEs may utilise the funding for acquisition of hardware and overlook the importance of software and more importantly human talents. A project champion with relevant technological expertise should be appointed to initiate and follow through the entire implementation of digitalisation and digital marketing.