Commentary

Retail sector has much to learn from Amazon, Ikea

I was amazed, almost in shock, when a friend bought all the furniture for her new home from Taobao e-marketplace last year.

That is, until I did something similar this year for my new place.

Before going on this eye-opening online journey, I had made several trips to regular, brick-and-mortar furniture stores.

I had to check them out first as I prefer to deal with physical stores, especially for big-ticket items.

This fastidious shopper, who would not want to miss even a loose thread on a shirt, wants to be sure of what she is getting and that there is recourse if the quality of the goods is not up to par.

I had in the past furnished my first home with everything from Ikea - from the ceiling lamps to sofa, dining table and bedframes - and I was a satisfied customer.

These days, online retailers have also upped the ante on quality and customer service.


E-retailers are a force to reckon with, with Amazon's upcoming launch in Singapore. PHOTO: REUTERS

For instance, I was pleasantly surprised when an e-tailer called me and offered a full refund for a bookshelf I paid for, saying it had received many complaints about the quality of the bookshelf and that it no longer wished to sell the item.

Following the confidence boost, I tried out online furniture start-ups such as Nook and Cranny, Castlery and Ni-Night for bookshelves, sofa, bedframes and more.

The items have yet to be delivered so I am still anxious about their quality.

At least, these online stores have been promptly replying to all the questions I've bombarded them with delivery dates and the colour of light bulbs, among others. Some of them even responded to my messages via WhatsApp.

The rise of online shopping is a challenge for traditional retailers. And some of them do need to work on their online strategy if they want to stay ahead of the curve.

For instance, websites have to be easy to browse and should display a full catalogue, complete with payment and delivery options.

My recent encounter with a retailer should not be the norm. I spotted a bookshelf I like on the website of a brick-and-mortar retailer, but I could not find an option to buy it online.

So I sent an e-mail to the retailer and asked if I could close the deal online.

The reply?

"Regret that this is not an online item. Please visit our showroom to make the purchase."

Having an online strategy is probably the best ammunition traditional retailers can have in trying times - when sales are falling and rents are rising.

Some brick-and-mortar retailers have successfully integrated the their offline and online shops.

One example is Ikea and, even then, its physical stores at Tampines and Alexandra Road are still packed with a healthy crowd.

This just shows that online browsing cannot, for many customers, substitute the experience of getting to see in person and getting a real feel of items they hope to buy.

Still, other retailers have found it tough. John Little, which has been in Singapore for 174 years, is closing its last department store here by the end of next month.

In the third quarter of the year, Singapore also registered the highest mall vacancy rate - at 8.4 per cent - since 2011, when the Urban Redevelopment Authority began tracking this figure.

As the saying "if you can't beat them, join them" goes, retailers can learn a lesson or two from the world's largest e-tailer Amazon, which has set its sights on Singapore. It has plans to launch here next year.

It's unclear whether the e-tailer will sell in Singapore everything that it offers in the United States - books, movies, music, games, electronics, toys, apparel, sports and groceries.

But the powerful search function on its website allows shoppers to find anything they want easily.

Amazon has also developed a powerful algorithm that recommends goods to online shoppers - although this may be hard to copy.

Amazon's best practices in returns, goods tracking and shipping can also be followed by the retail industry.

Hopefully some of these best practices would filter down.

It can only inspire more to innovate and do better on customer service.

A version of this article appeared in the print edition of The Straits Times on November 09, 2016, with the headline 'Retail sector has much to learn from Amazon, Ikea'. Print Edition | Subscribe