With digital trade further accelerating in Southeast Asia, Singapore’s geographical advantage primes it to be the region’s e-commerce hub. The country’s revenue in the e-commerce market is projected to reach over US$7 billion this year, and the number of users is expected to amount to 4.1 million by 2022 as well, according to Deloitte.
On top of this, simplified COVID-19 measures and major easing rules have also contributed to brick-and-mortar sales. Retail sales increased 12.1 per cent in April year on year, largely attributable to higher tourist spending, and this positive trend is expected to continue as Singapore moves closer to normalcy.
As local retail industries, both online and offline, experience exponential growth, the storage sector must also evolve to support this trend. Beyond conventional storage spaces, there is much potential for the industry to cater to these growing businesses through capitalising on shared synergies between storage and retail.
The need for end-to-end storage solutions
As Singapore’s retail markets grow, so too do the demands of such businesses. Larger stock inventories would require more space, and busy entrepreneurs are seeking holistic, end-to-end solutions that cater to their logistics needs.
These demands largely lie in order fulfilment, where business owners discover inadequacies in last-mile delivery services, especially with the surge in demand. From their warehouses and storage spaces, these businesses often have to source a separate supply chain logistics provider to handle their delivery.
A third-party provider may sometimes cause more problems than it solves, due to inflexibility, service quality, logistical hassle and more. Furthermore, it adds another layer of cost and administrative work.
Additionally, e-commerce businesses find themselves without a conducive all-in-one space for daily storage cum logistical operations. Such tasks include packing, dispatching/receiving, stock-taking, and even photo-taking or live streaming for sales and marketing purposes.
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Renting a separate studio or workspace eventually incurs additional cost and more travel time, challenges that busy entrepreneurs face as they establish their business.
What a one-stop storage solution looks like
Noting these pain points, there is the need for industry players within each part of the supply chain to successfully identify gaps which they can plug. With storage playing a huge role in end-to-end logistics, particularly for businesses within the retail industry, storage providers should look to introduce value-added services that can help make daily work processes even more seamless for businesses.
These can come in the form of onsite facilities that complement and optimise their customers’ operations, such as order fulfilment areas for packing, invoicing and stock taking, pick-up and return points for goods, and breakout areas for work discussions, photography and live streaming studios, and more.
Once they have established the support that they can provide to businesses for necessary day-to-day operations, storage providers should also look to extend in-house delivery services or collaborate with a delivery partner to achieve a suite of end-to-end offerings.
Another example of such services would be warehouse logistics, where businesses can outsource their logistics management responsibilities to the storage space. Business owners need not worry about warehouse storage and manpower issues, as the end-to-end warehouse management service would be handled externally, be it receiving of shipment, warehouse management, order processing, packing of orders or delivery dispatch.
This is particularly helpful for businesses when stock volume increases, and order numbers get overwhelming. These entrepreneurs can then concentrate on generating sales while leaving the time-consuming tasks of warehouse management to the storage provider.
Through these holistic, value-added facilities and services, the aim is for storage spaces to play an even more integral role in the supply chain and effectively morph into a one-stop integrated solution not only for storage but for overall business and extended operational needs.
The larger role of storage in supporting Singapore’s booming retail economy
E-commerce will continue to increase in popularity even after the pandemic. As many have discovered the slew of benefits that the digital economy brings, consumer behaviour and expectations have changed. As such, the market must constantly answer and anticipate these evolving needs.
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While physical retailers are currently experiencing a bounce-back in sale figures, many have also seen the advantages of e-commerce and increasingly embraced it. In fact, many have switched to a fully digital presence.
With modernisation setting the perfect environment for business growth, the number of e-retail businesses in Singapore is set to rise, and they will need even more cost-effective options to store goods and fulfil orders as they pit themselves against their competitors.
In meeting these industry trends, the self-storage industry is set to flourish at an even quicker pace, projected at a 6.3 per cent CAGR for the forecast period of 2021 to 2026. Currently, there are more than 30 operators across 80 facilities island-wide, up from less than 10 operators just five years ago.
The self-storage market must continue pivoting and adapting its services to meet these changing needs, such as the implementation of holistic services while integrating more technology within their facilities to provide users with increased efficiencies.
With the industry growing alongside the e-commerce market share, the need for a physical space for storage, along with the full suite of value-added services will become a norm. In the future, storage spaces will eventually evolve into dispatch centres.
With Singapore’s plans to become a leading e-commerce hub in Asia, buoyed by government incentives and policies, the environment for e-commerce is ripe and set to thrive, with innovative storage solutions as its catalyst.
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