Despite uncertain outlook in the retail industry, there are some retailers who are bucking the trend and growing their business and increasing their number of stores. Gerry Lee, deputy CEO (Channels), NTUC FairPrice, shares with Lester J Wan some of NTUC FairPrice’s secrets and his views on how technology can benefit grocery and F&B retail.
It is no secret that many retailers are not doing so well in the current retail climate. Nonetheless, there are still good business opportunities for those who are willing to make positive changes to the way their business is run. One example is NTUC FairPrice. It recently announced plans to open another six FairPrice Shop stores to suit budget-conscious consumers (see page 34). Apart from repositioning stores or retargeting consumer demographics, there are still a lot of possibilities instore. Gerry Lee, deputy CEO (Channels), NTUC FairPrice, addresses Retail Asia’s questions about the retail climate and its opportunities, and shares some of the company’s methods for successful retail and business growth.
What are the retail conditions and factors that NTUC FairPrice has encountered in recent years, and what is the projected outlook for grocery and F&B retail over the next five years? Gerry Lee: The market conditions are expected to remain soft, and the general sentiment is to be cautious. The retail landscape will continue to evolve, and no business is immune to the disruptors that threaten every industry. Consumers, however, stand to benefit the most as businesses become more customer-focused and strive to remain relevant.
What do grocery and F&B retailers need to take into consideration today in terms of their retail space and operations? How does NTUC FairPrice use both human resource (HR) and technology to give shoppers a good shopping experience, as well as to improve operations processes? Lee: Some challenges for the year ahead — such as rising overheads and the labour crunch — are major concerns for all retailers. To overcome this, FairPrice will continue to look at various initiatives to streamline operations and to improve productivity through innovation and technology. Some of these can be seen in our storefront initiatives such as the Self-Checkout system and the iCash system, which enable us to streamline our operations, redesign jobs and improve productivity.
What other kinds of technology or processes have the company adopted to improve operations or the business? Lee: To boost our back-end support, we have built a new high-tech distribution centre at our headquarters in Joo Koon that includes high-tech systems such as automated stacker cranes and robotic technology to double productivity and address our growing business volume. As customer needs and demands will continue to evolve, we will need to continue to stay responsive and nimble to shoppers’ needs and wants. One of the areas we look to address is the rapidly-ageing population. We have started retrofitting our stores with senior-friendly features in addition to special discounts and priority schemes. To better understand and engage our customers, we will also be focusing our attention on data analytics to better cater to their needs. To date, FairPrice serves more than half a million customers daily through various formats spread across close to 300 stores island-wide, and we see the potential of harnessing data analytics to enable us to serve [customers] better while optimising our resources. The rapid rate of advancement and adoption of digital technology also means that omni-channel retailing is another area we need to look at. To remain relevant, we recognise the need to engage customers on multiple channels.
We have since made some headway in this aspect through various initiatives in social media, mobile app development and content marketing efforts. We recognise much more can and need to be done to provide a truly seamless shopping experience for
customers across multiple channels.
What kinds of technology are being used for better workforce or HR management? How have things improved since implementation? Lee: Some of the HR management technologies we have introduced include a global HR system from an in-house developed system with more powerful capabilities and improved reliability in compliance with employment regulations such as CPF (Central Provident Fund) and IRAS (Inland Revenue Authority of Singapore) payments, facial biometrics to streamline time-clocking processes while preventing time fraud — having evolved from card-punching to finger biometrics to now facial biometrics — and self-service applications such as e-Leave, e-Payslip and e-Claims that allow timely updates and information sharing. It is also ecofriendly as it is a paperless system.
In terms of accounting or payroll management, what do you use? How are employees’ benefits managed? Lee: We use a global HR management system for effective management of staff records, benefits and payroll. The HR system is interfaced with a time management system and facial biometric installed in all outlets and departments for time-attendance capturing. The system has enabled timely and accurate disbursement and tracking of salaries and benefits.
What other ways might NTUC FairPrice be using technology in workforce management? Lee: We will be moving to a fuller suite of integrated Human Capital Management (HCM) solutions with the strategic intention to automate even more HR functions. Some of these areas include using technology to drive talent acquisition and management, and utilising analytics for better workforce planning.
How can NTUC FairPrice make a difference in the grocery and F&B retail segment, as well as to consumers? Lee: As a retailer with a significant market share and footprint in Singapore, we believe that we can continue to not only set the benchmark and standard for the supermarket retail industry in Singapore, but also stay true to and uphold our role as a social enterprise.
We will continue to moderate food prices in view of the increasingly volatile socio-economic climate globally. Singapore imports most of its food and this makes us susceptible to global hikes in food prices, which are becoming increasingly common.
To address this, we will continue to employ strategies such as food source diversification, forward buying and contract farming, to ensure the essentials remain available and affordable for Singaporeans. Likewise, food safety considerations will continue to be of paramount importance to FairPrice, while consumers become increasingly conscious about where products are sourced from, and processes and ingredients that go into making them. Through all these, we hope to make life better for all.