Retailers in Singapore are turning to artificial intelligence (AI) to protect margins as customer acquisition costs rise and consumer preferences shift.
According to Salesforce’s sixth Connected Shoppers Report, 85% of retailers in the city-state say they plan to increase AI investment over the next year. They are eyeing AI agents (which can autonomously take actions across business systems) to help dynamically segment audiences, tailor messaging, and trigger campaigns based on real-time customer behaviour. Doing so will enable marketers to focus on creativity, strategy, and drive impact across channels.
Beyond marketing, retailers anticipate AI agents to aid in inventory management, frontline training and more. As such, 69% of retailers in Singapore believe AI agents will be critical to beating the competition within a year.
However, harnessing the full benefits of AI remains a challenge. Many retailers operate with fragmented systems, hampering store associate productivity (75%) and introducing friction at checkout (61%), the latter leading to abandoned purchases.
"To fully leverage AI, Singaporean retailers must integrate it within a unified commerce platform, connecting front- and back-end operations for efficiency and personalised customer experiences,” says Brian Kealey, area VP and country leader of Salesforce Singapore.
The good news is that 82% of local retailers have unified commerce initiatives underway.
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Shoppers warming to AI
Salesforce’s report also reveals that consumers are already exploring AI in their shopping journeys. In Singapore, 36% of shoppers use AI for product discovery. Among Gen Z in Asia Pacific, the use of AI for shopping is 4.7 times more frequent than among baby boomers.
Shoppers say they are open to AI agents optimising loyalty points, getting faster answers from customer service, and more. Customer service ranks as the second most preferred use case for AI agents, mirroring retailer priorities.
Still, trust remains paramount. Consumers expect AI-powered retail experiences to be underpinned by five key principles. They include data privacy and security; purchase approvals; transparency in data use; easy opt-in/opt-out controls; and access to human customer service backup.
