As profit margins shrink, 85% of retailers in Singapore plan to increase AI investments this year
SINGAPORE – Retailers are feeling pressure as costs mount, customer expectations rise, and technology gets increasingly complex, according to a new report from Salesforce. At the same time, AI agents, a type of artificial intelligence (AI) that can autonomously take action across business systems, offer a path forward. In fact, three out of four retailers (69%) in Singapore believe AI agents will be vital for beating the competition within a year.
Salesforce’s sixth Connected Shoppers Report, based on dual surveys of 8,350 shoppers and 1,700 retail industry decision-makers – including 500 shoppers and 100 decision-makers from Singapore –underscores the increasing importance of agentic AI in the retail sector. The report also highlights how retailers can navigate changing consumer preferences amid increasing fragmentation.
Retailers face pressure from all sides
Rising customer acquisition costs are squeezing retailers’ margins as they also navigate inflation, competition, and consumers’ evolving behaviors and preferences.
Additionally, the increasing complexity of the shopper journey due to shifting behaviour patterns is adding another layer of pressure. While physical stores remain vital, their purchase share is declining in Singapore — from 43% in 2024 to a projected 38% by 2026. Digital spending is fragmenting across a constellation of marketplaces, retailer websites, brand sites, and delivery apps, rather than consolidating into a single channel.
To efficiently serve customers across vast and expanding touchpoints, retailers’ top strategies are to improve the productivity of their store associates, improve the quality of customer service, and implement unified commerce – a concept Salesforce champions as a way to drive revenue without adding operational costs.
Retailers see AI agents as a way forward
Retailers are deepening their commitment to AI, with 85% of retailers in Singapore saying they’re increasing investment over the next year. As adoption continues, marketing emerges as retail’s top agent use case. Here, agents can dynamically segment audiences, tailor messaging, and trigger campaigns based on real-time customer behavior—offloading repetitive tasks so marketers can focus on creativity, strategy, and driving impact across channels.
Velia Carboni, CIO of Salesforce customer SharkNinja, described Agentforce, the agentic layer of the Salesforce Platform, as “key to helping us build a community that keeps consumers coming back.”
Beyond customer service, retailers anticipate agents to extend across many other tasks and departments — from optimising websites and marketing campaigns to training store associates and managing inventory.
Unified commerce boosts AI capabilities
AI agents need access to data across retail systems to work effectively. With better, more unified data, agents can provide more personalised and real-time responses. However, many retailers’ systems are disconnected, creating challenges for employees and shoppers alike.
- 75% of retailers in Singapore say inefficient processes and technology drain store associate productivity.
- Meanwhile, 61% of shoppers in Singapore have abandoned purchases due to friction in the ordering process.
Fortunately, 82% of retailers in Singapore have unified commerce initiatives underway. By connecting cross-channel and cross-departmental operations on a single platform, unified commerce improves efficiency and shopper experience — and helps power AI.
“Retailers in Singapore grapple with high rental costs, persistent labour shortages, and increasing customer expectations. Agentforce offers retailers an opportunity to reach new levels of productivity by supporting time-intensive tasks such as responding to customer queries, modifying orders, issuing returns and managing inventory without human intervention,” said Brian Kealey, Area VP and Country Leader, Salesforce Singapore. “To fully leverage AI, Singaporean retailers must integrate it within a unified commerce platform, connecting front- and back-end operations for efficiency and personalized customer experiences.”
Shoppers show readiness for the AI era
The retail transformation isn’t one-sided. Consumers are already exploring AI in their shopping journeys, with 36% of shoppers in Singapore — and 53% of Gen Z — using AI for product discovery. Gen Z shoppers in APAC are 4.7x more likely than baby boomers to say they frequently use AI this way.
For AI agents specifically, shoppers in Singapore show a strong willingness to use AI agents to optimise loyalty points, get faster answers from customer service, and more. Shoppers in Singapore rank customer service as their second top AI agent use case, aligning with retailers’ priorities.
For shoppers to embrace AI agents making decisions on their behalf, trust is essential. When asked what would increase their trust in agents, shoppers in Singapore ranked these factors highest:
- Data privacy and security protections
- Require approval before any purchase
- Transparency over how data is used
- Ability to easily turn off/on
- Available human customer service backup
As retailers in Singapore turn to AI agents to stay competitive amid rising costs, the message from shoppers is clear: trust, transparency, and control matter more than ever. With consumers and businesses ready to embrace AI, we can expect more opportunities for secure and intelligent experiences that build deeper loyalty and drive substantial growth in this new AI era.
More information:
- Read the full Connected Shoppers Report
- Learn more about Salesforce Retail Cloud
Methodology
Data in this report is from two double-anonymous surveys conducted November 27 through December 26, 2024. The surveys generated responses from 8,350 shoppers and 1,700 retail industry decision-makers across 21 countries in North America, Latin America, Asia-Pacific, and Europe. For more demographic information, please refer to the full “Connected Shoppers” report.
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