E-Commerce Channels Dominant but Physical Stores are Equally Important
Woman picking up a product from shelf

E-Commerce Channels Dominant but Physical Stores are Equally Important

Analysing shopping trends before the COVID-19 pandemic can help brands and retailers understand how consumer behaviour has changed, and how to reset expectations.

E-commerce adoption and usage have been rising globally for some time, but the novel coronavirus (COVID-19) pandemic has forced all industries to embrace e-commerce platforms regardless of whether they were ready to. With most consumers forced indoors over the past two months, the outbreak will likely affect how consumers shop after lockdowns are lifted and restrictions ease. 

Importantly, COVID-19 has become an unexpected catalyst for tech adoption. According to Nielsen’s “COVID-19: Where consumers are heading?” report, 37% of consumers surveyed in Singapore say they are shopping online more often as a result of the outbreak, and three-in-four plan to maintain their online shopping levels even after shelter-in-place restrictions ease.

Nielsen Singapore Shopper Trends 2020 - e-commerce penetration

Singaporeans are no longer allowed to eat out due to Circuit Breaker restrictions since April 2020, so there has been a sharp increase in food delivery services and cooking meals at home.

Nielsen Singapore Shopper Trends 2020 - food delivery

It’s clear that e-commerce and online channels will remain dominant in the short term, but consumers in Singapore do still shop at physical stores during the pandemic.

We know that new norms have emerged as a result of COVID-19 and may be here to stay – that’s why looking at shopping trends before the outbreak can help us understand how shopping behaviour has changed since. We’ve analysed some things that brands and retailers need to keep in mind for when traffic picks up.

Singapore will remain a price-driven market

Nielsen data shows that although two-in-five consumers said they have ordered food from delivery services in the past month, 93% of consumers in Singapore ate home-cooked food at least once a week. This explains why fresh produce accounted for over half of consumers’ monthly grocery spend last year. 

Nielsen Singapore Shopper Trends 2020 - fresh grocery expenditure

We saw consumers purchasing fresh groceries for meals at home before the outbreak in 2019. Knowing the reason behind frequent shopping trips is especially relevant during the pandemic, when people flocked to supermarkets to prepare for meals and stock their pantries.

The general sentiment obtained from our Shopper Trends 2020 report is that people made their grocery shopping trips with strict budgets in mind. More than eight-in-10 shoppers perceived food prices to be increasing and that they were likely to keep rising. In response to rising food prices, 45% of shoppers bought only essentials, 22% bought less in total (a 10 percentage point increase from 2018), and 19% switched to cheaper brands (8 percentage point increase from 2018). 

Nielsen Singapore Shopper Trends 2020 - shopper strict budget

This means that consumers in Singapore were already concerned about price and their budget even before the outbreak. A look at consumer sentiment gives us some insight into this purchasing behaviour.

According to The Conference Board® Global Consumer Confidence™ Survey, in collaboration with Nielsen, Singapore’s consumer confidence from third-quarter 2019 to first-quarter 2020 remained stagnant at 89. The past few quarters foreshadowed consumers’ reduced intention to spend, and due to COVID-19, concern over the economy grew by 7% compared to the previous quarter.

More than half of shoppers went to a lot of effort to buy groceries at the lowest prices, while 48% made it a point to look at circulars and coupons. Visits to personal care stores (e.g., Watsons) and discounters (e.g., Venus Beauty) in 2019 increased, with discounters more than doubled compared to 2018. Customers shopped at personal care stores mainly for their value-for-money products, but they also appreciated the ease of finding products and their great customer service.

Understanding that Singapore’s consumers are pricing and promotion-driven is necessary for retailers and manufacturers to review and reinvent strategies. In markets where promotional reliance has become the norm, you’ll have to rethink promotional objectives and reset the depth and frequency of promotions needed to attract consumers and incremental sales. 

What’s important to customers, what value they seek and the trade offs they make have been challenged, and this provides retailers and manufacturers an opportunity to reset expectations.

It’s not surprising that consumers are less price-sensitive about fresh produce than non-food categories such as paper products, laundry detergents and infant nutrition. Certain categories may have to rely on running deals and promotions to get their stocks off the shelves, but what about brands?

Nielsen Singapore Shopper Trends 2020 - win in house brands

Since more consumers are stretching their dollars in the face of an economic downturn, most house brands have become a more compelling choice than name brands for non-food products. 

Retailers should place emphasis on house brands as more consumers are purchasing house brands, and prices of house brand products are being compared to other brands. House brands are preferred for being less expensive than name brands as they offer good value for money and can be just as good.

Nielsen Singapore Shopper Trends 2020 - house brand drivers

As brands step up their quality while maintaining its value-for-money aspect to cater to consumers, brands and products with strong quality stories may stand to gain. Delivering quality and safety assurances can be done by communicating or highlighting the steps that have been taken to ensure healthy, hygienic and safe provision of products, especially for categories more susceptible to contamination, such as fresh products.

Retailers can also consider other options apart from price reduction and promotions in the long run. A good shopping experience may impact a consumer’s decision to purchase something from the store. Apart from affordability, consumers also care how well the store is organised and how good its customer service is.

Nielsen Singapore Shopper Trends 2020 - attitudes towards grocery shopping

For example, convenience stores and petrol marts succeeded in delivering those elements. Singapore’s outstanding offline FMCG growth was driven by convenience stores, which increased by 4.7% from 2018. Apart from the obvious selling points being convenience and accessibility, convenience store shoppers appreciated its wide range of products, which included high quality premium brands, and ready-to-eat meals.

Retailers can consider leveraging innovation to drive item proliferation across offline shelves and expand online channels. Nielsen’s E-commerce Index showed how e-commerce sales achieved double digit growth in 2019, and this year, online shopping will undoubtedly continue to be an important part of the consumer’s shopping behaviour. 

Navigating an environment that has been greatly impacted by COVID-19 will be extremely challenging. E-commerce and physical stores are equally important, so with the right market intelligence and knowledge about changing consumer preferences, manufacturers and retailers have a significant opportunity to focus and prioritise efforts accordingly.


  • Nielsen Singapore Shopper Trends 2020 
  • Nielsen “COVID-19: Where consumers are heading?” survey