By the SMU Social Media Team
The far-reaching effects of the digital revolution are a fait accompli that most industries have had to address. And the retail sector has, more than any other industry, been dramatically disrupted by technological developments. Specifically, digitalisation and e-commerce have lowered the barriers to entry for new entrants into the retail fray. With the threat of new competitors and infinite product substitutes, as well as the ever-increasing bargaining power of consumers and suppliers, traditional retailers have been struggling to stay afloat.
In the face of such challenges, innovation and intellectual property (IP) might be a solution to help leverage against the wave of tech disruptions, as discussed at the recent Asia Retail Leaders Conference 2018, organised by the Singapore Management University’s (SMU) Retail Centre of Excellence (RCoE). The RCoE is a retail insight-sharing hub which aims to empower and enable both online and brick-and-mortar retailers to take on current industry challenges.
During the two-day event, Audrey Yap, Founding Partner and Managing Director of IP specialist and commercial law firm Yusarn Audrey, addressed the issue in her presentation, “The Retail Sector Under Attack – Is Innovation and Intellectual Property the Key?”
What are Innovation and IP?
She started off by defining innovation as the “execution of an idea which addresses a specific challenge and retrieves value for both the retailer and customer”, and IP as “a creature of law”, “designed to create certainty of the subject whether it’s a product, process, reputation or name, so as to give legal rights and title to the owner”.
Since survival in the retail sector now requires more investment in resources, capabilities, technology and innovation, it is more critical than ever before to invest in IP as a form of market power for companies through the creation of barriers to entry into the industry.
“The IP regime aims to stimulate innovation by allowing innovators to restrict the use of knowledge produced by imposing rewards and thus offer the possibility of returns on investment (ROI). We are the business community. We need to talk ROI,” says Ms Yap.
IP can be broken up into a number of categories, including patents, trademarks, copyrights, designs and trade secrets. To illustrate its growing importance, Ms Yap highlights a few statistics, like how trademark filings have doubled in Singapore over 10 years—from about 24,000 in 2007 to approximately 50,000 in 2017.
Harnessing the Strengths of Going Digital
“Digital is not a channel, it is a strategy itself,” she says. “Retailers are seeking to understand their share of consumer spending and how consumers search, shop and buy, in order to come up with new business models. Physical retail isn’t actually dead, boring retail is,” she adds.
Despite the negative chatter about brick and mortar stores suffering in the digital age, Ms Yap brings up the example of Walmart—the American multinational retail corporation that has been successfully reinventing itself. They are investing in innovation such as virtual reality systems, drones that offer in-store assistance, wearables that track users’ in-store actions, and even sensing technology to measure inventory.
Along with a number of other high-profile retailers, they have innovated but also protected their unique competitive advantages through complex patent portfolios. Which is why even in the context of a small business that may not have enough budget to explore IP, it should still be an important consideration.
Panelist (Left to right): Audrey Yap, Founding Partner and MD, Yusarn Audrey (Moderator); Chong Ka Wee, CEO of Kino BiotechGroup, Kinohimitsu, Kinofy; Joshua Koh, CEO, Commune Lifestyle Pte Ltd; Ryan Chioh, CEO/MD, FarEastFlora.com; and Mark Lee, CEO, Sing Lun Holdings Pte Ltd and President, Textile & Fashion Federations (Taff)
During a panel discussion that followed, Ryan Chioh, CEO and Managing Director of FarEastFlora.com shared how his company used IP as a defence strategy towards decreasing their costs.
It happened when Far East Flora realised that other flower businesses had been bidding on its company’s keywords on Google, which meant it had to pay more to have the company website and information show up each time someone looked up search terms related to the company. So after contacting the search engine giant and submitting its trademark as proof of ownership of the company name. Google then had the ability to mandate that Far East Flora’s competitors have to relinquish the keywords that were directly related to the brand.
Unfortunately, as Ms Yap pointed out, “there is no cookie-cutter approach that can be applied to every business. Each requires an IP portfolio and strategy to be customised.”
However, she adds: “Invention is worthless if you cannot translate it into consumer needs… Retailers that adapt to the changes in technology, consumer preferences, demography and the legal regimes, particularly IP, are likely to survive and prosper.”