Retailers in Singapore are increasingly turning to artificial intelligence (AI) agents to address rising operational costs and shifting consumer expectations, according to Salesforce’s latest Connected Shoppers Report. The report found that 69% of retailers in Singapore believe AI agents will be essential to maintaining a competitive edge within the next year.
As customer acquisition costs rise and purchasing behaviour fragments across multiple digital and physical platforms, retailers are feeling the strain. However, AI agents – autonomous systems that can perform tasks across business systems – are emerging as a promising solution to boost productivity, improve service, and support unified commerce strategies.
Retailers under pressure from rising costs and changing behaviour
The Salesforce report, now in its sixth edition, surveyed 8,350 global shoppers and 1,700 retail leaders, including 500 shoppers and 100 decision-makers from Singapore. It paints a challenging picture for the local retail sector, which is dealing with increasing cost pressures, inflation, and evolving consumer preferences.
In Singapore, physical store purchases are expected to decline from 43% in 2024 to 38% by 2026. At the same time, online spending is becoming more fragmented, with consumers splitting their purchases across marketplaces, brand websites, retailer platforms, and delivery apps. This shift has made the customer journey more complex, increasing the need for seamless service and operational efficiency.
To adapt, retailers are prioritising strategies like improving the productivity of store staff, enhancing customer service, and implementing unified commerce. Unified commerce, which integrates all retail functions on a single platform, allows for streamlined operations and better use of resources.
AI agents gaining traction in retail strategies
The report reveals that 85% of retailers in Singapore plan to increase their AI investment this year. AI agents are being used most extensively in marketing, where they can segment audiences, personalise messaging, and launch campaigns in real time based on shopper behaviour. By handling routine tasks, these agents free up marketers to focus on creativity and strategic planning.
Velia Carboni, CIO of SharkNinja, a Salesforce customer, said, “Agentforce, the agentic layer of the Salesforce Platform, is key to helping us build a community that keeps consumers coming back.”
Retailers are also exploring agentic AI in other departments, using it to optimise websites, manage inventory, support customer service, and train store associates. However, for these agents to work effectively, they require access to data across all retail systems.
Unified commerce improves AI effectiveness and customer experience
Unified commerce initiatives are underway at 82% of Singapore retailers, according to the report. By connecting operations across departments and platforms, retailers can deliver better service while equipping AI systems with the real-time data they need. Despite this, many retailers still operate with disconnected systems that hinder productivity.
In fact, 75% of retailers in Singapore say that inefficient technology and processes are reducing store staff productivity. From the consumer side, 61% of shoppers have abandoned purchases due to issues during the checkout process.
Brian Kealey, Area VP and Country Leader, Salesforce Singapore, said, “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.”
He added that to fully benefit from AI, retailers must embed it into a unified commerce platform to create efficient and personalised experiences across all customer touchpoints.
Consumers ready to embrace AI with caution
Singapore shoppers are already engaging with AI, with 36% using it for product discovery. Among Gen Z shoppers, that figure rises to 53%. Gen Z shoppers in Asia-Pacific are 4.7 times more likely than baby boomers to report frequent AI use during their shopping journeys.
Shoppers in Singapore have shown interest in AI agents that can help them manage loyalty points, provide quicker customer service, and deliver personalised support. Customer service was ranked as the second most important AI agent use case by Singapore consumers.
However, trust remains critical for wider adoption. Singaporean shoppers said they would be more likely to trust AI agents if certain conditions are met. These include strong data privacy and security measures, having the ability to approve purchases, transparency around data usage, easy controls to enable or disable the AI, and the availability of human customer support.
As AI becomes more embedded in retail operations, the path forward will require balancing automation with transparency, trust, and personalisation. With both businesses and consumers ready to explore AI’s potential, the next wave of retail innovation in Singapore is already underway.
