EY’s Olivier Gergele highlights how retailers can navigate and thrive in today’s complex landscape and evolving consumer preferences

By implementing a sound omnichannel strategy, prioritising the consumer experience and adapting to changing trends, retailers can differentiate their value proposition.

Olivier Gergele, Asia-Pacific EY-Parthenon Consumer Leader, is a seasoned professional with extensive experience in navigating the intricate realms of consumer products and retail sectors globally, particularly across Southeast Asia. With a career spanning strategic consultancy and operational leadership, Gergele brings a wealth of insights into the strategies and initiatives that distinguish leading retailers in today's competitive marketplace.

Gergele's consultancy work extends from strategy development to large-scale transformation programmes, focussing on growth strategies, innovation, and profitability improvement. His skills lie in deciphering the nuances of consumer behaviour and translating them into actionable strategies that propel retailers toward sustainable growth and resilience.

In this interview with Gergele, we uncover insights that offer a path forward for retailers. From the seamless integration of online and offline channels to sustainability and ethical consumerism, Gergele provides a roadmap for retailers to navigate the complexities of the modern retail landscape.

What specific initiatives or strategies do you think set apart retailers that truly prioritise and cater to the evolving needs and preferences of their consumers?

Leading retailers that are in tune with changing consumer needs employ various strategies, enabled and enhanced by technologies such as artificial intelligence (AI), blockchain, and the internet of things (IoT), to better understand them. 

These retailers build a seamless shopping experience across online and offline channels, allowing customers to switch platforms with ease. Data analytics and AI tools can support their understanding of individual consumer preferences and enable these retailers to offer personalised shopping experiences.

Sustainability and ethical consumerism are increasingly shaping purchase decisions. It is hence important to incorporate sustainable and eco-friendly practices in packaging, sourcing, and operations, whilst actively supporting social causes with corporate social responsibility campaigns.

The future presents many challenges but also opportunities for retailers that can swiftly adapt their playbook to the evolving landscape whilst keeping sight of the bigger strategic picture. Retailers that prioritise these strategies are more likely to stay ahead in a competitive market and build long-term relationships with their customers.

How should retailers balance their online and offline channels to create a cohesive and personalised shopping experience for consumers, and what innovative approaches have you seen that effectively integrate both?

Retailers aiming to balance their online and offline presence need to focus on implementing a robust omnichannel strategy. This multichannel approach across mobile apps, social selling, e-commerce stores, websites, and physical stores maintains consistency across all consumer touchpoints, resulting in a more personalised and cohesive shopping experience.

An effective omnichannel strategy encompasses initiatives that span across the consumer journey, from pre-purchase to the post-purchase stages.

At the pre-purchase stage, a tailored marketing approach based on consumer preferences and shopping history can enhance product awareness. Leading retailers leverage consumer search history to tailor promotional emails; these retailers also develop functionalities to utilise consumers’ locations to send pop-up personalised notifications to entice shoppers into their stores. 

Following that, advanced digital tools can elevate the shopping experience. For instance, leading retailers integrate technology in-store to allow QR code scanning for adding of products to mobile carts and offer self-checkout options.

Post-purchase, easy returns, integrated reviews, and loyalty programmes can enhance customer retention. Leading department store chains offer comprehensive rewards programmes that are redeemable across all channels and enable in-store returns of online purchases via QR scans.

By focussing on a consistent and personalised experience across the consumer journey, retailers can successfully integrate their online and offline channels. The key is to focus on providing a seamless journey that caters to customer preferences, regardless of the channel they choose to engage with.

In light of the current economic uncertainties, how should retailers adapt their strategies to navigate downturn scenarios effectively? What key considerations do you believe will differentiate resilient retailers during challenging economic times?

It is crucial to review and reassess business strategies in the light of the prevailing economic conditions. This will entail an in-depth understanding of market trends, changes in consumer behaviour and industry developments to determine the best path forward. Retailers should also consider diversification as a risk mitigation strategy. Expanding product lines or entering new markets can provide alternative revenue streams and reduce dependency on specific sectors.

During downturns, when consumers may change their shopping behaviours, a robust consumer retention and loyalty strategy is vital. Retailers should enhance their value proposition with competitive pricing and attractive promotions. Strengthening loyalty programmes can spur repeat business, whilst cost-effective digital marketing, encompassing social media, content marketing and search engine optimisation (SEO), can boost online presence and engagement. 

Cost and cash optimisation via prudent financial management is also needed. Retailers should conduct a comprehensive review of their operational costs and identify areas where expenses can be trimmed without affecting essential functions. With this strategy, critical considerations include strategic financing options, renegotiating payment terms with suppliers and optimising cash flow to assure financial stability.

Despite the economic downturn, continued investment in training and upskilling employees is crucial to maintain a competent workforce and ensure service quality.

Resilient retailers differentiate themselves by being adaptable, customer-focussed and proactive in addressing challenges. By combining financial prudence with innovation and a commitment to customer satisfaction, retailers can navigate downturns more effectively and position themselves for long-term success.

Recognising the importance of employees, how do you believe retailers can effectively train and engage their workforce to align with the organisation's values, especially in the context of ESG commitments?

Alignment of employees with the retailer's environmental, social, and governance (ESG) commitments requires a strategic approach grounded in a well-structured and actionable framework. To start, retailers need to embed ESG values into their mission and vision. Thereafter, establish specific, quantifiable, and relevant ESG objectives that contribute to this organisational purpose. These measurable targets allow clarity and visibility of the impact of individual and collective efforts towards achieving ESG goals. The leadership's clear and consistent communication of the values and targets across the organisation is indispensable for employee alignment, engagement, and ownership.

Next, institute the right ESG capabilities, systems, and processes, and dedicate resources who can act as champions to promote a sustainable culture across the organisation. Systematically develop the knowledge and skills necessary for employees to achieve ESG commitments in their roles, invest in ESG-focussed training programmes, and establish data systems to capture metrics relevant to these commitments. 

To maintain the momentum, harness technology to govern and track ESG initiatives and analyse data and reporting metrics. Setting up robust and transparent tracking systems that periodically provide a complete report of the organisation's ESG performance can help keep the company on track. 

This approach will foster a workforce that is not just conversant with ESG principles but also intrinsically driven to uphold them, resulting in an enhanced corporate culture committed to sustainability and social responsibility.

Given the evolving consumer mindset post-pandemic, what lasting changes in consumer behaviour do you anticipate, and how should retailers adapt their strategies to meet the evolving expectations of consumers in the 'new normal'?

As we navigate the post-pandemic era, it's increasingly clear that consumer behaviour patterns have been irrevocably altered. Retailers that can adapt to these changes will thrive in the new normal. 

The digital realm has gained precedence, with many consumers browsing for products online before making their purchases. Therefore, embracing omnichannel integration and a seamless integration of online and offline retail platforms is imperative. With advanced retail solutions in demand, it will also be necessary to collaborate with e-B2B platforms to provide cutting-edge distribution solutions. 

Consumers today are willing to pay a premium for convenience, as evidenced by 53% of ASEAN consumers, according to the 13th edition of the EY Future Consumer Index (FCI). The trend is leaning towards experiential shopping, warranting more focus on creating immersive in-store experiences.

A focus on health and value will cater to changing consumer preferences, with 47% of ASEAN consumers from the abovementioned survey stating a willingness to pay a premium for health and wellness products. For consumers looking for value-for-money offerings, mindful pricing and loyalty schemes are key.

Finally, a majority of ASEAN consumers now consider sustainability important during purchases. Thus, demonstrating a clear commitment to sustainable practices and providing transparency about these initiatives is vital.

Retailers who can swiftly adapt to these evolving trends will maintain a competitive edge and meet the expectations of consumers in the new normal.

As you assess nominees for the Retail Asia Awards, could you share some specific criteria or key attributes that you consider paramount in distinguishing standout retailers?

When assessing nominees for the Retail Asia Awards, we look for retailers who exhibit several key distinguishing attributes.

We look for retailers that consistently deliver exceptional value to their shoppers, specifically in terms of product quality, customer service, and overall shopping experience.

Retailers that stand out include those that build an ecosystem by cultivating strategic and mutually beneficial partnerships, expand their innovation capacity, and enhance their offerings. They also tend to deploy creative and fresh strategies, particularly in the use of technologies like AI to enhance customer experience, improve internal efficiency, or redefine sales and marketing strategies.

Importantly, retailers that prioritise sustainable practices in their operations, offer sustainable goods and services, and exhibit the ability to adapt to change and navigate industry disruptions will excel. They demonstrate resilience in the face of changes and potential challenges by proactively anticipating and preparing for possible opportunities and threats.