How can retailers thrive in the omnichannel landscape?

Personalisation and consistency, amongst others, remain crucial in the omnichannel strategy.

Omnichannel is beyond ensuring presence both online and offline as to win in this competitive landscape retailers, need to have consistency across channels, offer personalisation and have a solid infrastructure and technology that will carry out their services.

Jeremy Sim, Group Chief Strategic and Transformation Officer, Erajaya Group, said one of the measures the company took is venturing into conversational commerce wherein their call centres do not only answer queries but also guide the customers’ purchase.

“When you call into our call centre to say, do you have this particular product in this particular store, instead of waiting for him to get to the store, we push a link to him or her via WhatsApp or any other means to buy,” he said at the Retail Asia Summit.

In the first three months since the company implemented conversational commerce, Sim said they saw a 25% conversation rate.

To remain consistent, brands should change the way they measure performance, and become more consumer-centric.

“We do not have sales performance measures for e-commerce. We always treat sales as another channel, but not as a revenue centre. We don’t do that at all, otherwise, you will have no harmony within any part of the country,” he said.

In terms of personalisation, consumer gathering all kinds of consumer data is important, Sim said. Beyond personal data, Erajaya also collects behaviour data, combining third-party data along with its own data.

Erajaya has gathered over 700 data points from more than 40 million anonymous users.

"At the end of the day, what we do is we try to create customer loyalty. We try to increase repeat purchases, we lower our customer churn, and we lower our acquisition costs,” Sim said.

Meanwhile, in ensuring solid infrastructure, the focus should be on people, processes and financing. In a company that recruits almost 1,000 people every month, Erajaya needs to align them with the company’s thoughts and processes.

They also invest in universities to educate their new people, amongst other initiatives, on top of ensuring having the right IT, retail, and supply chain infrastructure that will ensure that they deliver consistency and personalisation.

Digital touchpoints

Digital touchpoints where brands could be introduced to consumers should also be taken into account in business operations. In Southeast Asia, around 61% said that the marketplace is their most browsed and go-to channel followed by social media, Cheryl Ng, Country Director, Singapore, Rakuten Insights said.

Marketplace is also the most trusted digital touchpoint for product information in the region, followed by online reviews, Ng said.

The conversion rate from various digital channels, however, varies across markets. For example in Vietnam, around 80% of those who click on a sponsored or promoted product ad or link buy something following their search. This is much higher compared to the around 50% amongst Singaporeans.

Ng also noted that various factors are also considered in abandoning a purchase. Aside from bad online reviews, a site that looks like a potential scam is also a red flag for them.

“These days, even simple things like QR code marketing do not work anymore because they will know if they're going to be downloading a scanned app or a marketing,” Ng said. 

“So for digital marketers, we have to think a lot more about the way our consumers are consuming digital media, you need to take a look not just at the channel itself but what the emotional impact that they might have when they do a click,” she added.

Effective digital engagement (53.4%) is the leading trend that influences digital commerce development in Asia Pacific and is expected to unlock consumer value and loyalty in the competitive online landscape, according to a survey by Euromonitor International.

This is followed by Personalised experiences (48.9%), mobile wallets and new payment methods, and delivery and fulfilment (45.9%), Quan Yao Peh, Senior Analyst (Channels), Euromonitor International, said.

“E-commerce goes beyond just having a presence online. It's about how your presence counts for your brand to stand out for you to translate into consumer engagement, brand loyalty, and increasing sales,” Peh added.

One of the best practices in driving digital engagements is through shoppertainment such as the LazLive by Lazada.

Role of marketplaces

Marketplaces are beneficial to retailers as they provide them access to other countries. Vidmay Naini, General Manager - Global Emerging Markets, eBay added that they provide retailers with data about the type of products to sell, the price, and when to sell them, noting that in a global marketplace, there is no downtime.

“The marketplaces provide that information as well as the enablement for your businesses to run successfully,” Naini said.

Jan Gasparic, Co-founder and CEO of Fairmart, also said that marketplaces also make accessible to small and medium-sized enterprises the capability to create vouchers to retain customers, and loyalty schemes, amongst other things.

As marketplaces are available globally, Alin Dobrea, Head Of Marketing Solutions, ZALORA, said various pain points have to be addressed such as the localisation of the products, languages, location of campaigns, payment methods, and product assortment.

“Think about what are the pain points in the individual markets, because Southeast Asia is also a very complex part of the world with different geographies, different cultures, [and] different languages… You need to figure out exactly what are the pain points in your industry, and then how you're going to address those,” he said.

Dobrea added that loyalty schemes marketplaces provide beyond points or discounts are also vital, ensuring that consumers feel that “they are part of something special within the market.”

There are also internal challenges within retailers as their systems are not ready to support marketplaces, said Christian Urban, Director of Marketplace, foodpanda.

Urban said that only two of the around 50,000 outlets from multiple retailers in Asia have an idea about the real-time availability on their shelves.

“If you want to be in the omnichannel game, you have to…solve your internal problems and how do you provide a perfect infrastructure to support all these different omnichannel,” he said.

“One of the biggest challenges is that a lot of retailers are not brave enough to make the decision to support modern systems internally, do the investment, and also change their whole organization accordingly,” Urban added.

Luxury beauty segment

Another trend in the retail sector is the rise of beauty brands and Asia Pacific is the “largest, fastest-growing, and most promising region” for luxury beauty brands. However, one challenge brands may face is the region’s diversity and fragmented, Jitha Thathachari, Group Head, Business Development, Strategy & Transformation, LUXASIA Pte. Ltd. said.

Thathachari noted that there are three broad archetypes in the region, citing a Keaney analysis, which includes the mature markets which include South Korea, Japan, and Singapore, where there is “intense competition and high consumer maturity.” These markets are seeing homegrown brands having an advantage in the sector whilst major brands have established a foothold.

Meanwhile, China is a growing market but with stiff competition between international brands and popular domestic brands.

The last archetype is “The Next Gold Rush” which includes Indonesia, Philippines, Thailand, Malaysia, Vietnam, and India where disposable income is increasing, with consumers aspiring to buy luxury brands.

“Whenever any brands look at this region, or when they look at their global presence, they see this as the shining star. To win in the world, they need to win in APAC,” Thathachari said.

Local beauty brands within these markets usually belong to the masstige category, which presents an opportunity for international brands to further penetrate the luxury beauty segment.

“Southeast Asia and India are reaching the inflection point of growth in luxury beauty,” he said. “For brands, harnessing growth in SEA and India remains tricky, as the market environment is diverse and fragmented.”

Both online and offline channels are vital for luxury beauty brands but physical stores will” never be obsolete” as they comprise 85% of the sales. Online, meanwhile, holds a steady share of 15% to 50%, depending on the category.

To succeed in the region, brands should create multi-touchpoint experience hubs whilst pursuing e-commerce growth, and leverage on the rise of social commerce. Brands should also rely on data aggregation and analytics to understand consumers.

Sustainability

Consumers also expect brands to lead in addressing environmental issues, according to a survey by Mintel. In Indonesia, 92% of consumers believe the brands play a crucial role in helping with environmental concerns, followed by Thailand (75%), Singapore (71%), China (68%), and Australia (66%), Huiqi Ong, Senior Consumer Lifestyle Analyst, APAC, Mintel said.

Brands can help in educating consumers to be more sustainable as customers oftentimes do not know how to lead a more sustainable lifestyle. For example, Singapore fashion brand GINLEE Studio offers the Make O Experience which is a series of do-it-yourself workshops that help consumers turn their unused clothes and excess fabrics into bags.

However, Ong noted that cost is an issue but brands can “communicate through cost” to mitigate the problem. For example, German multinational discounted Penny launched the Wahren Kosten (true cost) campaign which increased the cost of non private-label products for a week to show their hidden environmental costs.

Brands should also partner and support local sustainable initiatives as locally-produced ingredients and packaging are less expensive than imports, and will also help the growth of local businesses.

Ong also said that brands would set “trackable” sustainability goals to make them understandable to consumers. For example, environmental non-profit group The Recycling Partnership launched an app that allows users to scan a QR code of a product to check its recyclability. Unilever also launched a 10-year Sustainable Living Plan indicating sustainability commitments and targets.

“For consumers, it's easier to be sustainable, when it's convenient for us…[M]ake it easier for consumers to lead a more sustainable life,” she said, noting providing a label on sustainable products is one way of helping consumers.

Peh noted that sustainability goes beyond the environment in the region but brands leverage technology to help improve the lives of the underserved communities.