Modern retail demands require cutting-edge technologies

Retailers recognise the need for generative AI and various data-driven e-commerce strategies to thrive in the future.

THE Retail Asia Forum 2024, held 16 May at Shangri-La Jakarta, brought together industry leaders and experts to discuss the future of retail in Indonesia and Southeast Asia. The event highlighted transformative strategies, innovative technologies, and emerging trends reshaping the retail landscape and insight from senior executives at the retail companies and thought leaders.

From the integration of generative AI, transforming retail spaces, strategies for e-commerce success, and thriving in the halal economy to the nuances of hyperlocal retailing, the forum provided a comprehensive overview of how the retail sector is evolving to meet modern demands.

The power of generative AI in retail

The keynote speaker for the forum was Tyrone Almeida, partner at Bain & Company, whose presentation was titled “Generative AI for Retail POV.” He explained that generative AI was set to revolutionise the retail industry by enhancing customer engagement through personalisation at scale.

Almeida highlighted how AI was creating paradigm shifts in search and shopping support, increasing productivity, and enabling new business models. Businesses that leveraged generative AI rapidly transformed, offering new customer experiences and staying competitive in an ever-evolving market.

The topic of generative AI was also presented by Irene Arieputri, senior solutions consultant for Indonesia at Zendesk, with the title of her presentation being “Shaping the Future of Retail: The Influential Role of AI in CX.” She spoke on the influential role of AI in customer experience (CX), focusing on how AI could create intimate and relevant interactions.

Arieputri emphasised the growing expectations for convenience driven by technological innovation such as generative AI with chatbots and the convergence of various consumer needs into a seamless experience and efficiency in operations by retailers.

Iwan Margono, EY-Parthenon Indonesia leader at PT Ernst & Young Indonesia, discussed “How Gen AI and the Three I’s Shape the Future of Retail.” Iwan said retail had historically been more than just a place to shop, which led to intimacy and created better relevance to customers.

There were also expectations of convenience conferred by innovation and rapid technological development, which achieved invisibility when consumers only saw what they wanted, he said.

“Blurring of boundaries between different areas of consumer needs offers indispensability by holistically solving a distinct area for consumer needs,” said Margono.

Technological advancements were crucial in improving retail efficiency. Andi Shanka Priyanka S., head of GoCorp Strategy at GoJek, highlighted this in her presentation titled “Innovative Approaches to Retail Efficiency: Redefining Business Operations.”

She emphasised how better visibility through real-time cost control and streamlined digital management systems optimised operations. These technologies helped companies align usage with regulations and maximise cost efficiency, ultimately enhancing productivity and performance.

Meanwhile, Kim Tae Hoon, CEO of PT Lotte Shopping Indonesia, opened up on Lotte Mart’s adaptive strategies in response to the changing retail landscape in a CEO Fireside Chat session with publisher of Retail Asia, Tim Charlton.

Kim explained some of the company’s strategies in Indonesia such as repurposing spaces, integrating technology, leveraging data, ensuring affordability, and exploring new formats and locations. “Lotte Mart aims to enhance convenience and customer experience,” he said.

Kim cited the need for the store layout to prioritise fast-moving consumer goods (FMCG), which occupied 80% of the space, up from 70%. This shift addressed the competition from smaller and online retailers, focusing on customer needs and convenience.

Retail heavyweights

“Transforming Traditional Retail Spaces” was also discussed in the Panel Discussion 1 moderated by FM Sidhartha of Trade Marketing Indonesia. It featured industry leaders Haryanto Pratantara, business and operation director at PT Kurnia Ciptamoda Gemilang and secretary general of HIPPINDO; Monish Mansukhani, CEO of Matahari Department Store; Marlo Budiman, president director of Lippo Malls Indonesia; and Richard Stanlay, CEO of K3Mart.

They explored the future of retail, emphasising a blended strategy that integrated the best aspects of physical and digital experiences. The panelists discussed shifts in consumer behavior, the rise of experiential retail, and the innovative use of technology and data to meet evolving consumer needs.

Martijn Peeters, partner at PwC South East Asia Consulting, highlighted the booming e-commerce sector in Indonesia driven by demand from 2^nd-tier and 3^rd-tier cities in his presentation titled “Embracing Data-Led Digital Transformation in Retail.”

Peeters stressed the importance of data-led innovation and digitisation in retail. Despite a strong trust in AI, Indonesians still valued human interaction when chatbots fell short, indicating the need for a balanced approach to digital transformation.

Moderated by Reynard Praharsa of MDI Training, another panel discussion included industry leaders Alfin Lie, vice president of Sales Bhinneka; Teresa Wibowo, CEO of Ruparupa (Kawan Lama Group); and Budi Primawan, vice chairperson of idEA.

Their panel session talked about rapid growth of e-commerce and the strategies necessary for success. Key insights included understanding customer needs, adapting to market changes, and leveraging technological innovations to stay competitive.

Ankit Sharma, vice president for Retail Solutions at eClerx, took on the topic, “Insights Led Strategy for Scaling Cross Border Commerce.” He outlined key strategies for the e-commerce growth pillar of success in 2024, emphasising the pillars of experience design, data-driven operations, and insights-led strategies.

Sharma stressed “the importance of mapping the customer journey, investing in operations, and continuous testing and measurement for success.”

Mark Woodley, forensic leader at Deloitte Indonesia, addressed current fraud typologies such as identity fraud and social engineering in his presentation titled “Consumer Fraud – Latest Trends and Detection Methods.”

Woodley emphasised the importance of robust fraud prevention and detection capabilities, including identity verification, transaction monitoring, and analytics, in combating these threats and the development of technologies such as Gen AI to support tackling fraud.

Roy Nicolas Mandey, chairman of the Indonesian Retail Merchants Association (APRINDO), gave his presentation on “Modern Retail Overview.” Mandey shared insights into strategies that profitable retailers were adopting, such as embracing changing consumer behaviours, pursuing market share, and creatively transforming operations. He also discussed driving data through supply chains, and prioritising ESG (Environmental, Social, and Governance) initiatives.

Dwi Hatmadji, chief operating officer at PT ABC President Indonesia, highlighted the critical roles of consumers and technology in shaping Indonesia's retail landscape. His presentation, titled “Retail Refined: Retail Personalisation and Adapting to Consumer Changes,” featured a case study of a successful campaign that leveraged personalised digital interactions to boost sales, underscoring the importance of personalisation in retail.

Hiromi Yamaguchi, research manager at Euromonitor International, identified five main themes shaping retail priorities in Southeast Asia with his presentation, titled “Digital and Beyond: Reimagining Retail Priorities in Southeast Asia.” These five themes, which he said shaped retail, were simplified shopping, new digital interfaces, experiential retail, responsible retail, and data-driven retail. These themes were crucial for retailers aiming to stay competitive and meet evolving consumer expectations.

Mochamad Arvyana Jayaprima, associate at YCP Solidiance, discussed the drivers of the halal economy, including population growth, expanding sectors beyond food, government support, and technological innovation.

Jayaprima, in his presentation titled “Beyond Compliance: How Retailers Can Thrive in the Booming Halal Economy,” showed how Indonesia, Malaysia, and Singapore were included in the top 10 countries based on GIE with the strongest scores in the food and travel sectors. He highlighted that halal products were associated with food safety and quality, offering a competitive advantage and fostering customer loyalty.

Meanwhile, the last panel discussion at the Retail Asia Forum in Jakarta was on “Hyperlocal Retailing: Catering to the Diverse Indonesian Market.”

Moderated by Juan Pisente Widjaja from Gideon Consulting Group, the panel featured leaders like Anthony McEvoy, CEO of PT Sari Coffee Indonesia; Andy Sumual, president director and CEO of FreshMart; and Fernando Repi, vice chairman of APRINDO.

They discussed hyperlocal retail strategies, the challenges of expansion, and the impact of digital technology on the retail sector. The panelists emphasised local sourcing, community engagement, and the potential for Indonesian brands to go global, addressing competition and digital infrastructure hurdles.

The Retail Asia Forum 2024 showcased the dynamic and evolving landscape of retail, highlighting innovative strategies and technologies that were shaping the future of the industry in Indonesia and beyond. As the retail sector continues to evolve, businesses must stay agile, leveraging technology and data to meet the ever-changing needs of consumers.