The key to unlocking the Asean store of the future

Lazada
Lazada Singapore also started a pilot program with Singapore’s largest taxi operator, ComfortDelgro 7 , to train and tap on their drivers and vehicles to deliver groceries to consumers.
SEPTEMBER 21, 2020 - 11:45 AM

2020 has proven to be a challenging year. Retailers around the world, especially in the ASEAN region, are bearing the brunt of the pandemic, with retail businesses having to cope with unprecedented demand, digitalisation, supply chain challenges and even customer behavior changes, defining a “new normal” for many.

The Covid-19 pandemic has accelerated the digital transformation journey for many businesses, with retailers in Southeast Asia prioritising digitalisation to achieve growth in a post-Covid-19 era. To ensure business continuity in such times, reports have shown that businesses have quickly embraced digital technology such as artificial intelligence (AI) capabilities and cloud adoption.

Along with this, the uptrend in online shopping is set to continue, having already begun pre-pandemic due to the convenience it presents, with essential goods, groceries, and food delivery, and even non-essential items such as computers and telecommunications equipment all readily available and accessible. Amidst the pandemic, unprecedented demand for essential goods has created substantial worldwide shortages. In Singapore alone, this demand for essential items has seen online supermarket sites exceeding orders by 300 per cent, and express delivery services’ parcel orders tripling in volume early in February.

However, the traditional retail model is far from dead. E-commerce has not made brick-and-mortar stores obsolete, contrary to what headlines would suggest.

The Zebra APAC Shopper study found that nearly 58 per cent of shoppers prefer to shop with online retailers that also have brick-and-mortar locations. Furthermore, e-commerce retailers, including digitally native stores, are often sending their customers into brick-and-mortar locations for “buy online, pick up in store” (BOPIS) transactions and online returns.

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The study reinforced these preferred methods of shopping, with 55 per cent of consumers requesting more retailers to offer mobile ordering options. Retailers have not been forced to abandon the operating principles that have sustained storefronts for many decades either. The convenience of online shopping has compelled retailers to set and strive for new customer experience, operating efficiency and inventory efficiency standards to appease 21st century shoppers who, as a result of the internet, expect instant gratification — whether in the form of information, products or services.

With an abundance of information and choice present, retaining customer loyalty is becoming more difficult. Not all purchase decisions are persuaded by low prices. Convenience – or the lack of it – can greatly influence shoppers’ transactions. The same study found that the leading reason shoppers leave a store is because of out-of-stock items, followed by pricing discrepancy with in-store and online prices. Our research also revealed that 60 per cent of shoppers believe they can find information faster on their smartphones than by asking a store associate for help.

If retailers in ASEAN want to win and retain shoppers’ loyalty today, they must modernize their stores and supply chains. Many retailers in the study cited robot assistance (83 per cent), smart check-out and real-time store IoT platforms (89 per cent) as extremely important to their operations over the next five years. In the current climate, retailers also need to think of customer safety, both in-store and delivery. That would mean adopting technology such as AI and Internet of Things (IoT), which were once ‘good to have’, but are now highly effective game changers.

However, retailers in this region might find it difficult to determine which technologies truly give them the ability to sense what is happening in their operations or in the market and analyse the reasons. Without the right technologies in place, it is nearly impossible to know how to “act” in real time to resolve issues that could negatively impact a shopper’s in-store experience, such as a misplaced item that could look like it is out of stock.

Retailers and technology solution providers all over the world are participating in concept stores or conducting in-store pilots. These programs aim to test new technologies such as radio-frequency identification (RFID) locationing systems, automation solutions and mobility platforms to learn which ones improve the in-store shopping experience for customers prior to implementing at scale.

In Australia, a local property retail investment group has rolled out an online marketplace, allowing customers to order from multiple retailers within one of its shopping centers via one transaction. In Singapore, Lazada Singapore also started a pilot program with Singapore’s largest taxi operator, ComfortDelgro, to train and tap on their drivers and vehicles to deliver groceries to consumers. 

Such pilot programs could potentially answer questions like whether track-and-trace systems will improve real-time inventory management and, specifically, replenishment actions. How effective could that same system be in helping a retailer understand which items have been tried and purchased versus those that have been left in a dressing room or put back on the shelf?

Some brands may just want to know if the investments they are making in new mobile computers at the point of sale and workflow software in stockrooms are enough to gain the intelligence they need to better serve customers. They may also require insight into the need to integrate additional layers of “intelligent” technologies, such as an IoT platform or a prescriptive analytics solution, to make those devices — and the workers using them — as smart as they need to be in today’s retail environment.

Asean retailers must move from “systems of record” to “systems of reality” if they want to sustain the success of their physical stores in a digitally empowered economy. Only those with a certain level of operational intelligence and agile execution can adapt to changing market dynamics in real time and meet customer expectations every time they walk in the store.

Technology remains the root to retail success. In fact, Zebra’s 2019 Intelligent Enterprise Index showed that 61 per cent of enterprises worldwide are on the path to becoming “intelligent”. Though many are on their way, the pandemic has quickened the pace in which retailers need to evolve their operations. This comes in the form of evolving both their online and their brick-and-mortar stores. 

As such, before revamping store operations and redefining the role of the store, retailers must conduct a proper assessment and evaluation of their business’ operational gaps and technological needs.

There is no one-size-fits-all approach. Every retailer in this region has a unique and different set of problems, and it is essential to engage with solution providers that are able to take the time to assess and address all pain points across the retailer’s entire operations, from the store-front, to the back-end and even its supply chain before recommending, implementing, refining or scaling any technology solution.

 

The writer is APAC Vertical Solutions Lead, Healthcare and Retail, at Zebra Technologies.