Informative & Scope

Future of Shopping

by Sehra Yeap

The merging of the analogue world and the digital one naturally changes the retail industry’s landscape. Sehra Yeap lays out a few facts for shoppers seeking the complete shopping experience. This was published in the second edition of In Focus magazine.

If the accepted wisdom is to be believed, traditional brick-and-mortar stores are considered a dying breed, and only corporate behemoths like Tesco, Walmart or Aldi will be left standing when the Great Retail Wars of the early 21st century have left a trail of destruction across the global consumer retail landscape. The same outlook says that retail has become an all-digital industry and e-commerce is set to take over completely.

The truth is much less dramatic than the headlines. Recent data suggests that up to 85 per cent of consumers still enjoy the in-store shopping experience. The general retail trend had been moving against traditional stores. The United States (US) Census Bureau reported that in the first quarter of 2016 retail sales only grew by 2.2 per cent from the previous year, while e-commerce sales have been expanding by a yearly average of 15 per cent.

Adapting Strategies
However, US brick-and-mortar sales bounced back last year with a 4.2 per cent increase, proving there’s much more to the continuing evolution of the retail sector that first meets the eye. Despite the massive shift toward online shopping, there’s undoubtedly still a place for real stores. Southeast Asia is a perfect example of how the two sectors are blending in a mutually beneficial fashion.

Traditional shops are adapting their strategies and no longer strictly rely on walk-in customers. They’ve opened virtual stores and do business via smart phone apps and desktop websites run by e-commerce retail giants like Alibaba-owned Lazada, Shopee, Zalora and many others. Online stores display their products and information, while the e-commerce provider processes orders, payments and shipping. The result is a seamless shopping experience for the customer.

Upswing Continues in 2018
2017 was pivotal for e-commerce in Southeast Asia – Google and Singapore sovereign fund Temasek reported the region’s digital economy grew to approximately USD50 billion (RM203.94 billion) by the end of the year. The upswing is continuing in 2018 as Southeast Asian consumers led the way, spending an average of 3.6 hours per day on social media, which is a key entry point to online shopping.

The numbers are impressive but the potentially complementary role of in-store shopping cannot be underestimated. Many customers still believe there is genuine value in seeing, touching and checking products in person before buying. The emotive, instant-gratification factor consumers feel with the immediate ownership of a purchased product should also not be underestimated.

Blending of Analogue and Digital
In its most successful form, the future of shopping will be a strategic blending of analogue and digital. Looking in that direction, the latest e-commerce apps are giving consumers the opportunity to scan in-store inventory, find their size or colour and pay for their purchase before taking it home. The key to this blending of analogue and digital spaces is providing consumers with a previously unheard- of combination of quality, choice and convenience across multiple platforms.

As buyers’ expectations rise with their access to more and more retail options, front running e-commerce giants are working hard to develop powerful new technologies that can give savvy and highly connected consumers the tools they need to shop easily from any device, any location and at any time.

Online Uses Offline to Succeed
E-commerce fashion giant, Pomelo, is one of several formerly online only companies that saw tremendously positive customer feedback after they incorporated a brick-and-mortar location into their overall retail strategy.

The company opened what is known as a pop-up store in Bangkok’s upmarket Siam Square. In a 20 December 2017 article in the news section of regional branding services giant, aCommerce Asia, Pomelo Fashion Co-Founder and CEO David Jou said, ‘In fashion, the number one barrier to purchase is still the need to try a product on for fit, coupled with the hassle of returns. An offline footprint addresses this barrier head on. Additionally, customers can be acquired offline and data from online can be used to drive higher sales and greater operational efficiencies offline. In short, a mix of offline and online is the optimal strategy for fashion retail going forward.’

Shoppers Can Mix and Match Devices
Complementing that kind of mixed retail operation is an exciting new concept known as ‘unified commerce’. It allows shoppers to interact with several sales and media channels at once without leaving the platform. They can compare prices, read product descriptions, check reviews and make purchases. The consumer’s preferences are kept on file as they browse through different products and suppliers.

Unified Commerce also allows customers to mix and match devices, browsing on a desktop, comparing prices on a mobile device, then visiting a brick-and-mortar location to purchase the item they have chosen. Or they can have it delivered to almost any location. Using cloud technology, Unified Commerce also allows retailers to have a 360-degree view of their operation while integrating consumers’ data for more efficient control of inventory, advertising and other costs.

Digital Free Trade Zone Established
Governments are fully aware of the importance of e-commerce trends with countries like Malaysia expecting online penetration to continue growing rapidly. The nation has 22 million currently active Internet users, a figure that’s expected to expand by nearly 25 per cent in 2018.

Seeking to stay ahead of the curve, Malaysian officials established the Digital Free Trade Zone (DFTZ) in cooperation with mega-entrepreneur Jack Ma’s e-commerce giant Alibaba. The National eCommerce Council (NeCC), made up of relevant ministries and agencies, was created to implement the roadmap towards doubling Malaysia’s e-commerce growth rate and help small and medium enterprises (SMEs) keep pace with ever-changing technologies.

Alibaba Cloud Malaysia’s country manager, Kenny Tan, during a 2018 interview with Malaysian English newspaper, New Straits Times, outlined one of the key advantages of widespread e-commerce penetration through faster delivery of information technology services, digital services in the country can now offer businesses the capabilities once only to be had by massive corporations.

National Customs as Sales Opportunities
Neighbouring Indonesia has also seen a dramatic increase in internet use by consumers and subsequently online shopping. Indonesians now spend an average of three hours and 16 minutes per day on social media, just below the regional average.

With these kinds of figures, it is a must for e-commerce players to optimise social media as a marketing channel, while taking advantage of regional and national customs as sales opportunities. For example, as one of the biggest Muslim countries in the world, Indonesia sees booming e-commerce business during Ramadan. This is just one aspect of e-commerce moving towards the next step in the evolution of the retail industry, by redefining and refining platform customisation.

Platforms for Point-of-Sale
In another example of how analogue and digital are being blended together, apps are beginning to appear that allows consumers to simply scan items in online ads and buy them rather than fill out a time-consuming form. This turns any image or text into an instant point-of-purchase.

Social media, email, websites and all other digital platforms become sales funnels. The point-scan-and-buy option also works with analogue spaces like billboards, posters and paper magazines and catalogues. In fact, any platform that can support the now ubiquitous square-shaped QR code becomes a potential point-of- sale. Smartphone scanning apps can also be used for payment, bagging and checkout at stores, along with online buying in advance and picking up in person.

With the world’s total retail sales projected to reach close to USD25 trillion in 2018 and USD28 trillion by 2020, the blending of the brick-and- mortar and e-commerce sectors is not just a convenience but a necessity in the never-ending effort to refine and improve consumer choice, convenience and the total shopping experience.


Photo by Alexandre Godreau on Unsplash

For more on the latest topics related to business, technology, finance and more, read our digital versions of In Focus magazine, issue 1, issue 2 and issue 3.

29 Jan 2019
Last modified: 29 Jan 2019
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