1. The retail market has undergone a tremendous overhaul over the past few years…
Past decade witnessed a paradigm shift in the way Southeast Asia shops. eCommerce witnessed staggering growth. Robust growth in internet and smartphone penetration has led to rapid adoption of e-commerce in the region. More recently, the impetus on online channels for retail grew multi-fold in the wake of the Covid-19 pandemic. Categories such as grocery that usually take longer for adoption in online channels have witnessed accelerated adoption as a result of the pandemic.
SEA E-commerce Market CY15-20, $ Bn
2. …and consumers now expect a seamless experience from brands/retailers across channels
However, majority of retail market still lies with the offline channels. And learning from more evolved markets (like US and China), even when online retail reaches high penetration, offline channels would still easily account for the majority share in retail. Key demand drivers for offline channels in shopping include the touch & feel aspect, instant gratification and the engagement with the salesperson, and hence more trust that is sometimes associated with the channel.
Online platforms have been adding new features such as live streaming that allow consumers to get a close look at the product which substitutes the touch and feel the experience of offline shopping and enhances engagement.
Offline retailers are also setting up online presence through their own websites, eCommerce marketplaces and increasing digital marketing spend.
In the long term, while both channels would co-exist, true winners could be those who provide consumers an Omni Channel experience.
3. One view of the customer and One view of inventory is key to drive home the True Omni Channel experience
A true omnichannel experience would need that customer remains at the centre of all operations.
Two very important aspects of ensuring a successful omnichannel experience are –
a) One view of the customer: Customer’s interaction with the retailer across the online and offline channels is seamlessly integrated. For instance, all past purchases/orders of customers are available to the brick-and-mortar store staff which can help in improving the overall buying experience and increase chances of cross-selling
b) One view of inventory: All channels should maintain a single integrated real-time view of available inventory. For instance, endless aisles in stores can be implemented which will allow consumers to get access to products that might not be available at a particular store but might be available on the online channel or another store. This enhances the overall experience and ensures a reduction in lost sales due to unavailable inventory in a particular store.
4. …and all market participants are lining up initiatives to achieve this end goal
As the importance of an effective omnichannel strategy grows, we see many retailers adopting this approach.
Traditionally offline brands have been launching online stores while on the other hand platforms that began as pure-play online channels are opening brick-and-mortar stores.
These are early days but we expect this to be a theme to watch out for. Truly Omni Channel retailers can offer a superior experience to the end consumer in the long run.