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Asian Retail Outlook 2021 - POWERED BY - Pivot Asia
asian Retail
       Outlook 2021

                        POWERED BY

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CONTENTS
    FOREWORD
    ASIAN RETAIL OUTLOOK SURVEY
                                                                      23
                                                                      26      34
    RETAIL PROFILES
    HOW TAKASHIMAYA IS MOVING WITH                                    32
    THE TIMES
    HAPPY DAYS WITH SATURDAYS                                         34
    HOW PAVILION IS CONNECTING WITH                                   36
    CUSTOMERS
    MR DIY BETS ON AUTOMATION                                         39

    EXPERT FORECASTS                                                          47
    WELCOME TO THE NEW CUSTOMER                                       44
    EXPERIENCE
    FOUR TRENDS TO WATCH OUT FOR IN 2021                              46
    ANALYSIS: LUXURY RETAIL IN THE POST-                              47
    COVID LANDSCAPE
    BETTER TOGETHER: WHY PARTNERSHIPS                                 50
    ARE THE FUTURE OF SEA RETAIL
    THE HEART OF THE RETAIL REVOLUTION                                52
    APPROACHING ZERO                                                  55

                                                                              52
    The Asian Retail Outlook               GENERAL MANAGER
    is printed by Inside Retail Asia Ltd   Jasper Chung                    asian Retail
    HEAD OFFICE
                                           jasper@insideretail.asia
                                                                           Outlook 2021
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    Queen’s Road East, Wanchai,            Sofia Costales                  damage, arising from reliance on information in this
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                                                                           No part of this publication may be reproduced, stored
    Jo-Anne Hui-Miller                     FOR MEDIA RELEASES              in a retrieval system, or transmitted in any form, as per
    jo.anne@octomedia.com.au               news@insideretail.asia          the Australian Copyright Act 1968.

www.insideretail.asia                                                       2021 ASIAN RETAIL OUTLOOK | 21
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From the editor                                         The year that
       WHERE WERE YOU THIS TIME LAST
       Y E A R ? Do you remember what your life was
                                                               changed us all
       like back then? I can imagine many businesses           L A S T Y E A R R A D I C A L LY C H A N G E D R E TA I L , B U T
       had their noses to the grindstone, focusing on          A S T H E G L O B A L PA N D E M I C U P P E D T H E A N T E
       surviving and thriving, balanced with the health        for digital transformation, it also opened the door to growth.
       and safety of their teams. We’ve all heard the          With new standards of engagement continuing to inspire
       clichés by now, but quite frankly, I can’t think        and challenge the industry, retailers are recalibrating their
       of a better way to describe last year other than a      businesses to build on these new norms.
       rollercoaster of uncertainty, unpredictability and         Among the disruptions caused by the global pandemic
       in many ways, creativity and experimentation.           is the tremendous rise of digital, enabling customers to
          Welcome to the inaugural Asian Retail                shop on their terms. Mobile, chatbots, social, curb-side —
       Outlook, our new annual report featuring a              customers can shop anywhere and anytime, and retailers
       survey that aims to gain a snapshot of where the        are meeting them with seamless omnichannel experiences
       industry is at each year, how retail professionals      to increase loyalty and win sales.
       are feeling about the landscape and the                    Similarly, young shoppers flocked to social media for more
       challenges and opportunities presented to them.         than just inspiration; purchases from social channel referrals
       We’ll chat with industry leaders and experts as         skyrocketed by 104 per cent, and we’re just getting started.
       they reflect on the year gone by as well as their       Expect to see retailers adjust their brand strategies as young
       predictions for the future of the sector.               consumer behaviour continues to disrupt the retail industry.
          Unsurprisingly, in our first survey, we                 “Put your customers first” is fast becoming the gold
       found that more than 80 per cent of businesses          standard among retailers, with more than 54 per cent
       changed tack due to the pandemic last year,             pinning personalised journeys as the main driver for better
       while around that same amount of respondents            customer experiences. To this end, retailer marketers are
       have invested more in their digital strategies          also increasingly turning to artificial intelligence (AI) to
       lately. It will certainly be interesting to see these   deliver cutting-edge personalisation at scale, such as product
       new plans come to fruition as 2021 rolls on.            recommendations. Ultimately, since AI and trust underpin
          In so many ways, the ‘new normal’ has forced         customer experience, the responsibility falls to brands to
       the retail industry to raise the bar when it comes      follow data protection laws and tread the fine line between
       to customer engagement, digital, delivery               personalisation and privacy.
       and even bricks-and-mortar retail. Customers               Personalisation, however, isn’t the only expectation
       are savvier than ever and their demands and             customers have in today’s new normal. While value,
       expectations have changed in the past 12                convenience and availability were critical factors in 2020
       months.                                                 (going back to the toilet paper saga), they’re now table
          In our first edition of the Asian Retail Outlook,    stakes, making agility more critical than ever. In fact, those
       we analyse what the new customer experience             retailers with creative pickup options — curb-side, in-store,
       looks like in the current climate; the rise of          drive-through — saw more than 60 per cent growth over
       young Chinese consumers; how luxury retail              those that didn’t during the five days preceding Christmas
       is tracking right now and the changing role of          Day in 2020.
       physical stores.                                           Thus, although digital will remain the priority, the role
          Sit back and enjoy this year’s Outlook. Who          of bricks-and-mortar stores will transition into two forms
       knows where we’ll be this time next year?               of physical experiences — connecting digital shoppers
                                                               with products through pick-up services and creating
                                                               distinctly emotional experiences through pop-ups, brand
                                                               collaborations, and events.
                                                                  So how can retailers propel growth? By embracing change.
                                                               While the road to recovery is long, retailers across industries
                                                               can address distinct customer pain points, personalise their
                                                               customer journeys, and grow their geographic footprints.
                                                                  If 2020 is the year that changed us, perhaps 2021 can be the
                   JO-ANNE HUI-MILLER                          year that makes us.
                      Managing Editor,
                     Asian Retail Outlook                                                        THE SALESFORCE TEAM

www.insideretail.asia                                                                     2021 ASIAN RETAIL OUTLOOK | 23
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ASIAN RETAIL OUTLOOK SURVEY 2021

                       Industry insights:
                   executive voices
       It’s been a tough year for the retail industry, which has been forced to deal
         with a challenging economic climate and changing consumer behaviour.
           We check in on how retail leaders are feeling about 2021 and how the
                        industry has shifted in the past 12 months.
      THE PANDEMIC MAY HAVE HIT MORE                                             or in upper management at retail businesses (38.97
      THAN A YEAR AGO, BUT IT’S CLEAR THAT                                       per cent) and 30.88 per cent of respondents came from
      the Asian retail industry is still reeling from its impacts,               businesses with more than 1000 employees.
      particularly when we consider our peers in stricken                          All retail categories were represented in this year’s
      India right now.                                                           survey, with 18.38 per cent of respondents coming
        To gain an understanding of how the sector is                            from the fashion sector. Participants also came from
      tracking right now, Inside Retail launched the inaugural                   grocery/supermarket (15.44 per cent), pharmacy and
      Asian Retail Outlook survey in April this year. The                        cosmetics (10.29 per cent) and food and liquor (5.88
      majority of survey respondents were CEOs, owners                           per cent).

                                                  Q.1              Which Asian markets
                                                                   do you operate in?
                                                               2.94%
                                                               7.35%
                                                      15.44%

                                                                                                                      Bangladesh
                                                                          %
                                                                         .38
                                       17

                                                                                                                      Cambodia
                                       .65

                                                                       18

                                                                                                                      China
                                            %

                                                                                                                      Hong Kong
                 22                                                                    .4     7%
                       .79                                                          26                                India
                                %
                                                                                                                      Indonesia
                                                                                                                      Japan
           11.03                                                                               11.03%
                   %                                                                                                  Laos

          4.41%                                                                                                       Macau
                                                                                                                      Malaysia
                                                                                                   18.38%
           13.24%                                                                                                     Philippines
                                                                                                                      Singapore
                                                                                              10.
                                                                                                    29%               South Korea
                                                                                         2.9
                                                                                               4%                     Sri Lanka
                                   %                                                10
                            .   82                                                       .2
                                                                                              9%                      Taiwan
                       33
                                                                                                                      Thailand
                                                                        33

                                                                                                                      Vietnam
                                                     %

                                                                          .0
                                                   28.68

                                                                                                                      Other (please
                                                                            9%

                                                                                                                      specify)

                                            The top five countries represented in this survey were Singapore
                                            (33.82 per cent; the Philippines (28.68 per cent); Hong Kong (26.47
                                            per cent); Thailand (22.79 per cent) and China (18.38 per cent).

26 | ASIAN RETAIL OUTLOOK 2021                                                                                                www.insideretail.asia
Asian Retail Outlook 2021 - POWERED BY - Pivot Asia
Q.2               How would you describe trading conditions in the
                         past 12 months?
       There’s no doubt that retailers struggled in the past year, with more than
       60 per cent reporting a negative experience. Nearly 40 per cent described
       trading conditions as ‘poor’ (37.5 per cent), while 24.26 per cent claimed
       they were the worst they had ever experienced.

            5.15%                   16.18%                    16.91%                    37.50%                    24.26%
          Best I have                 Good                    Ordinary                     Poor                  Worst I have
         experienced                                                                                             experienced

   Q.3                  How did the last 12 months                                                 Significantly worse

                        compare to the previous?                                                   Slightly worse
                                                                                                   Remained about the same
   Almost 40 per cent of respondents (39.71 per cent) described the past year as
                                                                                                   Slight improvement
   being “significantly worse” than the previous 12 months, while 26.47 per cent
   claimed it was only “slightly worse”.                                                           Significant improvement

                        39.71%                                     26.47%                10.29%           16.18%          7.35%

       Q.4       In the year
                 ahead, how
                                                          Q.5       What are the three biggest
                                                                    challenges facing the retail
                                                          industry in 2021?
       do you expect trading                               Impacts of
       conditions to change?                                COVID-19      77.94%
                                                                               Rental overheads      30.88%
                                                                                                  Discounting    11.76%

                   38.87%
                                                                       Consumer confidence        36.03%
                                                                                                  Labour costs    11.03%
                                                                            Global economic factors       22.79%
         11.03%                                                                                                Taxes    2.21%
                              50.00%
                                                                                                      Staffing   11.76%
                                                                                    Work health and safety     14.71%
                                                                                Government regulation        19.12%
                    Significant changes                                                 Supply chain    25.00%
                    Slight changes                                                         Overseas competition        4.41%
                    Remain about the same

       Half of respondents predict that slight
                                                                      Lack of cross-border travel      26.47%
       changes will take place this year, while                                                            Others    5.88%
       38.97 per cent believe the conditions will
       significantly change. Meanwhile, 11.03 per         Overwhelmingly, the impacts of Covid-19 are keeping retailers up at
       cent predict they will remain the same.            night (77.94 per cent), followed by consumer confidence (36.03 per cent),
                                                          rental overheads (30.88 per cent). ►

www.insideretail.asia                                                                       2021 ASIAN RETAIL OUTLOOK | 27
Asian Retail Outlook 2021 - POWERED BY - Pivot Asia
Q.6      How has your
              revenue from
     e-commerce changed in the
                                                                   We don’t have
                                                                   e-commerce

                                                                   Increased
                                                                                                    8.09%
                                                                                                             5.88%
                                                                                                                            15.44%

     past 12 months?                                               significantly

                                                                   Increased
     As has been widely reported in the past year,
                                                                   slightly                     31.62%
     e-commerce sales skyrocketed last year and it’s
     evident in respondents’ answers. More than 70 per                                                                         38.97%
                                                                   Stayed about
     cent respondents experienced an increase in sales             the same
     online. Almost 40 per cent (38.97 per cent) claim that
     revenue “increased significantly”, while 31.62 per cent       Decreased
     experienced a slight increase in e-commerce sales.

  Q.7                What percentage of your total revenue comes from your
                     e-commerce channel?
                        27.21%
    24.26%

                                                                                                                                      17.65%
                                           15.44%
                                                               11.03%
                                                                                   1.47%                2.94%
                                                                                                        100% of                       We don’t
                                                                                   Less than            revenue
     Less than          Less than          Less than          Less than              75%                                                have
        5%                10%                25%                50%                                                                   revenue

  While online retail experienced a huge boost last year, for most retailers in the survey, it accounts for less than 10 per cent of
  sales (27.21 per cent). As restrictions lift around the world, it will be interesting to note how consumers respond to bricks-and-
  mortar retailers and which online shopping behaviours will remain in the future.

                                                                                                        WhatsApp 23.53%

     Q.8       What are
               the most
     effective social
                                                         Facebook 76.47%                                     LinkedIn 19.12%

     media channels for
     your business?                                                                                             YouTube 17.65%

     Despite the introduction of new video
     apps like TikTok, Facebook remains the
     social media giant for the retail industry,                                                                 WeChat 13.24%
     with 76.47 per cent retail businesses
     signed up on the platform. The next most
     popular platforms include Instagram (80                                                    Blog/native content on website 8.82%
     per cent); WhatsApp (23.53 per cent),
     LinkedIn (19.12 per cent) and YouTube                                                                            LINE 7.35%
     (17.65 per cent).
                                                            Instagram 58.82%                                        Twitter 6.62%

                                                                                                                    Tik Tok 5.88%

                                                                                                            We don’t use social media 5.15%

                                                                                                                   WeChat mini 3.68%
                                                                                                                   Little Red Book 2.94%
                                                                                                                         Other 2.21%
                                                                                               Zalo 0.74%; Pinterest 0.74%; Clubhouse 0.74%; Snapchat 00.00%

28 | ASIAN RETAIL OUTLOOK 2021                                                                                                www.insideretail.asia
Online delivery options                                                            38.97%

     Online delivery speed                                              44.55%

     Price                                                24.26%
                                                                                             Q.9
                                                                                             What areas
     Click-and-collect     9.56%
                                                                                             do you think
     Customer service                        18.38%                                          consumer
                                                                                             expectations
     In-store digital
     functionality       8.09%                                                               will increase the
                                                                                             most in over the
     Product quality      8.82%                                                              next 12 months?
     Product
     variety                   11.03%                                                        From kerbside pick-up to click-
                                                                                             and-collect most respondents
     Product freshness/                                                                      (38.97 per cent) believe that
     relevance                 11.76%                                                        consumers will expect more from
                                                                                             online delivery options in the
     Omnichannel                                                               33.09%        future, as well as faster delivery
                                                                                             (30.88 per cent). Meanwhile,
                                                                                             33.09 per cent of respondents
     Returns                                                                                 believe omnichannel will be the
     policy      4.41%
                                                                                             name of the game for the future
      Others                                                                                 of retail.
      (please    0.74%
      specify)

        Q.10        How helpful was your
                    government’s economic
                                                                                  Q.11     How have
                                                                                           your business
                                                                                  plans changed due to
        response to businesses impacted by                                        coronavirus?
        coronavirus?
                                                                                 35.56%

                                                                                                                      25.93%
                                             28.89%                                                21.48%
                                                                                             17.04%

                                                               37.78%

                                                                                         We pivoted the business to focus on a
                                                                                         new product/category/customer segment
                                   22.22%                                                We fast-tracked our existing plans

                                                                                         We are proceeding with our existing
                                                                                         plans as scheduled
                                   Not at all helpful        Helpful
                                                                                         We put our existing plans on hold and
                  11.11%                                                                 are sticking with the status quo
                                   Slightly helpful          Very helpful
                                                                                  More than 80 per cent of businesses
                                                                                  changed tack due to the pandemic, from
        There were mixed responses here, with 28.89 per cent of respondents       entering new categories to accelerating
        claiming that the government was not helpful at all and more than 50      their plans, but interestingly, more than 20
        per cent claiming that they were of assistance last year.                 per cent were able to continue with their
                                                                                  existing plans as scheduled. ►

www.insideretail.asia                                                                   2021 ASIAN RETAIL OUTLOOK | 29
Q.12        As a result of coronavirus,
                 have you invested more in
     your digital business?
                                                                                                      5.93%

                                                                                              13.33%

                  Yes
                  No
                  We don’t have a digital side to the business

     Unsurprisingly, an overwhelming amount of respondents (80 per cent)                                       80.74%
     identified that they had indeed begun investing more in the digital side
     of the business. From e-commerce upgrades to virtual consultations and
     livestreaming, last year most certainly saw a surge in creativity from
     retailers last year.

   Q.13                   If you have a physical store network, have you
                          consolidated it as a result of the pandemic?

    Yes - we’ve consolidated                                                                                   32.59%

  No - we’ve kept it the same                                                                         29.63%

     No - we’ve added stores                             12.59%

    No - we don’t have stores                                                             25.19%

                                          0                          10                         20                          30

  As bricks-and-mortar retailers struggle with rent and overheads in the current climate, it’s no surprise that nearly a third (32.59 per
  cent) had consolidated their physical store network last year. Interestingly, 12.59 per cent had actually opened new spaces.

     Q.14                    How do you expect leasing terms to
                             change this year?        SLIGHT
                                                                                 CHANGES

                                                SIGNIFICANT
     More than 80 per cent of
                                                  CHANGES
     respondents expect changes
     to be made to leasing terms in                                                                            REMAIN
     the future, with just under 20                                                                           ABOUT THE
     per cent predicting they will                                                 49.63%                       SAME
     remain the same.

                                                      31.11%
                                                                                                                 19.26%

30 | ASIAN RETAIL OUTLOOK 2021                                                                                       www.insideretail.asia
Q.15         Do you think
                     relationships
        between landlords and                                              20.74%
        retailers are more strained
        as a result of coronavirus?                                                                              Yes
        Almost 80 per cent of respondents believe that                                                           No
        landlords and retailers will struggle to maintain
        an amicable relationship. It will be interesting                               79.26%
        to see which parties will come up with creative
        solutions in the near future, taking into account
        changing consumer behaviour around bricks-
        and-mortar retail and the rise of omnichannel.

   Q.16                  Have you negotiated a change
                         to turnover-based rents?

                                   57.78%                                                   42.22%

       Given the challenging economic climate, just over half of retailers have come        Yes                No
       to a compromise with landlords, negotiating rents based on turnover.

                           11.11%                                  Significantly more

                          31.85%                                   Slightly more
                                                                                           Q.17
                                                                                           Were
                                                                                           landlords
                                                                                           willing to
                                                                                           reduce rents
                                                                                           this year?
                                                                   Remained                Nearly a third of retail
                                                                                           professionals (31.85 per
                           26.67%                                  about the               cent) found that landlords
                                                                   same                    were slightly more willing
                                                                                           to reduce rents given the
                                                                                           impact of Covid, while 26.67
                                                                                           per cent continued paying
                                                                                           the same amount this year.
                                                                                           Meanwhile, almost 20 per
                          15.56%                                   Slightly less           cent found that landlords
                                                                                           were actually less willing to
                                                                                           reduce rents.
                           4.44%                                   Significantly less
                                                                   We don’t
                          10.37%                                   have stores

www.insideretail.asia                                                                  2021 ASIAN RETAIL OUTLOOK | 31
How Takashimaya is
                       moving with the times
     Japanese department store Takashimaya is nearly two centuries old. Here’s
          how the retailer is adapting to stay relevant in 2021 and beyond.
                                                          BY JOYCE ABAÑO

     FROM USING NON-TOXIC                        mindsets towards longer-term goals,”    and introducing sustainability-
     PAINT IN STORE TO DIGITISING                the spokesperson added. “In the long    focused programs in its stores.
     documents to avoid paper waste,             run, being sustainable will actually      According to Takashimaya, even
     more businesses are taking steps to         be more beneficial for retailers to     before the global health crisis,
     make their physical operations more         attract and retain more customers and   businesses around the world were
     sustainable.                                reduce expenses.”                       seeking to become more sustainable,
       This includes the Japanese                                                        but the pandemic moved them to act
     department store chain Takashimaya.         THE JOURNEY TO                          on those plans.
     While its bold approach to sustainable      SUSTAINABILITY                            “The crisis has got people
     store design entails high upfront           Takashimaya opened its first store in   rethinking what is truly important,
     costs, it will lead to long-term benefits   Kyoto, Japan, in 1831, selling gofuku   beyond profits and more about what
     in the future.                              (formal kimono). It started expanding   kind of roles they want to play in this
       “Other than playing an active             in the early 1930s and is now one       new normal,” the spokesperson said.
     role in reducing our environmental          of the largest department store           One area in which retailers can take
     footprint, sustainable store design         operators in Asia, with a presence      the lead is through eco-friendly store
     will increase the brand’s credibility       in China, Thailand, Vietnam and         design. Here’s what businesses need
     in the eyes of the modern, mindful          Singapore.                              to do, according to Takashimaya:
     consumer and also saves money in the          Since launching in Singapore on
     long-term with lesser consumption
     of energy and waste,” a Takashimaya
     spokesperson said.
                                                 the famous Orchard Road in 1993,
                                                 Takashimaya has grown to offer more
                                                 than 240 brands, including Jurlique,
                                                                                         1  Start by switching to
                                                                                            sustainable packaging and
                                                                                         bagging alternatives
       “Change always comes with a price,        Pigeon, Seafolly, Adidas and Speedo.    The global sustainable plastic
     but change is inevitable as we need         For the past few years, it has been     packaging market is projected to
     to move with the times and shift our        promoting a greener retail experience   grow by 5.6 per cent, from US$89

32 | ASIAN RETAIL OUTLOOK 2021                                                                                  www.insideretail.asia
billion in 2020 to US$117.3 billion      energy sources                           spokesperson said.
       by 2025, according to a study from       According to Dodge Data &
       Research and Markets.                    Analytics’ World Green Building Trends   THE #SHOPGREENER CAMPAIGN
         The study also indicated that the      2018 report, having a green building     Takashimaya plans to increase its
       Asia Pacific region would account for    has officially become a global trend     ‘phygital’ (technology that bridges
       the largest share in the sustainable     with energy conservation a top           the digital and physical worlds)
       packaging market in terms of value       priority. The report indicated that      offering in 2021 as it looks to engage
       and volume between 2020 and 2025.        the trend is expected to grow in the     online shoppers and work with more
                                                coming years. In fact, the share of      sustainable brands.

      2     Choose sustainable building
            materials, such as paint,
       lights and appliances
                                                firms that have more than 60 per cent
                                                of their projects certified green has
                                                grown from 16 per cent to 45 per cent.
                                                                                           Just last month, Takashimaya
                                                                                         Singapore introduced its
                                                                                         #ShopGreener campaign to
       As demand for sustainable products                                                encourage consumers and brand
       continues to grow in every sector, the
       construction industry has also started
       developing more innovative and
                                                4     Digitise and reduce
                                                      paper wastage from daily
                                                operations
                                                                                         owners to be more eco-conscious.
                                                                                           As part of the campaign, shoppers
                                                                                         can trade in used bottles, jars and
       green materials.                         Paper accounts for 25 per cent of        tubes from beauty brands such as
          Retailers trying to reduce their      waste in landfill and 33 per cent        Jurlique (among others) to receive
       environmental impact should              of municipal waste, according to         discounts and freebies.
       use non-VOC (volatile organic            technology company Timico. About           “The department store is
       compounds) or low-VOC paint, also        68 million trees are cut down each       constantly evolving with diversifying
       called green paint. VOCs, which are      year to produce paper and paper          values and changes in consumer
       released at room temperature, are        products.                                environment and needs, and has over
       not only harmful to humans; they           Businesses can avoid this by           the years realised the importance of
       also play a significant role in the      digitising their operations, such as     reducing environmental impact and
       formation of ozone. While naturally      using email receipts. Takashimaya        promoting a sustainable future,” the
       occurring ozone in the atmosphere is     has reduced its paper use by about 50    Takashimaya spokesperson said.
       good for the planet, the type of ozone   per cent since embracing digital.          “We are looking forward to
       created by VOCs remains at ground          “There will be more retailers          providing a platform for more eco-
       level and harms plant production.        changing their strategies across         green and sustainable brands to step
                                                all fronts — brands have been            out in the spotlight and provide

      3    Reduce your power usage
           and switch to alternative
                                                sourcing for more upcycled or
                                                sustainable materials,” the company’s
                                                                                         better, more mindful options for our
                                                                                         shoppers."

www.insideretail.asia                                                                      2021 ASIAN RETAIL OUTLOOK | 33
ASIAN RETAIL OUTLOOK

                Happy days with Saturdays
          Indonesian direct-to-consumer brand Saturdays is on a mission to
       transform the eyewear retail experience. We chat with co-founder Rama
       Suparta about the brand’s omnichannel strategy and its new mobile app
                                 and try-on service.

                                                INTERVIEW BY JO-ANNE HUI-MILLER

     Inside Retail: How would you
     describe the traditional way
     customers have had to buy
     eyewear, and how has Saturdays
     helped change that experience?
     Rama Suparta: The traditional way
     of shopping for eyewear is not fun
     and it’s expensive:

     1. The optical stores typically
        display many glasses under a
        counter, and the store itself is
        filled with ads and signage with
        white, displeasing ambience;
     2. Customers cannot try on glasses
        freely as they require staff to help;
     3. Glasses carried are from Western
        brands, with the majority not
        designed for Asians;
     4. Pricing is not transparent and
        simple. Usually, lens choices
        are confusing and not included
        in frame prices, plus complex
        promos are designed to make
        customers spend more, not save;
     5. The processing time to install
        lenses can take three to five days
        and require customers to come
        back to pick them up;
     6. Minimal return policies or              with their loved ones, exercise,       the customer experience, such as
        warranties.                             sleep and be themselves. We want       our own stores, website, app, chat
                                                to create a lasting impression from    and home try-on. While we are
       Saturdays redefined the offline          online and offline channels through    inspired by the US-based unicorn
     shopping experience with glasses           lifestyle stores concept by offering   and eyewear brand Warby Parker,
     displayed in a modern cafe.                Arabica coffee and fresh-baked         the need to localise our products and
     Customers only need to wait 30             cookies in a modern cafe setting       experience is a must. We provide
     minutes for lens installation, and we      where people can hang out and          fresh and unique ways to shop for
     offer free customers coffee while they     feel like it’s Saturday any day of     eyewear:
     wait.                                      the week. We also provide special
                                                food and beverage promos to            • Our stores blend eyewear in a
     IR: Tell me about how you’re               #CitizensOfSaturdays — people            modern cafe. We operate eight
     blending Saturdays’ stores with            who wear our glasses — so they can       stores in Jakarta and plan to
     cafes and why they’re called               bring their loved ones and hang out      expand to more Indonesian cities;
     lifestyle stores.                          at our store.                          • Our home try-on service offers
     RS: We aspire to provide an                                                         an in-store experience but in the
     unmatched experience for customers         IR: How would you describe               convenience of the customer’s
     who have been accustomed to                Saturdays’ omnichannel                   home;
     shopping for eyewear in dull and           strategy?                              • Our customers also engage with
     conventional manners. Saturday is          RS: Saturdays’ tech-enabled              us through chat to help purchase,
     the favourite day of the week for          omnichannel strategy focuses on          assist in home try-on bookings,
     most people as they spend time             channels where we can better control     and answer any questions.

34 | ASIAN RETAIL OUTLOOK 2021                                                                               www.insideretail.asia
IR: Tell me about the new mobile            current eyewear market and               for the local market. We aim to be
       app and the new home try-on                 the competitive landscape?               the dominant eyewear brand in
       service.                                    Traditionally, it’s been                 Indonesia, and the one customers
       RS: Saturdays has been leading the          monopolised by a few large               continue to shop at again and again.
       direct-to-consumer (DTC) revolution         companies, but in recent
       in Indonesia since introducing its          years, DTC brands have begun             IR: Last year, Saturdays received
       eyewear in 2016. Our new mobile app         competing with them.                     some investment. Can you tell
       is the first of its kind in our industry,   RS: The eyewear market is dominated      me about your plans for the
       and it provides an integrated online-       by a single global company that has      extra funding?
       to-offline (O2O) shopping experience        been able to keep prices unreasonably    RS: In 2020, Saturdays received
       for customers. The app showcases            high and earn huge profits from          early-stage funding from local and
       our full collections, so customers          customers. A few large optical players   regional venture capital firms Alpha
       can shop, save frames to a wishlist,        in Indonesia mainly distribute brands    JWC Ventures, Kinesys Group and
       try them on virtually, purchase with        from this company, leaving customers     AltoPartners to accelerate expansion
       multiple payment options (including         with few options. Saturdays is the       and strengthen our tech-enabled
       buy now pay later), and pick up             first brand in Indonesia to offer        omnichannel experience.
       in-store.                                   premium quality yet affordable
          Saturdays also pioneered the home        eyewear designed in-house to fit and     IR: What are your plans for
       try-on service across Indonesia,            look great for Asian features. We use    Saturdays this year? Do you have
       and we provide a seamless booking           the best materials, such as Italian      any plans in the works for local
       experience through the app.                 acetate and Japanese titanium, to        and international expansion?
       Customers can pick 10 frames of their       craft eyewear that is authentic and      RS: Saturdays aims to elevate the
       choice to try, book an appointment          affordable (starting at Rp1.295.000      eyewear game further and bring
       and select a speciality coffee, all for     including prescription lenses).          an integrated and seamless O2O
       free! Our licensed opticians will              The DTC eyewear market is still       shopping experience to Indonesian
       bring the frames and administer a           nascent and highly fragmented in         customers. We will add more exciting
       vision test from the comfort of the         Indonesia. We see that no-one else       features to our app in the coming
       customers’ own home.                        offers the same mix of omnichannel       months while also expanding our
                                                   experience and premium quality           lifestyle stores concept to more
       IR: How would you describe the              yet affordable eyewear designed          Indonesian cities.

www.insideretail.asia                                                                         2021 ASIAN RETAIL OUTLOOK | 35
How Pavilion is connecting
                   with customers
       The retail industry in Malaysia has struggled during Covid, but shopping
        centre Pavilion in Kuala Lumpur has continued to find a way to reach
       consumers. Here, we chat with CEO of retail, Dato’ Joyce Yap, about the
                         evolution and exciting future of malls.
                                               INTERVIEW BY JO-ANNE HUI-MILLER

     Inside Retail: Mwwalaysian                (MCO) last June. Footfall at Pavilion     IR: How would you describe
     retail has been reported to be            KL reached as high as 75-80 per           2020 for Pavilion last year,
     at an all-time low. What are              cent while sales recovered to about       and what were some of the
     your thoughts on how the retail           50-60 per cent. In December, the          interesting ways that the
     landscape is travelling at the            sales and visitors at Pavilion KL shot    business pivoted? What were
     moment?                                   up, where footfall traffic went up        some of the initiatives that you
     Joyce Yap: The last year was              by almost 90 per cent, from the first     launched last year that have
     challenging for the whole Malaysian       MCO lows of 20-30 per cent. Sales         continued into this year?
     retail industry. Likewise, Pavilion KL    followed a similar trend, increasing      JY: Twenty-twenty was a challenging
     has not been spared from the impact       60-70 per cent from a low of about 20     year for Pavilion Kuala Lumpur, and
     of the pandemic. I am cautiously          per cent.                                 while we had to navigate a variety
     optimistic that the retail sector is         It’s encouraging to observe similar    of new challenges that came with the
     heading towards recovery this year,       trends in countries like China, where     pandemic, it has also been a year that
     and we are already starting to see        trends such as “revenge shopping”         pushed us to innovate and be creative
     some positive indicators. Hopefully       are aiding the country’s speedy           in order to adapt to this new retail
     the pandemic will be brought under        economic recovery. In fact, China saw     landscape.
     control and we will not see another       its economy strengthen in November          Despite the challenging retail
     lockdown.                                 2020, with retail sales expanding by      landscape during the MCO last year,
       From a big-picture view, previous       five per cent.                            our occupancy rate has remained
     trends have shown that in the                Hopefully, as vaccines roll out        stable. In fact, we even welcomed
     aftermath of major crises like — the      across Southeast Asia, and the            more than 48 new tenants to Pavilion
     1997 Asian financial crisis and the       eventual relaxation of the MCO, will      KL, including first-in-Malaysia outlets
     2007 global financial crisis — the        set the retail industry firmly on the     from prestige brands like % Arabica
     retail industry tends to rebound. We      path to recovery and growth. We           from Japan, Kam’s Roast from
     hope this is an indication of things to   look forward to footfall in the malls     Hong Kong, Objects, and Harriston
     come.                                     returning to pre-pandemic levels,         Chocolatier Cafe. We are expecting
       We saw this play out on a smaller       and are excited to welcome shoppers       several more openings in the coming
     scale at Pavilion KL during the           to Pavilion Bukit Jalil, which opens at   months, including the first Dadi
     Recovery Movement Control Order           the end of the year.                      Cinema in Malaysia, which is set to

36 | ASIAN RETAIL OUTLOOK 2021                                                                                  www.insideretail.asia
launch later this year.                  and accessible. The next generation of        Pavilion Bukit Jalil — The Icon of
          However, we recognise that several    personalisation will enable retailers       Connectivity — is set to transform
       tenants were adversely affected last     to target both known and anonymous          the southern corridor of Kuala
       year, especially during the first MCO    visitors in a cross-device and cross-       Lumpur into the new cornerstone
       when only 35 per cent of our tenant      channel shopping environment.               of metropolitan lifestyle and retail.
       mix were permitted to operate. To                                                    Pavilion Bukit Jalil is an example
       help ease the burden of tenants who      IR: What are your thoughts on               of how a shopping mall targets the
       were severely impacted, we offered       the future of shopping centres in           residential catchment area attached
       rental rebates. At the same time, we     Malaysia and what are some of               to the mall by featuring a multi-
       facilitated cost-saving practices such   the challenges and opportunities            dimensional shopping experience,
       as flexi operating hours to tenants in   for the sector?                             with a diverse and vibrant tenant
       need to help cut down their expenses.    JY: We are already seeing a radical         mix made up of specialty retail,
       We are practising cost cutting           move towards an omni-channel                gastronomic F&B, leisure and
       exercises internally to save costs       retail experience, with more retailers      entertainment.
       wherever we can.                         moving from online to physical                Strategically located on a gross
          We have continuously worked with      stores. Retailers need to embrace           area of 3.48 million square feet in
       all our tenants to come up with robust   the omni-channel approach and               the heart of Bukit Jalil, this hyper-
       marketing strategies to encourage        see the rise of e-commerce as a             regional mall is well connected with
       customer traffic and spending,           complementary source of growth              excellent accessibility. Its well-
       including creating promotional areas     rather than competition. Embracing          planned infrastructure, easy access
       at high traffic areas, assisting with    digital technologies and services is        points to more than 5000 car park
       shopping and dining vouchers, and        not a disruption, but provides an           bays, coupled with an attractive mall
       continuing with our shopper rewards      additional channel for branding,            facade, provides exposure from afar,
       and redemption programs.                 reaching a wider base of consumers          giving tremendous advertising value
                                                and increasing footfall.                    and brand visibility.
       IR: When the MCO took place                 It is clear that consumers don’t limit     Like Pavilion KL, Pavilion Bukit
       in Malaysia, what was that               themselves to a single channel, and         Jalil goes beyond retail. With a
       experience like for Pavilion and         therefore neither should we. If we          net lettable area of 1.8 million
       what were the trends that you            don’t embrace the emerging trends           sqft, Pavilion Bukit Jalil connects
       observed?                                model, we risk our own long-term            communities through immersive
       JY: The pandemic has brought             success. Retailers that solely rely on      experiences and leisure. Its
       on unprecedented challenges for          traditional outreach formats must           impressive outdoor venue, Pavilion
       retailers. It is the survival of the     adapt or get buried as the industry         Bukit Jalil Piazza, which is covered
       fittest and those with diversified       constantly reshapes and redefines           with a 35-metre-high canopy, will
       business models were best equipped       consumer expectations.                      be the preferred venue for outdoor
       to pivot to the fast-changing retail        I believe the future of shopping         entertainments, concerts, and events.
       environment, and adapt to evolving       is also a hyper-personalised and            Additionally, Pavilion’s grand annual
       consumer behaviour — putting             experiential customer experience,           festivities and year-long activities will
       them in a better position to survive     powered by the hybrid model                 take place at the Centre Court, while
       and grow during the pandemic.            of online and offline shopping.             consumer fairs and exhibitions will
          Many tenants have realised the        This means stores providing and             thrive at the Exhibition Centre.
       benefits of using multiple channels      recommending what the customer                With five retail floors, Pavilion
       to reach out to their customers and      needs, when they need it, with the          Bukit Jalil will be anchored by the
       offer an omni-channel experience.        power of data and AI. It also means         newest Parkson departmental store
       Businesses that offer customers both     having a unique in-store experience         in Malaysia. Other specialty anchors
       physical and online store options tend   with optimised store layouts, mall          include the biggest Dadi Cinema in
       to see higher customer engagement        facilities, customer service and of         Malaysia; first-of-its-kind concept
       and sales.                               course, safety measures.                    supermarket The Food Merchant,
                                                                                            by the team behind Village Grocer;
       IR: How would you describe               IR: What do you think makes                 Harvey Norman Superstore; Blue Ice
       Malaysian customers’ current             an excellent shopping centre                Snow Park, featuring aurora lights
       lifestyles and shopping                  experience in this day and age?             that simulate the Northern Lights for
       behaviours, and how is Pavilion          JY: An excellent shopping centre            a unique night skating experience for
       catering to that?                        experience is not only about creating       families; karaoke and entertainment
       JY: Consumers and their needs have       happy memories for shoppers but it          outlet K11 Karaoke; Grand Harbour
       rapidly evolved in the past year. The    also matches the customer’s desires         restaurant; and kids’ store Toys R Us.
       demand for personalised customer         and wants. It encompasses research,           Unique to this mall will be the
       experiences has increased. In order      referrals, price points, variety,           planned Asian-themed precincts
       to fulfil customer demands and win       environment and budgets. Pavilion           offering retail, food, arts and culture
       their hearts, we, as retailers, need     KL achieves this by hosting unique          from Japan, Thailand, China, Korea
       to understand and cater to their         events such as Kuala Lumpur Fashion         and Malaysia. They will seamlessly
       changing behaviour and trends.           Week, which has a planned digital           connect shoppers to each country
          For 2021, I see personalisation       presence and builds into the shopping       through its diverse retail mix and
       and customer insight-related             mall, transforming into a giant             functional layout, providing an
       technologies making the biggest          fashion runway with breathtaking            elevated and interactive retail
       impact as they become more robust        decorations.                                experience for shoppers.

www.insideretail.asia                                                                         2021 ASIAN RETAIL OUTLOOK | 37
38 | ASIAN RETAIL OUTLOOK 2021   www.insideretail.asia
Mr DIY bets
                                        on automation
        Malaysian home improvement brand Mr DIY has turned to automation to
        take the business to the next level, having recently opened a RM5 million
       robotic e-commerce warehouse. Mr DIY Group vice president of marketing,
         Andy Chin, shares how staff have embraced automation and how these
          technologies are improving the shopping experience for customers.
                                                          BY JOYCE ABAÑO

       Inside Retail: How do these               using technologies such as sensors for   importantly, user-friendly for our staff.
       programmable robots work                  anti-collision features and QR codes,
       and how have they increased               that serve as an indicator for their     IR: How has technology helped
       operational efficiency?                   directions. We also have a dedicated     your company adapt to the
       Andy Chin: Our programmable               Robotic Management System (RMS),         new normal without causing
       robots have increased operational         that is tailored to our operation        frustratons for customers and
       efficiency significantly by 200 per       requirements, to help us determine the   staff?
       cent. Traditionally, stock picking is     optimum route from point A to point      AC: Our aim was to solve the order
       done manually and we rely heavily         B, using smart logic. The RMS gathers    fluctuation issues, to survive and
       on labour manpower. There was a           data from daily operations and with      thrive in the new normal. We only
       limitation of quantity as we could        the use of Big Data Analytics, we        have one e-commerce warehouse
       only fulfill nine orders at a time. By    can review and optimise operations       fulfilling orders nationwide. Hence, it
       automating the stock picking process,     further.                                 is taxing for the warehouse operations
       28 orders can be fulfilled at a time         The main problem we wanted            team when there is a drastic increase
       without the presence of a manual          to solve using technology was            in orders. We decided to implement
       stock picker. It significantly saves      manpower issues, as we realised          robotic technology in this warehouse,
       the time and effort required by a         that our staff ended up spending         because this is the most dynamic
       warehouse staff in order fulfillment      a lot of time and effort to conduct      warehouse with high order fluctuation
       as well. In addition, the robotic         repetitive tasks that can be             to ensure that our online customers
       system minimises human errors such        automated. We wanted to find the         get their orders fulfilled in time.
       as picking the wrong item from the        simplest way to solve the fulfillment       We have invested our efforts in
       wrong rack. After implementing            bottleneck, especially during peak       training and upskilling our staff, to
       this technology, in total, 1500 to 2000   seasons. Ultimately, we decided          ensure they are equipped with the
       orders can be fulfilled in a day.         on implementing a technology             right skill sets in anticipation of the
         The programmable robots operate         that is scalable, flexible, and most     new industrial revolution. Here in the

www.insideretail.asia                                                                       2021 ASIAN RETAIL OUTLOOK | 39
robotic warehouse, we have trained
     our warehouse staff in first level
     troubleshooting knowledge to ensure
     they have the right problem-solving
     skills when any component of the
     automated process isn’t working as
     planned.
       For example, Liza, one of our
     warehouse staff, was one of the
     success stories of the Mr DIY robotic
     warehouse. She was interested in
     warehouse management, and started
     her journey with us as an assistant
     supervisor for Mr DIY’s marketplace
     in 2017, assisting with online order
     fulfilments. As we designed our
     robotic warehouse, we saw an
     opportunity to upskill Liza to manage
     the robotic warehouse system. Today,
     she has learned the skills required
     to manage the robotic warehouse
     system, and has been promoted
     to be the supervisor of our robotic
     warehouse.
       Our employees have been, and will
     always be, our most valuable asset.
     Eight-five per cent of our workforce
     consists of Malaysians. We want to        our customers’ experience at Mr DIY      come in via our e-commerce platform,
     lead the way for other Malaysian          as a whole?’. On our e-commerce          hence investment in this warehouse
     businesses, showing that investment       platform, you’ll be able to purchase     is timely and warranted to prepare
     in Industry 4.0 is not only necessary     products that can be found in our        ourselves for this.
     to thrive in the future, but also         brick-and-mortar stores, as well            Mr DIY serves a mass market
     contributes towards nation-building       as bulkier items that are difficult      with a wide range of customers.
     for a better Malaysia.                    to display in store. This robotic        We also recently launched Mr DIY
                                               warehouse has also enabled us to also    for Business, a B2B platform for
     IR: How did the business perform          increase our online product offerings    businesses to make bulk purchases
     online and in stores with all the         by 23 per cent, from 16,400 to over      directly from us, with less hassle.
     challenges that 2020 presented?           20,000 SKUs.                             This makes our e-commerce platform
     AC: As a group, Mr DIY owns and                                                    the perfect channel for SMEs to
     operates over 700 stores in Malaysia,     IR: How pivotal has technology           purchase essential items with a
     serving everyone in the country.          been to the success of the               wholesale discount on top of our
     Although foot traffic dropped during      company this year?                       competitive prices. We have over
     the beginning of the pandemic, due        AC: Technology has been playing          1200 SKUs ranging from cleaning
     to restrictions of movement and the       an important role. We are now            tools, hardware, electrical items, to
     temporary closure of many retail          heavily investing into e-commerce        face masks, hand sanitisers, and even
     stores, we managed to overcome this       and adopting new technologies,           stationery.
     by strengthening our online presence.     in order to increase operational
     Foot traffic has now rebounded and is     efficiency further. Given the current    IR: What expansion plans in the
     stronger than ever.                       circumstances due to the pandemic        pipeline for 2021 and beyond?
        Brick and mortar is our core, and is   and overall transformation of the        AC: We just launched our 700th Mr
     what we’re very good at. Before the       retail environment, we believe           DIY store in Malaysia in March, and
     first MCO, our sales came primarily       that investing in automation and         debuted a ‘store-in-store’ concept
     from our retail stores. Now, online       upskilling our employees will be         with one of the brands within our
     purchasing has surged naturally           beneficial to us in the years to come,   portfolio, Mr Toy, housed within the
     and is continuing to grow steadily,       to breakthrough and serve more           same premise. In 2021, we plan to
     as many customers have become             customers better.                        open 175 new stores across our three
     accustomed to online shopping. Our                                                 brands - Mr DIY, Mr Toy and Mr
     2020 online sales saw a 300 per cent      IR: Are there any e-commerce,            Dollar.
     increase, compared to the previous        social commerce or consumer                Digitalisation and automation
     corresponding period.                     trends that the company is               are very much part of our business
        When we first embarked on our          interested in right now?                 strategies, and will be implemented
     online e-commerce platform, mrdiy.        AC: Given that e-commerce has            as and when it brings the most
     com.my in 2017, our aim was to create     boomed exponentially since 2020, we      benefit to our business. We have
     an omnichannel retail experience.         observed that there are high demands     plans to automate the entire packing,
     We asked ourselves, ‘How can we           and a high potential for growth in       downstream, and picking process in
     use e-commerce as a tool to enhance       this area. We expect more orders to      the near future.

40 | ASIAN RETAIL OUTLOOK 2021                                                                                 www.insideretail.asia
KPMG

www.insideretail.asia          2021 ASIAN RETAIL OUTLOOK | 41
42 | ASIAN RETAIL OUTLOOK 2021   www.insideretail.asia
ADVERTORIAL

       What’s next for
       Hong Kong retail?
       By Angelica Leung, Head of Consumer
       Products, Invest Hong Kong

       It is time to take a fresh look at Hong   “Hong Kong is a beacon for Japanese          where new ideas are welcomed and
       Kong as life starts to return to normal   manufacturers, and we regard the city        startups thrive
       and retailers rethink expansion           to be a considerable facilitator of new      Hong Kong’s startup ecosystem stands
       strategies - Hong Kong has always         investments or ventures from Japan.”         out in Asia for its dynamism and
       provided a high-functioning and                                                        government support, and overseas
       sophisticated ecosystem for businesses    Exponential e-commerce growth                companies looking to invest or expand
       looking to build a presence in Asia and   A combination of sophisticated               in the region come to Hong Kong for
       this decade will be no different.         logistics infrastructure with high digital   its trusted legal system and business-
                                                 adoption has laid the bedrock for            friendly environment.
       Hong Kong remains very strategic          exponential e-commerce growth in                “In Hong Kong there is a vibrant
       for Mainland China market                 Hong Kong. E-commerce companies              entrepreneurial environment to start
       Hong Kong is part of the Guangdong-       are also making use of Hong Kong             a company, and the administration is
       Hong Kong-Macao Greater Bay Area          to expand their Greater China and            relatively easy. People are also easy
       (GBA) together with nine Mainland         overseas footprint.                          going and open to new ideas,” says
       cities plus Macao. Contributing about       JD.com utilises Hong Kong as its hub       Delphine Dultzin, Co-founder & CEO
       11% to China’s economic output,           to bring the “product supply chain +         of OnTheList. Peter Yen, Co-founder
       this area has an economic output of       logistics supply chain” ecosystem to         and CEO of Pinkoi agrees, “Hong Kong
       US$1.68 trillion in 2019 (higher than     Greater China and overseas markets.          is a gateway to many Asian markets
       South Korea, Spain or Australia) which    Chris Choi, GM of JD Global Sales of         — it has a diverse consumer base and
       is expected to reach US$4.6 trillion by   JD International explains, “JD Hong          enables us to keep pace with the latest
       2030.                                     Kong’s unrivalled geographical location      global developments.”
          With 72 million people living in an    and sophisticated transport and
       area of 56,000 square kilometres          logistics network has enabled a lot of       Where opportunities connect
       (0.7% of the size of Australia) and       business opportunities.”                     InvestHK’s vision is to strengthen
       ever-improving connectivity, this           Shopee sees Hong Kong a strategic          Hong Kong’s status as the leading
       burgeoning consumer demand is set         location for its status as Asia’s            international business location in
       to strengthen Hong Kong’s status as an    eCommerce hub. “Hong Kong has                Asia. The mission of the department
       international retail hub.                 sophisticated logistic infrastructure        is to attract and retain foreign direct
                                                 that supports our supply chain               investment which is of strategic
       Local consumption remaining robust        operation, allowing us to build              importance to the economic
       For Hong Kong’s 7.5 million residents,    better services for our cross-border         development of Hong Kong.
       shopping neighbourhoods and               eCommerce,” says Jianghong Liu,                 InvestHK has been providing
       shopping malls provide an important       Head of Cross Border of Shopee.              support and advice to companies at
       curated mix of retail, entertainment,       Meanwhile, Vestiaire Collective is         different stages of their businesses,
       food and beverage and educational         using Hong Kong as a hub to targeting        and our services are offered free of
       brands.                                   both sellers and buyers in Hong Kong         charge. Drop us an email to
         One of the retailers which enjoyed      and across Asia. “Hong Kong is a great       cp@investhk.gov.hk and we look
       growth by focusing on Hong Kong           middle ground, very multi-cultural,          forward to helping you grow!
       local consumers is DON DON DONKI.         lots of mixed influences and plenty of
       Mitsuyoshi Takeuchi, President            fashion lovers!” says Fanny Moizant,
       & Director of Pan Pacific Retail          Co-founder of Vestiaire Collective.
       Management (Hong Kong) Co., the
       operator of DON DON DONKI, says,          Vibrant startup ecosystem: A city

www.insideretail.asia                                                                            2021 ASIAN RETAIL OUTLOOK | 43
ASIAN RETAIL OUTLOOK
                            Welcome to the new
                            customer experience
             The ‘new normal’ now requires a reimagining of how e-commerce
                      and bricks-and-mortar work together in retail.
                                                         BY SALESFORCE

     IN TODAY’S NEW NORMAL, THE
     SHOPPING EXPERIENCE IS NO
     longer defined by the boundaries
     of bricks-and-mortar, but by the
     customer journey as a whole.
       While building trust along that
     journey has always been critical, it’s
     becoming ever more time-sensitive.
     Consumers now expect retailers
     to engage them whenever and
     wherever they want, with a shopping
     experience tailored to their individual
     needs. To do so, marketers are
     leveraging more data, technologies,
     and channels to create this type of
     relevant and customised customer
     journey.
       As digital-first shopping is here
     to stay, retailers must invest in
     connected experiences — and
     success hinges on frictionless
     operations.

     1   Creating cohesive customer
         experiences
     Today’s consumers expect more
                                               with only about half saying their
                                               goals are aligned.
                                                                                         automate answers to questions such
                                                                                         as “Where’s my order?”
                                                 And consumers can feel it. Only 13         This is generally well-received
     than just personalised experiences.       per cent believe that companies excel     by younger consumers, including
     More than 67 per cent attribute a         at delivering connected experiences.      millennials and gen Z-ers, 68 per cent
     contextualised, connected customer          To close this gap, 44 per cent of       of whom say they prefer personalised
     journey as being a key to winning         retail and consumer goods marketers       shopping experiences that are
     their business.                           say they are now leading customer         based on their purchase history. In
       This is particularly relevant in the    experience initiatives across their       addition to driving engagement for
     retail world, where technology is         organisations (versus just 24 per cent    retailers, AI-powered personalisation
     blurring the physical-digital divide      in 2017), and metrics are being shared.   is also a revenue generator, since
     and disrupting how consumers shop         Sales effectiveness and customer          online shoppers who act on product
     from pick-up-in-store programs to         retention rates — historically            recommendations yield 14 per cent
     cashier-less stores, mobile payments      considered success indicators for sales   higher average order values.
     and digital wallet services.              and services teams — have reached            However, as data protection laws
       The result is mounting pressure         the top tier of marketing KPIs,           like GDPR expand universally,
     for retailers to deliver hyper-           underscoring the evolution of cross-      retailers are understandably
     personalised, concierge-like shopping     department collaboration to enhance       concerned with how to move
     experiences with efficient handoffs       the customer journey.                     forward. Many have invested time
     between departments and channels                                                    and money into curating consumer
     before, during, and after a purchase.
       While 88 per cent of retail
     marketers share integrated tech
                                               2   Building trust in AI-powered
                                                   personalisation
                                               In an era when opaque data-use
                                                                                         data and building systems to offer
                                                                                         personalised experiences. On top of
                                                                                         that, another rising privacy concern
     stacks with advertising teams, this       policies have jeopardised customer        revolves around how retailers are
     alignment alone is not enough.            trust, retailers are increasingly         obtaining and using location data
     A unified front has to span the           cognisant of balancing AI-powered         from customer’s smartphones to
     entire customer journey. However,         personalisation with privacy.             direct advertising strategies.
     collaboration between retail                In retail, AI use cases range              Retailers must delicately navigate
     marketers and their commerce and          from personalised product                 the flow of personal information,
     service counterparts is less common,      recommendations to chatbots that          with 89 per cent of consumers

44 | ASIAN RETAIL OUTLOOK 2021                                                                                  www.insideretail.asia
Most common tech used for
                                                                                              customer identity purposes

                                                                                              1. Customer relationship
                                                                                                 management (CRM) syste,
                                                                                              2. Marketing database
                                                                                              3. Customer data platform (CDP)
                                                                                              4. Data management platform
                                                                                                 (DMP)
                                                                                              5. Email service provider (ESP)

                                                                                            (DMPs) are gaining traction,
                                                                                            however, broadening the use of this
                                                                                            technology beyond its traditional
                                                                                            use case of media buying and
                                                                                            optimisation. Fifty-five per cent of
                                                                                            marketers currently use DMPs with
                                                                                            an additional 35 per cent planning to
                                                                                            use them within the next two years.
                                                                                               This is unsurprising given the
                                                                                            number of high-traffic systems that
                                                                                            retail companies must manage,
                                                                                            such as loyalty, point-of-sale, and
       valuing transparency in how their
       data is used as a trust factor.           4     Driving real-time
                                                       omnichannel engagement
                                                 To win sales and increase loyalty,
                                                                                            commerce infrastructure.
                                                                                               To understand who customers
                                                                                            are and what actions to take based

      3     Revolutionising loyalty
            programs
       In the past year, existing loyalty
                                                 retail and consumer goods marketers
                                                 are engaging consumers in the real-
                                                 time, omnichannel manner that they
                                                                                            on their unique needs, retailers are
                                                                                            increasingly using second-party data
                                                                                            — that which is shared between
       programs were put to the test by novel    expect.                                    consenting parties like brands and
       customer behaviours and expectations        The gold standard is dynamic,            publishers — to extend audiences
       brought by the pandemic. While            two-way conversations between              and refine growth targeting.
       online shopping skyrocketed global        customers and brands, where                   As we enter the post-Covid world,
       digital revenues — by 71 per cent in      messages evolve across channels            retailers are responding with agility
       Q2 2020 compared to the previous year     based on the customer’s actions.           and resilience to navigate dramatic
       — consumers are now more willing          This gives consumers a consistent          shifts in consumer preferences,
       to change brands based on value,          experience regardless of their             channels and behaviours. By
       availability and convenience.             point of communication when                adapting to these predominant
         Loyalty programs have                   interacting with a brand. Successful       trends with customer- and digital-
       traditionally been transaction-           omnichannel engagement is easier           first strategies, retailers can
       focused and impersonal; customers         said than done, however, as average        overcome challenges and build trust
       earn points, redeem rewards, and          consumers use 10 different channels        in the new normal of retail.
       the cycle repeats. Customer loyalty       to communicate with brands.                   Want even more valuable,
       today, however, is extremely granular       To this end, retail marketers are        actionable insights? Download
       across all touchpoints. Generally,        turning to established channels, such      the latest State of Sales Report on
       customers and brands engage in a          as websites, email and social media,       how sales teams around the world
       value exchange, whereby the former        and dynamically coordinating them          are adapting to recover and grow
       agrees to share their information for     with emerging channels, such as            during a pivotal time — and how
       personalised incentives catered to        virtual assistants, augmented reality,     you can too.
       their preferences.                        and connected devices.
         In this regard, retailers are             With 68 per cent of consumers
       re-evaluating and revolutionising         saying cross-channel consistency is        Salesforce is the world’s number one
       their value propositions for higher       vital to win their business, the ability   customer relationship management
       customer retention. Loyalty initiatives   to engage shoppers where they              platform, bringing customers and
       are being embedded across the entire      are — no matter the channel — is           companies together and AI to everyone.
       supply chain, from the frontline staff    increasingly critical.                     As one integrated CRM, Salesforce
       who bring loyalty programs forward                                                   gives all your departments a single,
       to the merchandising teams that select
       products as part of a promotion.
         In this digital age, customised
                                                 5    Unifying customer data
                                                      Today, retailers have more data
                                                 at their disposal than ever before.
                                                                                            shared view of every customer.
                                                                                            Visit: salesforce.com.
                                                                                              All data cited in this article was
       experiences — from free shipping          However, they are challenged with          generated by Salesforce surveys and
       and sneak-peek product previews           unifying that data from an average of      market research of recognised industry
       to personalised promotions and            16 sources, a 60 per cent increase in      professionals. This information is publicly
       individualised incentives — all boost     just two years.                            available on our website and in our
       customer loyalty.                           Data management platforms Most           various market and industry reports.

www.insideretail.asia                                                                          2021 ASIAN RETAIL OUTLOOK | 45
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