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asian Retail
Outlook 2021
POWERED BY
www.insideretail.asia 2021 ASIAN RETAIL OUTLOOK | 19
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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
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Outlook 2021
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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
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
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.asiaOnline 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 | 29Q.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.asiaQ.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 | 31How 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.asiabillion 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 | 33ASIAN 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.asiaIR: 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 | 35How 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.asialaunch 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 | 3738 | 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 | 39robotic 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.asiaKPMG 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 | 43ASIAN 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.asiaMost 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 | 45You can also read
