Through Raj raguneethan, Regional Sales Manager, Retail & Consumer Goods, Microsoft Asia
Retail has changed forever. Since the outbreak of the COVID-19 pandemic and the resulting blockages and restrictions, consumption habits have not been the same as before.
Online shopping has grown exponentially, with global online sales almost reaching the United States$ 4.29 trillion last year, 24% more than the previous year. Asia-Pacific was a big part of the pie with a 62.6% to share. In addition, Euromonitor International projects that half of the growth in absolute terms for the global retail industry from 2020 to 2025 will be digital.
While some retailers have struggled to accelerate the transition to e-commerce, we’ve seen the flip side, other retailers embrace entirely new media and platforms like video-sharing apps to engage customers in the process. digital space and increase brand affinity.
The concepts of loyalty and convenience have also been challenged like never before. Over the past year, my neighborhood supermarket has lost our family grocery shopping to ecommerce vendors and organic food websites as we shopped more online.
In fact, over 60% of consumers around the world have changed their shopping behaviors seeking more convenience and value. For example, 91% of people in India and 64% of people in South Korea have adopted new shopping behaviors since COVID-19, with more than 60% of them intend to stick to their adopted behavior.
I expect these new consumer habits to continue to shape retail in the years to come. To ride the wave of the e-commerce boom, merchants must now integrate the best digital tools and innovate in small steps.
Here are some of my thoughts on how retailers in Asia can respond to new consumer habits, thrive under difficult circumstances, and define the future of the industry.
Enable retail offers through e-commerce
Like many consumers around the world, you and I now go to physical stores much less than before. According to the Capgemini Research Institute, 59% of shoppers globally said they had high levels of interaction with physical stores before COVID-19. Today, less than a quarter see themselves in this highly interactive category. Consumers have been pushed out of their “in-store comfort zone” and expect retailers large and small to come online.
Bukalapak, one of Indonesia’s leading e-commerce platforms, has recognized this demand. It adopts cloud technologies to support more than 12 million online and offline merchants and 100 million customers through a solution that tailors consumer and merchant experiences with greater efficiency.
Brands are also realizing that with digital online experiences, they can cross channels beyond the physical and bypass middlemen to drive sales.
Peregrine Company serves customers with fuel, food and supplies across Australia. To provide greater convenience, it introduced an “On The Run” app that facilitates a “Click and Collect” experience so that customers can pay for their fuel online without entering a store. By combining Azure Stack Edge and an in-store database, Peregrine ensures customers a reliable and fast experience, while employees benefit from real-time connectivity and improved efficiency.
Retain consumers by making data a strategic asset
Even as traditional retail spaces transform to accommodate new habits, retailers will need to deliver hyper-personalized, value-added customer experiences. They might even need to rethink supply chains by tapping into timely data insights.
The popular Indian e-commerce platform, Myntra, migrated its entire data platform, including supply chain management, inventory, and website capabilities to Microsoft Azure. When the pandemic struck last year, it was able to instantly provide valuable information to partner brands on changing consumer behavior during shutdowns. Using Azure Machine Learning, it analyzes what buyers are looking for, viewing, and buying. For example, a growing number of customers, who are balancing work and household chores while staying at home, are purchasing clothing that is both functional and comfortable.
Using the power of artificial intelligence, we can provide a 360-degree view of buying behavior and retail history, allowing us to develop robust consumer profiles to easily adapt to individual needs.
Città is a small design company that creates and sells quality furniture in New Zealand and Australia. She deployed Dynamics 365 Commerce to gain a complete view of her customers and ultimately improve product recommendations. The unified platform provides its team with complete, real-time inventory data, which helps the company fill all orders and deliveries quickly, building customer confidence.
Consumer loyalty can be earned – and lost – easily in our competitive landscape. Retailers need to differentiate themselves and their offerings. It’s as easy as paying attention to consumers’ needs, along with their preferred means of purchase and engagement.
Using Microsoft Cloud for Retail, merchants and brands can better understand their customers. Disparate data sources found throughout the retail value chain are brought together and translated into actionable insights for tailored services and offerings.
Stimulate growth safely and sustainably
Asia-Pacific should represent nearly half of global consumption by 2030. But with this promise of potential growth comes two important responsibilities for e-commerce retailers: security and sustainability.
Consumer data makes retail organizations a prime target for cybercriminals. According to Dimensional Research Retail Safety Survey, 57% of organizations said the increase in distance shopping has made security more difficult. Retailers will need to invest in a secure infrastructure and engage a technology partner to facilitate centralized management of the security of different environments so that consumer experiences remain uncompromising.
ZOZO Group operates ZOZOTOWN, one of the largest fashion shopping sites in Japan. He recognized that he needed to provide employees with a convenient and secure working environment to ultimately protect the privacy of the company and its consumers. With Microsoft 365 E5, ZOZO centralizes control on a single console. This dramatically reduced the time it takes to identify any triggers that could trigger the Suspicious Activity alarm. It also allowed for a swift transition to telecommuting, with employees having a standardized work experience at home and in the office.
On the issue of sustainability, consumers are increasingly environmentally conscious and expect brands to demonstrate transparency and social responsibility.
Retail is expected to play an important role in reducing waste and greenhouse gas emissions. I am happy to see major retailers stepping in to help solve this problem on a global scale. Walmart, for its part, has committed to achieving zero emissions by 2040, and H&M is committed to using sustainably sourced or recycled materials by 2030.
I’m also happy to see the opportunity rise retailers – key by helping us to consume more sustainably — improve their offers to stay relevant. Money converters, Australia’s Largest Used Retailer, Boosts Personal Financial Services With Azure Synapse Analytics. This allows customers to shop online, get quotes for the items they sell, apply for and manage loans through its website or app. Cash Converters is now well placed to grow and contribute to sustainable consumption.
First steps towards digitization
Asia-Pacific represents approximately three quarters of global retail growth. With the region’s advanced digital maturity, it is expected to remain the industry’s growth engine in 2021.
But success for retailers means closely following the pulse of the rapidly changing habits and expectations of today’s consumers. It starts with pivoting operations and exploiting new opportunities to meet needs and preferences that continue to evolve every day.