Retailers across Asia Pacific (APAC) were hit hard by the COVID-19 pandemic, putting a sudden halt to the impressive growth seen across the region in the years before.
And while consumer confidence continues to recover, the process is slow and somewhat precarious, with overall confidence currently remaining low. There’s no doubt in my mind that retailers are going to have it tough, even during this period of partial recovery.
In addition to the top-line impact, retailers are also experiencing significant challenges in their operating model to accommodate new ways of shopping. Retailers who managed to pivot online or beef up their online operations may have done themselves great good for the long-term, but not without short-term cost, great effort and often losses.
With all of this in mind, there are actions that merchant retailers can take to shore themselves up for the long haul, future-proofing themselves in the face of the new normal and all that may bring.
Short term focus
In the short-term, retailers need to continue stabilizing their businesses. Some of the areas that retailers need to prepare for immediately include:
1. Put safety first
Brick and mortar retailers need to start preparing for store re-openings even while their stores are partially closed. The first step is for retail leaders to ensure the health and safety of frontline store employees as they deal with the general public. They need to reset their thinking and change their business plans.
2. Turbocharge online operations
Now more than ever, retailers need to cater to online demand. They must also get better at coping with increased traffic on their ecommerce sites, higher demands on server capacity and fulfilling orders in the face of any warehouse closures or logistics and supply chain issues. As shoppers surge online, key things can be done, such as reassessing critical workflows, increasing capacity for self-service, performing site audits, or enhancing online ordering slots. Meeting online demand is vital in the short-term as the crucial driver for revenues and long-term future-proofing.
Offer additional services to keep customers engaged. For example, sports brands have been offering at-home workouts, hotel space and raising money with influencer challenges. Beauty brands have been offering at-home consultations and collating support.
Medium to longer-term focus:
The way retail operates will continue to change more rapidly than in the past. To adapt to the new normal, retailers have to reevaluate how they do business. With the consumer going more online, retailers need to pivot to a digital-led model. Retailers in APAC need to prepare for the following:
4. Values matter more
Put the customer front and center: It’s not the first time someone has said this, and it won’t be the last. The crisis has shown that customers gravitate towards brands that are empathetic and supportive of their values. Retailers will need to go back to the basics, start with what the customer expects of them, and act accordingly.
5. Reimagine omnichannel
Retailers should think of stores as an essential and increasingly prominent tool in their kit for supporting online commerce. As for contactless shopping in stores, we’ve already seen this change in APAC, and high street stores will need to incorporate this into a new approach to hygiene and safety. More broadly, retailers should regard low-touch payments as a mega-trend that doesn’t just stop at contactless or curbside delivery. In summary, carefully curated omnichannel customer journeys, a creative approach to loyalty initiatives and payment methods should never be far from mind when thinking about contactless or low-touch commerce.
6. Digital transformation imperative
The online shift is happening across the board, so there’s no time to be in denial. We have seen a significant behavioral shift towards online, and that won’t reverse. More consumers have shown that they’re comfortable shopping online, and that trend will continue to grow as retailers make online services increasingly user-friendly. For those retailers who don’t have a significant online presence, there’s a strong imperative to undergo a digital transformation and to put ‘online’ first. This means a focus on online commerce and digital marketing, supported by omnichannel services too. That doesn’t just mean creating an ecommerce site. It is essential to evaluate the viability of other channels, such as social commerce or marketplaces and digital ecosystems, and to make sure that wherever the customers are, the brand is too.
7. Rethink supply chains
Agile sourcing will become a critical criterion for success: Disruption to supply chains resulting from COVID-19 is sending shock waves through the industry and the impact is already severe. More flexibility in the supply chain and more diversified sourcing will be essential for retailers. Embedding resilience in supply chains is critical for the survival and success of APAC’s businesses.
8. Data, insights and analytics
Now is the time for retailers to invest in data-driven tech and leverage all sources of data, including payments data. Brands are shifting from data gathering to data utilization. Investing in the right technology will help retailers make the most of the insight-rich opportunities that come with this digitized new normal. To make the most of the opportunities that exist, retailers should take payments data seriously and work with their partners to collect as much of it as possible – while remaining compliant, of course. Critical to this is finding a partner who can help aggregate and enrich payments data and use it intelligently. To this end, retailers can start with descriptive analytics before embarking on the journey towards predictive analytics.
9. Embedded finance and payments
Retailers need to extend their value proposition by integrating payments and lending into the overall offering to consumers. Embedded finance is fast becoming a competitive necessity. As such, retailers must make sure they’re working with payments and lending players as digital engagement platforms and not just as payment platforms – especially the established electronic wallets. Retailers should get their payments partner to help leverage payments solutions to enhance and improve different parts of the end-to-end customer journey – whether it’s access, affordability, cash-handling, or returns.