By Ankur Saigal, Chief Revenue Officer, Capillary Technologies
The recent onset of the COVID-19 pandemic has hit the Southeast Asian and the world’s retail markets hard. Singapore’s retail industry has been struggling, facing one of its worst years since 2013. Retail sales slid for the 11th consecutive month in December 2019. Just around the same time, the virus onset in Southeast Asia has made things even worse. During the SARS outbreak in Singapore back in 2003, retail sales fell 6.5 per cent year on year in February and 3.7 per cent in March that year. This would suggest that a sustained fall in retail sales value in the coming two months is possible. Some retailers are temporarily closing their doors to help reduce the spread of the virus; meanwhile, others are adjusting their shopping hours to give associates more time to restock and clean stores. Amidst this crisis period for Southeast Asia, retailers are crying out loud for a solution that will help them get through this pandemic, unharmed and unscathed. The question at hand is, can omnichannel technology rise to the occasion and deliver what retailers are longing for? Can retailers capitalize on the silver lining and prepare few contingency plans in an otherwise torrid few months to come?
This is the extent to which people want to avoid physical contact with other individuals and being at crowded places amidst the virus outbreak. Supermarkets have had their aisles cleared out by people who are stocking up on food essentials with a view on the coming months. Enter an opportunity for e-commerce and app engagement platforms, more and more people are making use of online platforms to make purchases as this eradicates the threat of physical contact with other individuals. Hundreds of millions of people across Southeast Asia are already shopping online, and the region enjoys some of the highest rates of e-commerce adoption in the world. Southeast Asia is home to more than 500 million people, out of which more than 47% of the people are expected to make continuous purchases on online e-commerce platforms. The recent shift in retail preferences from brick and mortar stores to e-commerce websites is only further evidence that Southeast Asia might be heading towards an e-commerce revolution.
Current state of buying pattern
According to a 2018 report from Forrester, Southeast Asia has a combined economy of $2.6 trillion and an average growth rate exceeding 5%. The retail market is worth $590 billion; this, combined with a young population and high internet and smartphone penetration, makes SEA a key target for global online retailers. A recent Nielsen report reports, that while there’s indeed a spike in the sale of healthcare and antiseptic products during the COVID-19 outbreak, there is a decline in beauty and chocolate categories. “Given the ever-changing situation with COVID-19, there is no telling when the scales will move,” the Nielsen report said.
As governments continue to impose stay at home and lockdown restrictions, shopping for non-essential items has gravely reduced. For instance, the sales of some of our crucial apparel and fashion clients are down by nearly 40-60% starting from the end of Jan. Dine-in restaurants too are suffering where few of our hospitality clients have reported that their sales are down to an all-time low. As a silver lining, for our F&B clients who have online delivery and digital engagement enabled, their sales are down by only 12-15%. Moreover, food ordering aggregators have started hitting their highest ever numbers and revenues.
These trends reinforce the fact that, whether it is about communicating stockouts or about delayed delivery or on providing additional online navigation tools, many businesses need to start planning their road to recovery with a more proactive digital engagement strategy. Digital platforms will become a paramount tool for interaction amidst these uncertain times.
Is personalized digital engagement – the contingency plan to bounce back from this crisis?
It’s currently a waiting game for all of us. We will have to showcase empathy towards the larger community and respect the restrictions imposed by our government, sooner or later the coronavirus pandemic will be over. The world will start adjusting to a new life. That’s the time that we all need to prepare for. SaaS companies are in a prime position to help retailers and brands bounce back by providing technological solutions to enhance and streamline digital platforms at a much faster pace compared to manual processes or legacy systems. Such platforms help retailers become agile in adapting to the changing needs and preferences of their end-customers. Personalized communication will become a new sustainable way of doing business earlier than others. So what are some crucial digital engagement measures that companies can consider to get back on track and improve the overall increase in transactions, basket value and repeat purchase revenues?
● Improve the quality of customer engagement across relevant channels by merging store behavior data with CRM Data to drive personalized omnichannel notifications. Integrating data across online, social and offline channels that can improve micro-segmentation of customers and send relevant and personalized offers. For instance, this data can help retailers launch event/action-based triggers that reward consumers with offers & promotions for their desired behavior
● Acquire new loyal members via social media and referral incentives by using social media loyalty and brand advocacy platforms to reach untapped audiences-For example: Create a friends & family loyalty programme where they can earn together or create a social media-based advocacy referral programme where family and friends can easily register via FB/Instagram/WhatsApp.
● Improve the post-purchase experience. For example, retailers can digitize receipts when the end-customers shop in a store – send an e-Receipt to your customers with survey form to receive relevant offers for the next purchase! In-store experience can also be improved by introducing specific event triggers such as QR code scans, Social Posts/shares, clickstream interactions, reviews & feedback incentives, etc.
● Improve mobile app features and capabilities that can optimize communication costs compared to SMS or Email. Incentivize consumers towards app interactions that help you:
● Increase app installations
● Increase orders/demand via app
● Introduce new product updates with ease
● Increase product reviews
● Improve the number newsletter subscribers and more
The situation is still unfolding, and Capillary too wants to study the market situation and respond proactively. In Malaysia and Singapore, for instance, we have stopped all marketing activities as stores are shutting down; we are doing minimal campaigns to push customers to respective brand’s online websites. We, as a business, have strictly advised against travel, client meetings and conferences. All activity is happening via teleconferencing. We are staying close to our clients and doing our best to support them during these times. These are tough times and no doubt every business will have losses to incur. However, as events unfold, we are optimistic that three months down the lane, when we are ready to get back to our healthy lives, retailers should be prepared to accelerate and scale up their digital engagement initiatives. Until then, stay indoors, practice social distancing and do your part to stop the spread of COVID-19.
