Rebooting retail in 2020

It's no point holding on to the past, because customer expectations have changed so much. Retail today is inextricably linked with e-commerce and the need to keep up with the latest technologies that enable differentiation. The trend is underlined by Amazon's announcement that it welcomed more people around the world for its premium Prime membership in 2019 than for any year before that.

“With today's technology advancements, consumers value instant gratification. When online shopping, they have expectations for e-commerce players to be able to instantaneously meet their needs. For example, they expect to receive their items bought online within the next few days and would tend to shy away from stores that takes a longer shipping time,” said Syatirah Safran, Buyandship Country Head in Singapore and Malaysia.

Source: ACI Worldwide.
Choo.

Leslie Choo, MD – Asia, ACI Worldwide, noted that retail is becoming more complex, and predicted a starring role for the Asia Pacific region (APAC). “Merchants around the world are under pressure from new market entrants, the breakdown of traditional industry boundaries, and growing customer preference for a digital-led or digital-influenced purchasing experience."

Go O2O

The offline-to-online (O2O) movement is growing. “Responding to these pressures, it is clear from the Culture of Innovation Index – recently launched by ACI Worldwide and Ovum – that merchants in APAC are leaning more strongly towards an omnichannel approach to retail, relative to their global counterparts. More than half of APAC merchants indicate that supporting the convergence of in-store/in-person and digital commerce was a top priority (52%) for investment in new payment-related services, compared to 42% in Europe and 43% in the Americas. Based on this, we expect to see APAC leading the way in retail convergence in the year ahead,” he said.

Source: Adyen. Hayashi.

“Online retailers need not be confined to a website. We have seen several successful online brands launch pop-up stores or expand to permanent physical stores to create a complete brand experience for their shoppers,” agreed Warren Hayashi, President, Asia Pacific, Adyen.

“One of our customers has grown from an online-only retailer to offering its shoppers loyalty programs, store credits, and click-and-collect services across online and physical presences in multiple Southeast Asia countries, truly putting its customers first.”

Hayashi added, “Likewise, the store isn’t just a place to buy goods either; it has become a space in the physical world for consumers to interact with and experience the brand.”

“2020 will be the year of integration and reconciliation. Retailers are realising that in order to achieve growth, they must take the customer experience to the next level, and minimise dollars lost to abandoned purchases. This will be done through integration of all facets of the shopping experience into one seamless journey, regardless of the channel (online, mobile, in-store) it starts on,” Hayashi predicted.

Source: commercetools.
Goetsch.

The next decade will see the continued polarisation of retail into two markets, value and premium, and the exit of midmarket players, Kelly Goetsch, Chief Product Officer at commercetools said.

“Merchants competing in the premium sector need to strongly consider investing in the right platforms that allows for easy experimentation and improvement of their systems on the fly – this allows them to speedily develop and tweak outstanding customer experiences, differentiating themselves from their competitors,” he said.

Shrinking the time-to-market window

“2020’s consumers will have no patience for sub-par online retail experiences. Brands and retailers will need to have the flexibility and ability to adjust their front-ends to changing customer expectations,” Goetsch warned.

“Instead of continuing with legacy platforms and systems which may not cope well with ever-changing front-end code, they should look to adopting headless e-commerce, whereby the back and front-ends are de-coupled. Such an approach makes it far easier and quicker for e-retailers to respond to real-time customer trends and expectations without disrupting the back-end business processes.”

True cloud computing

Retailers will also be embracing cloud more. Instead of running off virtual machines in the public cloud, they will have infrastructure that is built using APIs and microservices, which support distributed architectures, are multi-tenant, and follow other cloud-based architecture principles, Goetsch says.

Goetsch added, “API-driven microservices allow developers to easily and quickly update specific parts of the front-end, enabling shorter release cycles and faster time-to-market for new and improved customer experiences. This also allows retailers to provide a true omnichannel experiences for customers, as microservices tap on customer data and information from the back-end business processes. This enables retailers to always be ready to provide seamless retail experiences and stay one step ahead of the competition.”

Mobile-first support

Hayashi said that retailers should develop strategies that take mobile-first shoppers into account. “Irrespective of the channel being used to sell, it has to be a seamless continuation of the shopper’s journey so the buying process can proceed from any device and without drop-off. Recognising this will enable retailers to reap the biggest rewards in terms of increased foot traffic, sales and consumer loyalty,” he said.

He suggested taking advantage of the popularity of mobile commerce by:

1. Having a mobile-friendly website

2. Enabling customers to pay automatically through exiting via mobile point of sale (mPOS),

3. Supporting payment options that account for mobile banking and mobile payments

Nurture the customer experience enablers

“It used to be that back-end developers were critical to running a successful e-commerce business, but with how far front-end technology has come, the tables have turned with the front-end developers being more in demand today. With user experience now the key to retailer success in 2020, demand for front-end developers who manage what the customer experiences is higher than ever,” said Goetsch.

“However, with front-end skills evolving all the time and with the profession increasingly hard to train for, 2020 will see the widening of the front-end developer skills gap. Therefore, it is vital that retail companies see their front-end developers as keys to continued success. The expected increased demand for e-commerce front-end developers will spur brands to do all they can to attract and retain such talent.”

Retailers are listening. Safran noted that more players in the e-commerce ecosystem have been automating their operations. “For us at Buyandship, we are also looking into being fully automated in our warehouse to streamline operations and enhance efficiency,” she shared.

In 2019, the company fully-automated its two largest warehouses, including one in Hong Kong. “With Black Friday and the year-end sales season, we are ramping up efforts to be at least 60% more efficient in meeting consumer's needs compared to the same period in the previous years by automating our processes and ensuring that parcels will reach customers in time,” she added.