Future of retailing - innovations for hearts and wallets
THE FIRST two quarters of this year saw Thailand's retailing performance plunge severely on factors such as continuing political uncertainty and recession. Even though the economic outlook does not bode well for consumer confidence and investors alike, th
A study on Thai millennials by IPG Mediabrands found that 50 per cent of them had their incomes reduced while 28 per cent lost their jobs. Smaller portions of goods are being bought and consumers are looking for whatever deals they can get to maximise their hard-earned cash – or lack thereof.
We’re talking mainly about the middle- to lower-economic classes, but they are the ones driving the economy forward. Charlie Chaplin once said, “Nothing is permanent in this world, not even our troubles,” So optimistically speaking, the only way for the Thai economy now is up.
There is absolutely no correlation between reduced wallet sizes and shopping sophistication. Consumers’ shopping mindsets are changing exponentially. Urbanisation and the apparent discerning lifestyle will have major implications for how we shop in the future, and innovation will take centre stage as the main driver of this change.
lRetail convenience: The ever-demanding consumer will seek even more convenience than before. I am confident that readers of this article have had to wait a long time when queueing up at a checkout counter at a supermarket at least once in their lifetimes. I believe that in the not-too-distant future, “checkout-less stores” will revolutionise how payments are made, allowing shoppers to use their smartphones to scan and pay for items as they add them to their basket, and leave whenever ready, bypassing queues.
lEffective big data: We’ve heard it all before. Previously, retailers could only analyse data based on what shoppers actually purchased at point of sale. If you are smart enough to provide them with free Wi-Fi, you can actually track their shopping behaviour throughout their decision-making journey via smartphones through Wi-Fi or BLE (Bluetooth low energy). This empowers retailers to analyse what shoppers are interested in but do not actually purchase, so as to make adjustments to pricing and merchandising strategy.
lStation stores: For the time-pressed urbanite whose shopping behaviour is more inclined towards micro-shopping, the concept of mass-transit-station grocery stores could manifest itself soon. Consumers will be able to pick up the main essentials that are needed to sustain a hectic lifestyle as they exit their final station towards home. Closer proximity to train stations, smaller condo rooms, smaller families, delaying of marriage, and more career-focused mindsets are all factors to an ever-changing shopping habit.
lClick and collect: Continuing from the previous innovation, consumers may not even have to stop and select items at a physical store. Smartphone applications could be utilised to make orders for these necessities, and consumers can just pick them up at these collection points on their way home at their nearest train station. This concept may even be extended to pure-play retailers, who recognise the importance of physical retail points.
The recent launch of Amazon@Purdue, the company’s first permanent, staffed pick-up and drop-off location, on a US college campus, is a first step towards seamless integration between the off- and online world. “Being a pure e-commerce player is less unique than it was. There is more competition. Increasingly, consumers won’t think about online and offline – they will just think about retail,” former Tesco chief executive Terry Leahy recently said.
lThe rise of s-commerce: E-commerce is a widely adopted and accepted retailing practice nowadays. Lately, it has had to make way for the popularity of social commerce. In the past year, “buy” buttons have been implemented by Facebook, Twitter, Pinterest and Instagram. Google has also just begun to add click-to-buy links beneath selected YouTube videos. Social media are no longer about influencing purchases, but actually enabling them. Recent research by IPG’s CMIOnline shows that image-heavy, consumer-driven content sites are most likely to succeed in social shopping.
For example, 43 per cent of shoppers are encouraged to make a purchase after seeing something on Pinterest, while 36 per cent said participating in a Google+ Hangout would encourage them to make a purchase. So it is not surprising that we are seeing brick-and-mortar retailers integrating social content into their websites, or actually implementing a separate social-media platform, in the hope of building trust, expanding their retail presence, developing a dialogue with consumers and simply creating loyalty.
We have only scratched the surface and these are only a few innovations that we can expect to happen soon in the future of retailing. Whatever changes we are expected to experience, be sure that technology and innovation will be their drivers and that your business model incorporates them to survive and thrive.
Pradon Sirakovit is the associate director of strategy and innovation at IPG Mediabrands.
