Bridging online and offline retailing as Malaysia moves beyond MCO
Bridging online and offline retailing as Malaysia moves beyond MCO

Bridging online and offline retailing as Malaysia moves beyond MCO

DUE to Covid-19 pandemic and the resulting lockdowns in 2020, retail businesses had to scramble to go online in order to regain sales and survive, while work-from-home workers adapted to shopping online.

Lazada Malaysia chief marketing officer Diana Boo noted that the online shopping platform saw a 300% increase in new sellers on-boarded last year, via its Pakej Kedai Pintar stimulus plan which aimed to assist local small and medium enterprises (SMEs) to sell online.

Lazada Malaysia had targeted the initiative to help 50,000 local SMEs via a series of customised benefits, especially those in the fresh food and groceries categories, new and existing e-commerce sellers, and brick-and-mortar retailers.

“The overall digital economy has grown. We’re not the only e-commerce platform. There are many small businesses that have gone online. And even after the movement control order (MCO) was lifted, consumers continue to stay online and boost the digital economy,” said Boo at the Smart Retail: Powering Nation’s Digital Economy two-day live virtual conference, held at end-March.

Boo was among the panellists at the “Women in Retail” discussion, which was moderated by StarBiz assistant news editor Yvonne Tan.

Other panellists were FashionValet and The dUCK Group co-founder Vivy Yusof and Malaysia Digital Economy Corp (MDEC) CEO Surina Shukri.

Vivy also said 2020 was a very challenging year, with her companies’ sales plummeting almost 50% when the Covid-19 pandemic lockdown began.

She explained that her companies had to be very smart in product pivots, to cater to the changed consumer landscape.

“It wasn’t ideal but we had to do a lot of discounts, we had to do bundles, and whatever we could. We changed up the products – so more loungewear, more essentials like sanitisers, masks, and easier to wear scarves,” said Vivy.

She is also happy that her companies, which have 200 employees, did not retrench anyone or imposed pay cuts.

“There was a drop in sales, but overall, it’s not that bad – I think about 10%. The biggest thing for me as a business owner and, as an employer was to make sure we didn’t have to retrench anyone. We managed to weather through,’ said Vivy.

Surina also said among MDEC’s initiatives to help SMEs overcome the challenge of digital transformation, was a nationwide campaign under the government’s Penjana stimulus plan to partner with private sector companies in order to onboard micro-SMEs onto online sites.

“Last year, more than 245 companies benefited from this, and about 45,000 new micro-SMEs were on boarded to different e-commerce platforms including Lazada and Shopee. We also saw a large increase in online shopping and in six months alone, there was RM1.2bil of sales from 7.5 million consumers,” said Surina.

Surina also spoke about MDEC’s eUsahawan programme, which is to assist Malaysian youths and micro entrepreneurs in digital entrepreneurship.

“Over the years, we helped train 365,000 people – 65% of them are female entrepreneurs. In the rural e-commerce space, last year we started piloting one stop digital centres and 79% of the participants are female entrepreneurs. We’re certainly very excited and encouraged by the statistics regarding female representation,” she said.

What’s in Store for Retail in 2021? Power Panel (from left): Assistant professor of marketing, Asia School of Business & international faculty fellow at MIT Willem Smit, ADA’s regional head of business insights Vittorio Furlan, Ministry of Domestic Trade and Consumer Affairs secretary general Datuk Seri Hj. Hasnol Zam Zam Ahmad, Malaysia Retail Chain Association’s president Shirley Tay and The Food Purveyor’s CEO Geoff King.

Meanwhile, ADA regional head of business insights Vittorio Furlan said from an advertising standpoint, communicating or influencing people is not necessarily any more through a bigger billboard on the street, or even through advertising on Facebook or other social media.

“Consumers and the way that we communicate have changed. People like to search online, but then they go to the store to buy the product. As a brand or retailer, we have to look at what the consumer really wants and how do we satisfy that desire for human experience,” said Furlan, who was among the panellists at the “What’s in Store for Retail in 2021?” discussion.

The discussion was moderated by Willem Smit, who is an assistant professor of marketing at the Asia School of Business and an International Faculty Fellow at Massachusetts Institute of Technology (MIT Sloan).

Other panellists were The Food Purveyor CEO Geoff King, Malaysia Retail Chain Association (MRCA) president Shirley Tay and Ministry of Domestic Trade and Consumer Affairs secretary general Datuk Seri Hasnol Zam Zam Ahmad.

Tay pointed out that Generation Z (those born from the late 1990s to early 2010s) are changing the retail arena.

“Gen Z are very knowledgeable, well informed, and many of them are financially secure thanks to parents who have fewer children,” she said.

Tay also said that retailers need to have omni-channel strategies to reach customers, and said, “Connectivity and engagement with consumers will still be the top priority.”

King also noted that the food retail industry had seen a much bigger growth in online commerce in 2020.

“We’ve had to adapt very fast to meet that need. And where we used to pride ourselves by having a smiling butcher, explaining about the cuts of meat and how to cook it – now, we have to think about how to do that online. So, the customer still needs to be entertained and educated and served, but it’s in a very different way than was in the past,” said King.

Hasnol pointed out that there are many funds available within government ministries and agencies to support various sub sectors within industries.

“That is something that industry players should try to benefit from. The government is always willing to listen to new ideas and new ways on how the retail industry can be further assisted,” he said.

Meanwhile, automation and live chats have been crucial in customer support channels during the lockdowns in 2020.

AirAsia chief customer happiness officer Adam Geneave said an enormous challenge over the last 12 months for the low cost carrier’s customer support teams was the huge jump in the volume of cases.

“In 2019, for example, we spoke to 20 million people. In 2020, we spoke to over 50 million people. Pre Covid-19, our customer experience teams used to talk to about 50,000 customers a day. During the peak of the pandemic, we were speaking to over 500,000 customers a day, as flights got cancelled and borders closed, and people needed to change flights, or access refunds and credits,” recalled Geneave who was among the panellists at the Customer Experience Industry Panel discussion.

The discussion was moderated by KPMG in Malaysia head of technology consulting Alvin Gan.

Other panellists were fast fashion retailer Love, Bonito Malaysia country director Joan Yeoh and Ninja Van Malaysia chief operating officer Lin Zheng.

“So, we really quickly had to pivot the way that we were talking to our customers. We focused on increasing automation to give customers the ability to self-serve, primarily through the AVA chatbot. We have seen much better customer satisfaction. At the end of the day, customers want this fast interaction,” said Geneave.

Lin also said due to the MCO, the logistics company pushed more customers to its live chat team.

“When we started live chat, it was only about 5% to 10% of our contact points. Now, it is 30%. Customers are also happier because they get the response sooner,” said Lin.

Regarding Love, Bonito Malaysia’s response to the Covid-19 pandemic, Yeoh said the company tested and trialled store-to-door services.

“There are customers, mainly in Malaysia, who really didn’t feel like shopping online. We provided the option for them to pick up stuff from the stores, and deliver to them. And that retained a lot of our loyal offline retail customers,” said Yeoh.

“We need to really see how different channels play a role in terms of delivering customer experience,” she said.

Regarding challenges in driving digital transformation in organisations, QSR Brands group chief information officer CK Chong said topping his list was acquiring the right technology and recruiting talent.

“Getting talent like data scientists in Malaysia is very difficult. Our strategy now is to work with technology partners from overseas. We need to create more technology talent in the country,” said Chong who was among the panellists at the Digital Operations Industry Panel discussion.

The discussion was moderated by NielsenIQ head of Nielsen operations centre (East Zone) Punit Singh.

Other panellists were AEON Retail CEO Shafie Shamsuddin, and Heineken Malaysia digital and technology director Janina Vriesekoop.

Chong also recalled that the group, which operates the KFC and Pizza Hut chain of restaurants in Malaysia and neighbouring countries, learnt a lot from its principal Yum! Brands in dealing with the Covid-19 crisis.

“From their experience in China, we learnt a great deal about contactless delivery. We had to be very fast in coming up with policies and procedures in place to protect our employees, customers, and to make sure our food is safe as well,” he said.

Meanwhile, Vriesekoop said she preferred a hybrid of remote working and work on-premises.

“To be honest, we had a trust issue in the beginning regarding remote working. But we see the results. They’re more effective and working harder from home. The time being spent on the work itself is much more productive,” she said.

Shafie said the future would see a mix of offline and online retail.

“It is important for us to envision that in the future, 30 to 40% of our workforce will continue to work from home or from everywhere. The digital transformation will continue to be important, and we need to continue to build our infrastructure,” he said.

Retail NZ’s chief executive Greg Harford

Meanwhile, Retail NZ chief executive Greg Harford gave a presentation entitled “Retailing in New Zealand through the lows and highs of Covid-19”.

Harford explained that New Zealand, with its population of about five million people, has about 27,000 retail businesses that operate across 35,000 sites.

“Many of them are very small. Half of the retail businesses are owner operators with no staff – perhaps a husband-and-wife team or a family business. There are just 345 retail businesses that employ more than 100 people,” he said.

Harford also pointed out that pre Covid-19, just under 9% of retail sales were done online.

“Before Covid-19 hit us, we think about 45% of retailers in New Zealand had no e-commerce capability.”

Harford noted that the New Zealand government had imposed very strict lockdowns for six weeks, from late March in 2020.

“Supermarkets were the main source of retailing through that period. While we were at the first of the most severe lockdowns, e-commerce was not permitted either. We saw about an 80% fall in retail sales over that period,” he recalled.

“And what we saw really through that period was huge innovation as retailers rushed to go digital and businesses going online for the first time.”

Harford also estimated that presently, about 17% of retail sales by volume are done through e-commerce channels.

However, he thinks that New Zealand consumers will still want to go to physical shops “to touch and feel the goods that they want, and I don’t think that’s going to go away anytime soon.”

Other presenters at the online conference included NielsenIQ managing director (Consumer Insights APAC & Global FMCG Vertical) Arslan Ashraf, who spoke about “The Future of Retail”.

Arslan’s presentation gave insights on the strong emergence of omnichannel behaviour across FMCG and Non-FMCG categories.

DAPAT Vista CEO Amanda Sabri also gave a presentation entitled “The Next Frontier of Serving the New Digital Consumers of Southeast Asia” which shared insights from launching and scaling eJamin in 2020, Malaysia’s first digital bail payment solution.

Nishtha Narula, a seasoned business development and strategic partnerships executive at Forter Asia Pacific, spoke about how online retailers are experiencing a surge in new shoppers but these newcomers are five to seven times more likely to be declined.

Nishtha explained why it was critical for retailers to better understand the reasons and impact of these false declines, reasons for e-tailers turning away new customers, and how retail businesses can capture more customers and revenue.

KPMG’s Head of Consumer & Retail (Asia Pacific) Anson BaileyKPMG head of consumer & retail (Asia Pacific) Anson Bailey also shared some of the latest technologies and innovations that are expected in the retail arena, and looked at the changing consumer behaviours of young millennials as well as the rise of Gen Z consumers and their appetite for ‘livestreaming’.

Brightcove senior solutions director (Asia) Greg Armshaw gave a presentation entitled “5 Steps to Success in E-Commerce”, and spoke about how e-commerce retailers are embracing video at record speed, the Pay to Play e-commerce strategies, as well as platform search and discovery ads and tactics to reduce returns.

ADA regional head of business insights Vittorio Furlan gave a presentation entitled “The Post-2020 Customer: A New Blend of Digital and Traditional”, and talked about how 2020 had changed the behaviour of consumers, disrupting traditional shopping patterns and seasonality.

The Smart Retail: Powering Nation’s Digital Economy was a two-day live virtual conference that is part of Star Media Group’s #digitalXdata Road to Malaysia 5.0 event series dedicated to enabling digitally-powered Malaysia businesses to accelerate growth in the new Malaysia 5.0 digital economy and, to drive innovative change among the society in building human-centred nation powered by disruptive technologies.

It was organised by Star Media Group Berhad with ADA, Brightcove, DAPAT Vista and Forter as Terabyte Partners, and Credit Guarantee Corporation Malaysia Berhad (CGC) and TIME dotCom as Gigabyte Partners.

KPMG in Malaysia and NielsenIQ were the Knowledge Partners, eLearningMinds was the E-Learning Partner and sendQuick was the Mobile Messaging Partner.

You may watch the playback of the session on bit.ly/smartretailplaylist

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