4 Ways APAC Retailers Can Connect With Customers

From big-box stores to luxury brands, retailers are digging deep to connect with their customers–both in-store and online–on a more sophisticated level.

From big-box stores to luxury brands, retailers are digging deep to connect with their customers–both in-store and online–on a more sophisticated level.

Many of their methods are enabled by technologies highlighted at The Retail Asia Expo, held earlier this year. But there’s more to it than that. What follows are four key ways retailers are rising to meet customer expectations for a shopping experience worthy of their precious time.

1. Points For Personalisation

The dynamic between retailer and customer is no longer one-to-many. Rather, today’s relationship is bespoke and based on trust, said Mike Ghasemi, director for IDC Retail Insights Asia-Pacific.

“The most basic way to build trust is to know who the customer is and understand their preferences,” he told CMO.com. “Retailers should be customer-centric, not product-centric, as the product is not the key differentiator in retail business.”

This is evident in Asia’s travel and hospitality industry, where airlines and hotels are losing customers to online travel agencies (OTAs) that offer more personalized services, rather than just flights and accommodation.

Customers also want more than the traditional transactional reward system. They want next-gen loyalty experiences made possible through personalisation, Seton Vermaak, head of strategy for SapientRazorfish in Hong Kong, told eMarketer. A good example is the Starwood Preferred Guest (SPG) program, which provides access to concerts and VIP events to millennial travellers.

In mobile-first Asia’s broader retail landscape, the cornerstone of personalisation is, without a doubt, technology. In Southeast Asia and China, apps are vital for all businesses, from big players to mom-and-pop shops, once again highlighting the importance of experience over product.

2. Trust At The Core

Consumers, not companies, are driving business decisions, according to the Fung Business Intelligence report “Asia Retail: 9 Key Trends and Developments” (PDF). This underscores the criticality for retailers to build trusting relationships with shoppers.

“The business opportunities offered by the digital economy will not be realised without a conscious and focused effort to build trust in the online retail world,” IDC’s Ghasemi said. “As we look ahead, companies that will win in the world’s increasingly digital markets will be those that can grow, manage, and cultivate strong and trusting relationships with evermore discerning customers.”

For several years now, Nielsen reports have consistently shown that Southeast Asian consumers are prepared to pay more for quality products from brands with good reputations. They want to know where their money is going, which means part of building trust includes genuine transparency and a commitment to sustainability.

Fashion is prominent in this space, with socially conscious brands offering insight to their production processes and cost breakdowns. Some brands also share the back stories about their products, such as Singapore-based Design Up Asia, an online store that sells jewellery made by single mothers with limited access to work opportunities.

3. Tech-Driven Business Models

It’s all about the experience, and technology is the mechanism to create and deliver the engagement and service customers demand.

“Retailers are embracing advanced technologies and improved customer engagement using digital tools such as virtual and augmented reality, aligning their business with the needs of the evolving customers,” the Fung report stated.

One retail giant implementing a new strategy is IKEA. The traditional bricks-and-mortar behemoth announcing it will experiment with online ordering, third-party vendors, and pick-up points in countries such as Japan and China—a radical move away from its founding concept of customers visiting the stores.

IKEA is also working with augmented and virtual reality technologies to help customers design their spaces, while also looking to acquire a gig-economy platform for furniture assembly and other related tasks. All of this is aimed at meeting the changing needs and habits of customers.

Other retailers and e-commerce players are utilising made-to-order and direct-to-consumer business models. Furla, an Italian handbag company, launched its “Made For You” service at its flagship store in Singapore. And in May, U.K. luxury label Burberry executed an exclusive launch of its DK88 handbag online through a WeChat shop. The launch, in conjunction with fashion blogger Mr Bags, was part of a campaign that included a WeChat game.

4. Immersive Experiences

Experiential shopping is finding its way into more and more stores and malls across Asia as retailers understand that their increasingly sophisticated customers are looking for immersive experiences and added value through services. This shift away from consumption is a way to get customers in store. The immersive experience can include food and beverages, activities, and cultural and lifestyle elements, with technology playing a big part in this upgraded shopping environment.

“An increasing number of retailers in different segments have opened experiential stores or flagship stores that pay particular attention to service offerings and emotional engagement with customers,” the Fung report stated.

The flagship Samsung Experience Store Large in Malaysia, for example, was relaunched in June to provide a one-stop retail solution encompassing merchandise–devices, wearables, and accessories–as well as after-sales care, upgrades, and repairs.

Other in-store experiential shopping innovations include 3D virtual fitting rooms and the 3D foot scanner for shoes launched by South Korea’s Lotte Department Store. Other advanced technologies in-store include on-demand and robotic checkouts.