At Huawei APAC Digital Innovation Congress 2022 in Singapore, I had the great opportunity to share my thoughts on the future of the Retail industry.
Retail’s future is colorful because it drives, above all other industries, the new consumer vertical and allows for innovation, experimenting, and constant engagement.
Similar to banks competing with FinTech, the Retail industry has taken up the challenge to catch up with the new entrants and marketplaces across the region. In Thailand and Asia mainly, retailers have focused on the OMNI Channel experience, allowing customers to do online shopping and linking with an in-store experience – such as collecting bought items in a store.
Significant inroads have been made, and during the Covid period, well-positioned Retailers have experienced online growth of 300-600%. top online-only marketplaces, such as Lazada and Shopee (with traditional retailers and brands incorporated) have likely generated more revenue and growth – yet not without their own set of issues.
A list of leading eCommerce Marketplaces and Super Apps in the region – half of which I had the opportunity to participate in. The new One Siam Super App, linking eCommerce Marketplace, with Content, and Loyalty on- and offline across malls – adding FinTech into it in the near future – is one good example. Central Retail’s OMNI Channel Offering has reported for 2021 an impressive 20% share of the overall revenue, which is impressive. This shows that digital transformation can be successful.
That being said, not all new Corporate driven SuperApps are doing well. SuperApp and eCommerce are difficult businesses to succeed in.
“We” are still all too often stuck in the basics. One of the reasons is that traditional Corporate organizations face significant headwinds to delivering the primary technology infrastructure and business thinking driving online, not evening thinking about innovating on top. This is true even though substantial investments and outsourcing partnerships are being undertaken – which should make us question this approach.
The basics include basic commerce, social network integrations, performance marketing (Google Shopping, Facebook ads, Instagram, and TikTok commerce, etc.), Merchandising Management, Order Management, and Logistics, Omni Channel POS with in-store integration, AI (Recommendations, Customer Segmentation), Content Management, and, of course, 100% cloud-based.
This also needs a clear business, feature, and technology strategy to remain successful. A technology framework to enable rapid execution, with new products launching every 4-6 months versus every year.
This is the fundament for the colorful future we wish and it requires a team with strong capabilities in all of these elements! It is proven that outsourcing the top firms in the industry alone is not a magic bullet and puts one into the reverse course.
Key issues are lack of strategy and skills, corporate culture, outsourcing, and intentionally slow delivery. Fixing these with the right capabilities and also leadership in place, driving this forward remains critical.
Pivot Digital’s Methodology, based on our experience, prescribes a mix of clear areas to excel in.
- Strategy in Business and Technology, Agile Operating model, and a super focus on execution (Think Apple)
- Key partnerships for business and technology to rapidly roll out versus doing everything in-house
- Proper Culture driving empowerment, aspiration to shareholder value, and having critical capabilities
- Modern Tech Framework based upon Open Source and Cloud, standardized. This creates the core platform to evolve capabilities with.
- AI and Data Insights need Data Science, and the proper tech framework upon these can be delivered.
The Technology Choices should be leading edge and not older proprietary ones. Technology Strategy today is defined by “Big Tech” and the Open Source Community – not by the traditional IT Vendors or Outsourcers anymore. It is critical to base a framework upon these principles and analyzes what Big Tech players are doing – even if you do not always use these platforms, they tell the trend.
The same is valid for Open Source. Free Software is interwoven in most Cloud and Tech firms’ products. Often Analysts and Consultants refer to the vendors, who all too often have open source under the hood. Frameworks like Spark (big data analytics engine), ElasticSearch (globally adopted eCommerce Search Engine), SuperSet (Business Intelligence), Flutter (Hybrid Mobile App development), Airflow (Workflow engine for data analytics activities), nodejs an API orchestration and capability development layer almost all mobile apps are using today, and finally Kubernetes/Docker a dominant virtual server technology.
Like Vendor names, it is critical even for the business to understand the important open-source frameworks and methodologies, as it is a measure of in-house capability and innovation.
Once we’ve got the framework right and have the team and the strategy, what is next? We need to be wherever our customers will be, or our businesses will disappear. Understanding consumer trends and even more critical in our target customer segments is the key to driving new ideas on how to evolve our service and product offerings. This will drive the formulation of new revenue growth engines.
So start to hustle, as speed to evolve is critical. No 1-2 year thinking, but the quarterly focus is essential and the ability to ‘make it happen’ within each quarter – linking strategy execution sprint by sprint, as well as new upcoming ideas into the delivery cycle.
We expand into the next generation of Social and Conversational Commerce, such as Facebook Live, Chat & Shop, but also integration with Tokenization firms, Mobile Games, Loyalty, etc. Driving engagement and excitement with the consumer. This strategy has proven highly successful for Thailand and regional online retailers.
CBI Insights estimates that most Retail VC investment is going into Asia – this is us being the leader. This means we shouldn’t look for Retail Innovation in the West. Technology Innovation is all over the place, the US, Asia, and even Europe.
This means, that Retail really isn’t only one industry anymore. It evolves around the Consumers’ needs and now incorporates all products and services the consumer is interested in. Thinking fine dining, traveling, payments/wallets, subscriptions, healthcare, insurances for what one orders, consumer credits via BuyNowPayLater products, and much more. We can also so leading retailers and eCommerce platforms like Grab, Shoppe, JD, or Central are focusing on these.
Advanced retailers and SuperApps would offer in-store and online services, expanding further upon this. Returns in any store, Try & Buy for Fashion, Personal Shopper support, Endless Aisle in the store (offering items to customers not currently in-store), own your Avatar (…) via NFTs, etc. It is about innovating, learning, and adjusting rapidly – not on annual dimensions, but every couple of weeks.
Furthermore, OMNI Channel customers increase significantly in value versus single-channel customers, giving Retailers a profit advantage, if used right. Yet consumers who ‘love’ a certain app, will keep using it – attracting them to others comes with high effort and cost. Being innovative, fast, and efficient are critical elements in the overall strategy.
To hustle and innovate is critical. It is a constant race, and being well-positioned with consumers is critical to driving revenue and generating future growth engines.
This includes the evolving Web3 ecosystem. Not all that the Hype PR engine shares is actually being adopted by consumers yet, but now is the time when the next Facebook or the next Google is being born. Being an early adopter and a participant is critically important.
At Siam Piwat we are engaging with Zepeto and successfully launched the first Songkran Thai New Year in the Metaverse. We are setting up new Digital Asset Tokens, as well as having launched an NFT Marketplace with Kasikorn Bank.
New ideas will come, and we will be there. New technology, like XR Glasses, will accelerate the adoption of the Metaverse, and also, new metaverse platforms will appear, where users actually have the interest to stay in. The ability to innovate at a moment’s notice is critical and this presentation hopefully showed this!
The future of retail remains colorful, but we need to have the skill and strategy to make it so.
Siam Piwat is a Luxury Mall Operator in Bangkok, with prime properties such as Icon Siam, Siam Paragon, and others.
Pivot Digital is a Digital Consulting and Tech Firm that helps organizations transform and launch complex digital platforms. My role is Director and Co-Founder.