Retail News CRM

Tag: digitization

  • Asia is leading the global digital retail market

    Asia is leading the global digital retail market

    Retail executives looking to understand the future of retail should take a close look at Asia, where retail is booming as Asia is leading in terms of retail growth. The growth rates are twice the rate of the rest of the world, and e-retail growing at three times the rate.

    Asia is followed by Europe and the US, with China, Korea, and India at the forefront.

    In 2017, China’s online retail penetration was 20 per cent and its CAGR (13-17) was 33 per cent. In comparison, the US achieved an online retail penetration rate of 12 per cent in 2017 and a CAGR (13-17) of only 11 percent. Most dramatic is India, which had a CAGR (13-17) of 53 percent, highlighting the rapid growth seen in the market.

    Market conditions have allowed for swifter digital penetration than any other region worldwide and have led to the creation of ecosystems for retailer and consumer ease, revealed Bain & Company’s latest Asia retail report.

    According to the report, retail ecosystems comprise vast communities of consumers, retailers and partners that are rapidly reshaping the retail landscape. Alibaba and Tencentlead the best-known Asian ecosystems; however this phenomenon is not limited to China.

    Ecosystems deliver a very sticky consumer proposition by combining services like e-commerce, chat, streaming, gaming or payments in a single platform or app, which is becoming almost universally adopted by shoppers, according to the report.

    A large customer base is incredibly attractive to retailers as a channel to a critical mass of customers. But more importantly, the ecosystem also provides retailers with access to hard-to-replicate capabilities, such as last mile fulfillment, data analytics and cloud services, through their platforms. Increasingly, these ecosystems are deploying their capabilities into bricks and mortar retailers as well as online, meaning they can exert significant influence over the retail sector.

    “What we are seeing is the emergence of scale open retail ecosystem platforms across the Asia Pacific region, that offer retailers a compelling alternative to building and scaling their own capabilities,” said report author Melanie Sanders, Bain & Company partner. “The scale of these ecosystems means that we are seeing a battle emerge between ecosystem platforms in key markets, with the potential for a winner-takes-all situation.

    However, the extent and pace of ecosystem development will not be uniform across geographic markets. The report has outlined ten market factors, which has explained why ecosystems have developed so rapidly for some Asian countries, including social factors such as urban density and age structure through to retail market conditions such as the scale/maturity of physical retailers in the country.

    “The emergence of retail ecosystems is raising a new set of choices for retailers about how to participate in this new retail landscape. The emergence of these ecosystems presents huge opportunities for those playing to win in these markets, but at the same time has the potential to completely change the rules of the game and may mean a loss of control,” the report said.

    “Retailers face a confronting set of choices around how to respond the rise of retail ecosystems. At the heart of the decision will be whether the retailer has the capabilities, capital and customer franchise to compete against an ecosystem,” said Jonathan Cheng, report author and principal at Bain & Company.

    As digitisation of the retail sector continues to expand in Asian and global markets, ecosystems will continue to evolve based on the needs of both the consumers and retailers, the report added.

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  • Stocking up on Digitalization to Increase Share-of-Basket

    Stocking up on Digitalization to Increase Share-of-Basket

    With the rise of e-Commerce, Asian retailers are under tremendous pressure to continuously push traditional boundaries and embark on digital transformation to engage consumers. Keeping up with the latest trends in providing the best consumer experience have retailers looking to tech innovations, particularly digital technologies, to play a key role in capturing and keeping customers’ attention and loyalty.

    Technologies such as the cloud, Internet of Things (IoT), mobility solutions, and augmented reality (AR) are driving customer-facing innovations such as digital marketing, smart shopping carts, couponing, and mobile apps – that bring people into the store and keep them coming back. Cloud applications also make it easier for store associates and corporate staffers alike to collaborate and take care of back-office needs.

    The reality is that retailers need to embrace digital transformation and use technology in innovative ways to enhance the customer experience if they want to remain competitive.

    Technology Challenges

    However, rapid adoption of digital in retail not only improves outcomes but ignites new challenges for IT administrators in retail organizations. Among the challenges are how to:

    • Support increased customer engagement with in-store technologies that have high-bandwidth demands
    • Support increasing use of applications in the cloud with a resilient and secure network
    • Ensure connectivity and provide secure access for point-of-sale (POS) applications and electronic payment transactions
    • Ensure performance for real-time applications such as voice, video, and unified communications

    Taking on one of these efforts in the past may have required every resource, but now all of these must be accomplished by the same IT staff.  Also, these changes must be deployed across hundreds and even thousands of store locations spanning vast geographical regions.

    Yet the connective element that brings everything together for retailers –  existing networks are now too complex, too expensive, and frankly, too outdated to support the challenges and opportunities that come from digital transformation. A new approach to the retail network is required.

    With a Virtual Cloud Network, retailers can create an end-to-end software-based network architecture that delivers services to applications and data wherever they are located at global scale from edge to edge, with consistent, pervasive connectivity, and security.

    Faster service delivery on the cloud

    Alfamart in Indonesia is an example of a retailer that embarked on digital transformation by adopting cloud and mobility solutions, and reaped the benefits of a modernized, connected business network.

    Faced with a vast network of over 10,300 minimarts spread across the Indonesian archipelago and basic internet infrastructure in many far-flung areas, it was difficult for Alfamart to convey information in a timely manner across its network.

    The slow flow of information impeded the business’ ability to make critical decisions in a timely manner,  resulting in them not being able to react quickly enough to customer feedback or market trends, and affected overall competitiveness.

    Alfamart decided to connect all of its store employees and partners with a bring your own device (BYOD) strategy and an enterprise mobility management platform over the cloud.

    All store employees are now equipped with the most up-to-date product information, prices and stock level at their fingertips, enabling them to act quickly to meet market trends, and manage peaks in demand for the fast-moving perishable goods they provide.

    This has improved their speed-to-market, reduced training costs by 20 per cent, enhanced mobility across device and platforms, and improved internal communications between management and employees. Customer satisfaction levels have also gone up.

    Keeping systems up and goods in stock at all times

    City Mart in Myanmar is another retailer which benefited from modernizing its legacy IT infrastructure by adopting virtualization. Lengthy downtimes were a common occurrence under their old IT system, which affected their supply chain and resulted in unfulfilled customer orders, negatively impacting revenues.

    The supermarket network implemented a software-defined IT infrastructure and automated certain IT processes, which not only eliminated server downtime but also cut operational expenses by half. Predictive analytics and smart alerts also helped improve the system performance.

    With a new inventory management system, City Mart is now able to gain visibility of their stock across their entire network of 180 stores, whether on storeshelves or in the warehouse. This enabled them to better understand changing consumer demand patterns across different stores, ensure that goods are in stock at all times, and build stronger relations with suppliers.

    Ultimately, the virtualized IT infrastructure supports City Mart’s expanding business, enabling the retailer to meet the needs of Myanmar’s growing consumer class.

    Networking for Retail 2020

    The future of networking is software, and the network of the future is the Virtual Cloud Network. Virtual Cloud Networks allow retailers to create a digital business fabric for connecting and securing applications, data, and users across the entire network in a hyper-distributed world. In this way, retailers can simplify networking and wide area network management, optimize cloud access from all locations, assure high performance for even the most demanding applications, and enforce security and compliance across the network in every store location.

     

    – Sanjay K. Deshmukh, Vice President and Managing Director, South East Asia and Korea, VMware

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  • Alipay to support China’s micro and small businesses to embrace digitization

    Alipay to support China’s micro and small businesses to embrace digitization

    Alipay has announced that it will launch new initiatives to provide more digital tools, safeguards, loan services and training to further improve efficiencies and support the growth and digitization of small and micro businesses (SMBs) in China.

    SMBs form the cornerstone of Chinese society and create millions of job opportunities. However, shifts in industry models mean that online and offline operations are increasingly merging together and this group has lacked the services and tools needed to improve efficiencies and seize the opportunities from digitization. Aiming to tackle this on-going issue, Alipay, will provide the following support to bolster the development of SMBs in China.

    Ÿ   Provide tools and services to support digital operations, including business analysis, customer engagement, and supply chain services aiming to help 100 million SMBs across China.

    Ÿ   Provide an additional safeguard to SMB owners. SMBs using Alipay services will be offered a maximum of RMB1000 (USD $144) rebate every half year on out-patient services. Alipay expects to extend coverage to 50 million SMBs by the end of 2018 and rebate more than RMB500 million (‪USD $71.8 million) in total.

    Ÿ   Provide MYbank’s loan services to 30 million SMB owners and self-employed people over the next three years.

    Ÿ   In collaboration with 100 start-up entrepreneurs, Ant Financial, the parent company of Alipay, will tailor 100 lessons in corporate development and operations with the aim of training 10 million SMBs and facilitate their digital transformation.

    A great number of SMBs have benefited from Ant Financial’s range of services, including those provided to QR code merchants, who are typically SMBs that use Alipay’s QR code to collect payment from customers. These services include business analysis, financial management, loan and insurance services. Powered by Artificial Intelligence, Ant Financial enables SMB owners to apply for business loans in less than three minutes by smartphone, receive near-instant approval without human intervention. One QR code merchant from Wuhan, for instance, applied for a RMB20,000 (USD $2,874) business loan during Chinese New Year and received approval within one second. In the year ending October 2018, over three million QR code merchants have applied for loans through this service with an average loan size of less than RMB8,000 (USD $1,150).

    AI facilitates the entire process of out-patient benefits offered to QR code merchants, from guiding users to upload their invoices correctly, to identifying key data points on the invoice (such as hospital name and fee amount), to reviewing the information and materials submitted. Ant Financial’s blockchain technology secures the authenticity of the invoices. Tens of millions of QR code merchants have begun to take advantage of this offer with 20,000 merchants on average signing up for the service each day.