Why omnichannel is the future of retail
eCommerce is doubling across Southeast Asia year on year so it’s time for retailers to invest in an omnichannel approach to secure more sales.
3 mins read
Takeaways from this article
eCommerce across Southeast Asia is booming. In 2015 it accounted for US$5.5B. That figure nearly doubled to $10.9B in 2017 and it doubled again in 2018 to $23B. According to Google, it’s expected to hit US$102B by 2025. That’s huge!
What does that mean for bricks and mortar retailers? It’s time for an omnichannel approach, with a focus on mobile.
Why mobile?
72% of Southeast Asian eCommerce traffic now comes from mobiles, topping in Indonesia at 87%, and the gap in cart sizes across devices is narrowing (down to US$54 on desktop vs $52 on mobile in Malaysia). Why? Because it’s easy. Smartphones provide always-on access to the internet, filling our time as we catch the SMRT, wait for friends or sit on the couch in front of the TV. They also offer a cheap alternative to desktop computers and home internet services with 3G now available nearly everywhere and 4G expected to have 69% coverage across Southeast Asia by next year.
Why omnichannel?
Just like with a brick and mortar store, when you’re selling online you need to be where your customers are. You could offer the most amazing products on the market but if your sales are primarily from foot traffic, and your store is nowhere near where people walk, you’re not going to do well. It’s the same online. Some of your customers may be on Facebook, others on Instagram. Some buy from apps but others prefer mobile web. Some like to buy direct while others browse online marketplaces like Alibaba, eBay and Amazon. And if you want to maximise your sales, you need to be everywhere they are.
How’s that good for my business?
While setting up and selling online can be a costly endeavour, in the long run it can cut down some costs and help you better target your customers.
If we look at it from a cost perspective, every store you have comes with staffing costs, leasing costs and utilities. And space for inventory is limited. When you’re online, those costs go down. You still need staff to package and ship your products, and space to hold them, but the time and cost invested into beautifying a physical space for your customers is gone. You can even consider an on-demand model which removes your need to hold stock before a sale is made.
But we’re not saying abandon your store! In-store shopping offers the perfect place for consumers to touch, feel and try on your wares before making a decision. However, you no longer need to stock hundreds of every item in every colour and size as you can rely on your online presence to finalise the sale.
Engaging your customers
Social networking on mobile is huge with 52% of consumers across Southeast Asia using the mobiles to log in to their networks. But messaging apps like Messenger, WhatsApp and WeChat surpassed them with over 500 million more monthly active users in 2015.
To join in the conversation, smart businesses are investing in chatbots and using them not just to communicate with their customers but also to manage customer service and make sales. So just because a customer walks out of your store, with an omnichannel retail and marketing approach, they don’t have to leave your pipeline. Through chatbots and messages, you can continue to engage them and encourage first and repeat purchases as relatively low costs.
The first steps into eCommerce for retailers don’t need to be big investments. You can start small with a social networking page or marketplace store and grow as you see the return on investment. The opportunities omnichannel provides goes beyond more places to sell and into more ways to market and engage.
This information is provided for informational purposes only. It does not constitute legal, financial or business advice.
The first steps into eCommerce for retailers don’t need to be big investments. You can start small with a social networking page or marketplace store and grow as you see the return on investment. The opportunities omnichannel provides goes beyond more places to sell and into more ways to market and engage.
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