Retail Reimagine Series #2

TRANSFORMATION IN RETAIL - SMALL RETAILERS

Digital transformation of industries across sectors and geographies has opened up literally the entire world for businesses. However, unfortunately, SMEs have traditionally lagged behind in the digital transition. This is critical considering that SMEs play a vital role in Southeast Asian (SEA) economy. Add to this the fact that Covid-19 has had a tremendous impact on SMEs, and retailers in particular. With the focus having shifted completely from offline to online, retailers (especially small-scale ones) MUST go digital if they want to survive in the fiercely competitive industry.

So, in a world where even large behemoths are struggling with the transformation, how do small scale retailers cope? How do they make the best use of available resources and capitalise on the wide arena that technology provides, considering their Standard Operating Model won’t give them the volume of sales or bottom line they planned for? Most of these retailers have suffered tragically during this Pandemic due to a lack of preparedness or readiness for digital adoption. On the other hand, businesses like Nature’s Basket in India stayed true to the maxim – every crisis throws open an opportunity. They made the best use of digitalisation and social media marketing to firm up their loyal customer base and capture completely new market segments during this period, just by being available to serve customers online and offline.

What Next?

Now that businesses are opening up, organisations must keep accelerating to adopt a faster, practical and smoother transitioning of product, processes and services to ensure they are not caught on the back foot again as well as to make up for the unforeseen delays/gaps in service. The only way to do this is go digital. And this digital transformation needs to focus both on internal and external interfaces. Internally, the operational and business efficiencies, process automation and cost reduction need to be focused on as those would be key to improve customer experience (CX). On the other hand, externally social media marketing needs to be more aggressive and honest, while customers’ deep-rooted needs have to be taken care of – be it physical, emotional or financial.  

AI is a way of life in successful retail firms where customers are guided based on their stated/unstated needs as well as behavioural history. Chatbot assistance for online purchases, widely used by larger retail stores like H&M, need to be adapted by smaller businesses as well to entice customers. Voice/biometric-based identification and guidance, smart purchase and checkout processes, real-time price adjustment based on demand/supply, intelligent product searches – AI needs to take pole position for customer service henceforth. Amazon Go stores in USA, for example, have taken AI-based customer service to a different level altogether.

At the backend, real time sales trend analysis and reports, automated inventory management to optimise resource usage and reduce wastage, customer insights to forecast product and service needs, streamlining of end-to-end processes - there is no end to the ways even the smallest of retail businesses can use AI to improve operational efficiencies.

With the social distancing norms and the lack of access to vaccines by the general population anytime soon, retail has to evolve quickly to offer a smarter shopping experience for all. Whether to do it through complete digitalisation or partial adoption of technology is what each organisation has to decide. And the level digitisation is what might make the final difference between the best and the also-rans. This is the time to take quick action and find ways whilst the challenges remain.