“New boys on the block” such as Amazon and Alibaba are able to disrupt markets because they are “customer obsessed”, according to speakers at a briefing hosted by marketing and communications firm Williams Lea Tag in Hong Kong.
“The stock for grocery retail overall in Australia fell through the floor when Amazon bought Whole Foods,” said speaker Peter Wilson, founder of The Shopper Collective retail consultancy. “Everybody is really concerned, particularly those in consumer electronics and certainly grocery retailers.”
To have any hope of taking on these firms, it is imperative that all companies start placing shopper desire at the heart of their offering, the experts said.
The proportion of brands that understand this is still dismally low, according to retail expert and author Martin Butler. “98 percent of people I speak to don’t know what their purpose is,” Butler told Campaign Asia-Pacific. “Fundamentally, we are all floating in a sea of sameness and rubbish customer experience compared to how it used to be because of cutbacks, and this is lowering the bar and opening doors for the likes of Amazon and Alibaba.”
While many stores claim to listen to their customers, Butler continued, few respond by giving them what they really want. He cites automated tills in supermarkets as an example of “lazy thinking”: a smart solution to tackling queues, said Butler, would not be one that made shoppers do all the scanning and packing themselves.
“Winners”, on the other hand, are always striving to think about how to make life better and easier for the customer. “We are all hardwired to love easy,” said Butler: Amazon’s ‘1-click’ ordering scheme, for instance, came about as a result of this insight.
Wilson mentioned the New York wine store Bottlerocket (pictured, below) as another example of a 'winner'. Armed with the understanding that the average customer doesn’t need or want to engage with wine beyond ‘red’ or ‘white’, the shop started grouping bottles according to consumption occasion, such as “take-out wine”, “meat wine” or "gifts".
Convenience is crucial to customer experience, said Wilson. “Shoppers only spend 20 percent of their time in grocery stores actually shopping. 80 percent is spent trying to find products, and that is ineffective time. That 80 percent is where we need to optimise efficiency and reduce frustration.” The days of placing everyday items at the back of stores, hoping customers will pick up more products on their way to find them, should be dead and buried, he continued: when he worked with one client on an experiment to place premium-priced bread and milk at the front of a shop, sales went through the roof.
Most of Asia has a woefully long way to go before it starts converting such insights into actual policy, agreed the speakers. Australia is slightly ahead of the curve in this region, thinks Melissa Chan, Asia MD of Williams Lea Tag, as is China because of the size of their domestic market and their data collection powers. Of frequently-compared Singapore and Hong Kong, meanwhile, Singapore has an upper edge, said Chan, because consumers are more open in sharing personal data. Data in Hong Kong is limited to “intentional” information gathered from Octopus cards, for instance.
Hong Kong is still “right at the beginning of the process” of changing their retail landscape to suit modern shoppers, according to Wilson, with adjustments only really being seen in high end stores so far. He mentioned the lifestyle store City Super as an exciting example: this shop has acknowledged the global trend for opening up more physical space in store for shoppers, something particularly foreign to the Hong Kong market where narrow aisles and densely stocked shelves prevail.
Singapore is also interesting, he continued, because the strength of the currency has recently played a huge role in changing the way people approach shopping. “The holiday maker who stops in Singapore on the way to Koh Samui, for example, is thinking twice about that because it’s not as cheap as it used to be,” Wilson told Campaign Asia. “From what I can gather from conversations with clients in Singapore, there seems to be more of an inward focus - how do we cater for people’s needs on an everyday basis? It’s all about optimising experiences for them.”