5 challenges retailers will face in the eCommerce era

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ECommerce might be seen as the factor that transformed retail. The pandemic, however, accelerated its trajectory to its readiness to transition to the next phase, NielsenIQ said. As eCommerce enters the next phase, retailers will be met with five main challenges.

1. Greater fragmentation in retail: Many resellers are using one retailer to connect with consumers.

2. Redefine the role of physical stores: While consumers will continue visiting physical stores, retailers need to think about how they can get existing patrons to spend more or bring in new customers.

3. Divergent realities: Brick and mortar retailers need to rethink ways to reach consumers, especially in a world where consumers are exposed to seamless shopping experiences across platforms and channels.

4. Fight for attention: Keywords and ads may no longer be enough to catch and keep the shoppers' attention moving forward. Retailers also need to consider how different the role of price and promotions will be, and what role will loyalty play in the adopted omni-shopper world.

5. Last mile fulfillment frenzy: Retailers need to think about how they can meet and feed the appetite for faster delivery services.

Vaughan Ryan, NielsenIQ’s Consumer Intelligence MD in Asia, said the technological advancements and creativity of the last decade have made the retail world more advanced. This has led to an environment where trust is solidified, where it is more than logistics but more about pushing the envelope on personalised discovery and curation, where there is exploration of new categories, and seamless omnichannel integration, he added.

Meanwhile, online sales for FMCG companies might have risen during the pandemic. However, NielsenIQ said the growth did not come from the increase in spend by existing online buyers, but rather the rising numbers of households buying online and from increased frequency in buying and spend. According to the global measurement company, this "signals the end of the beginning of eCommerce in Asia".

In Indonesia's urban areas, in particular, the number of online buyers grew by 15% over the last 12 months. Aside from seeing trip frequency grow by 37% in Indonesia, NielsenIQ also noted that the amount of money spent online by Indonesians also increased by 46%.

In terms of increased frequency in buying and spending, Indonesia comes in second after Hong Kong, which noted a 75% increased frequency in buying and 52% increased spending. Philippines had the most number of households buying online (325%) among the countries surveyed, and 67% plan to continue to buy online even after quarantine restrictions are lifted in the Philippines. MARKETING-INTERACTIVE has reached out to NielsenIQ for additional information.

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Mia Triscahyani, NielsenIQ’s Consumer Intelligence head in Indonesia, said retailers must realise that although brick and mortar stores remain the main channel for Indonesians, consumers are now used to doing almost everything online.

"Retailers and FMCG manufacturers need to engage consumers creatively and respond to their needs immediately by having an omnichannel presence. Without an omnichannel strategy, it will be a tough road ahead for retailers and brands as eCommerce matures in Indonesia and moves on to the next phase," she explained.

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Photo courtesy: 123RF