Click-and-mortar: The real answer to retail industry woes?

We speak to Dione Song managing director, marketing at ZALORA Singapore on what's the future of both brick-and-mortar as well as e-Commerce. Song will be speaking at Marketing magazine’s 3rd annual Shopper Marketing conference, on 11 June in Singapore.

1. In what ways is e-Commerce more costly than brick and mortar?
   

I think there’s a common misconception that it’s always much cheaper to venture into e-commerce versus brick-and-mortar especially in Singapore, where rental rates prevail. Just dabbling in ecommerce most definitely has much lower barriers to entry, but building a successful e-commerce company is a whole different story, and requires a significant amount of content generation, abroad enough assortment, digital and technical investment, and some marketing budget.

E-commerce is an extremely fast-moving business and this means the need for constant refresh of assortment from merchandising standpoint with new drops and replenishments on a daily basis. It also requires a constant generation and update of quality content, to ensure freshness of the site and optimal search performance, which is costly both from a monetary and resources standpoint.

The nature of e-Commerce, at least for us as a fast-fashion e-commerce also means that customers are always expecting affordable prices and good deals. And this is a common behaviour when it comes to purchase behaviour online versus offline. More often that not, this results in a need to run more promotions and more aggressive discounts, which means that

If you're not building a strong private label collection, you face the risk of losing a lot more margins that your brick-and-mortar counterpart.

2. Are Singapore’s shopping malls really on the verge of dying?

The retail industry is cyclical in nature and while malls are not performing as well right now as they did a few years back, no, it would be naive and a tad too pessimistic for one to think that malls are on the verge of dying. There will always be the need to touch, try and test products especially with regards to luxury or beauty items and there will always be customers who prefer face-to-face, human interaction and the immediate gratification from shopping offline, not to mention the demand from the tourism sector.

Over the next 12 months, what will be most interesting though will be how shopping malls react in the face of this retail slowdown, where I believe the divergent between the stronger and weaker malls will become even more apparent than it is now. Shopping malls that prevail will be the ones who are quick to adapt and embrace digital, are open-minded and innovative, and more reactive to the ever-changing needs and demands of customers in Singapore.

3. What will it take for a brick and mortar retailer to survive the onslaught of ecommerce?

I don’t think it’s always that straightforward where it’s a zero-sum game between brick-and-mortar and e-commerce. There’s great potential and synergies between the two, where the medium right now is the only differentiating factor, since we are all essentially selling the same assortment.

The offline retail slowdown has surprisingly resulted in some wonderful collaborations, take for example our partnership with Wing Tai, where we’re the online partner for their portfolio of brands i.e., Dorothy Perkins. As an e-commerce, we can complement their store activities post store hours and be the one-stop portal offering the full assortment to their fans (since we have no physical space constraints) while they can direct customers who cannot find their sizes or styles in-store with a call-to-action to their Dorothy Perkins store on ZALORA, creating a rather seamless online to offline experience for the brand.

4. What does it take to stand out online?

Creativity, curiosity and customer-centricity. Creativity when it comes to the variety of campaigns and new ways of content dissemination. Unlike offline retail, there’s the need to have new campaigns running everyday especially when a high percentage of traffic come from returning customers who want and expect to see something new. Mr. Porter for instance is a company that has been extremely creative with their content, from their rather novel partnership with Kingsman the movie, video narratives to collaborative campaigns with a host of different luxury partners.

Curiosity because to grow and expand quickly online, you need to be constantly curious and hungry to try out new means and technology to reach out and connect with your customers. You need to be open and willing to a/b test when necessary, and be always thinking of ways to improve the entire customer journey. Little changes can go a long way.

Customer-centricity as the beauty of online means a wealth of data and the ability to track the behaviour and preferences of every single customer. This means the capability to segment the most appropriate and relevant content for each customer in a way that will best resonate with them.

Online retail also a longer funnel of sorts versus offline, which means the journey from point of visit to point of delivery and even return (and interaction with CS) is crucial and e-commerce retailers need to address the needs and pain points of customers every step of the way in order to stand out and impress. In all objectivity, I believe ZALORA’s a good poster-child for this in Southeast Asia right now - we’re by no means perfect (it’s almost impossible to be), but we always strive to be close.

5. Can e-commerce be truly experiential?

Yes and it is possible for e-commerce retailers to be truly if not more experiential than their offline counterparts. While there’s no face-to-face per se, we’re able to provide individualised and customised content unique to every visitor and customer based on their preferences and purchase behaviour, almost akin to having a personal shopper always at your service.

The brand experience though is something tougher to achieve with e-commerce but again, brands like Mr. Porter have done well in this aspect with their consistent persona, spot-on visuals and videos, emotive storytelling in all their campaigns, where you’re very much immersed in the lifestyle, luxury and masculinity of the brand.

Other e-commerce retailers like Zappos and ourselves for instance have even gone to the extent of taking the experience to the streets with our click-and-mortar projects, where it’s more about instilling in customers the notion of online shopping and easing them into the e-commerce experience with an educational, interactive and personable space, where they will hopefully gradually welcome and embrace e-commerce as the norm.

Along with representatives of brands such as Amazon, Carlsberg and 3M, Epicentre, Song will be speaking about shopper marketing at Marketing magazine’s Shopper Marketing conference, happening 11th June in Singapore.

To register, please click here or contact Nadiah Jamaludin at nadiahj@marketing-interactive.com or call +65 6423 0329, +65 8389 8454.

If you would like to learn more about sponsorship opportunities, contact Soren Beaulieu at sorenb@marketing-interactive.com or call +65 6423 0329