Driven by data: The retail renaissance and what comes next

This post is sponsored by ZALORA.

Since the pandemic began, 60 million people across Southeast Asia have started using a digital service for the first time, as reported by Google, Temasek, and Bain & Company. That is roughly equivalent to the entire population of Italy coming onboard the digital economy; browsing through the latest products, saving to wish lists, and adding to carts – all of which are key data points that give brands a more profound insight than ever into consumers’ preferences.

Navigating that influx of data, however, can be challenging for brands that are less familiar with the complexity of Southeast Asia. There are many dimensions and layers to unpack in this extremely diverse region, along with domestic market nuances.

Still, by leveraging the right data that hones in on consumer preferences, and employing behavioural testing in targeted ways, retail brands stand to make the most of Southeast Asia’s eCommerce boom, and the rising tide of live commerce or “shoppertainment”.

This is where adopting a data-driven mindset and deploying the right analytical tools is critical. TRENDER, a data by GFG product, harnesses trade data from ZALORA’s 2.6 million active consumers, translating these into actionable insights that have helped brands such as Under Armour scale up their growth in Southeast Asia quickly through laser-sharp strategic planning and decision-making processes.

When the right data is put to good use, it goes a long way in replacing the guesswork on many business processes – from inventory planning to sales forecast – in turn, helping brands to truly optimise their omni-channel efforts. 

Decoding consumer behaviour with data

Through the application of data, brands can better anticipate shopping behaviour and act more quickly to cater to consumers’ changing needs and preferences. This gives them the agility to offer new products and categories even when demand levels are shifting quickly, turning uncertainty into an opportunity.

For example, even as demand for traditionally popular categories such as occasion wear dipped because of consumers’ extended isolation at home, our internal data found the number of customers shopping for luxury products surged by 172% between March and July 2020. This suggests that consumers are increasingly favouring quality over quantity, and signals a new-found penchant for pampering amid the pandemic.

In fact, during the pandemic, Southeast Asian shoppers spent an average of US$127.50 per person on luxury items across eCommerce platforms. By following the data, we were able to capture this emerging demand by launching our luxury category last year on ZALORA, which has since seen triple-digit growth.

Another critical insight that data has consistently shown is the rise of sustainable products over the past year, with 60% of our customers indicating they would be willing to pay at least 5% more for sustainable products. If anything, the pandemic has prompted a recalibration of priorities, directing consumers towards more meaningful pursuits and purchases. Guided by the data, our carefully curated “Earth Edit” category was launched precisely to help consumers find sustainable products more easily.

The “Great Retail Reckoning” of the past two years has not only led to unprecedented numbers of online shoppers, but also uncovered demands and expectations that have evolved much more quickly in response to fast-changing socio-cultural norms and market realities. Analytics platforms such as TRENDER are mission-critical in driving strategic decisions that will benefit both brands and consumers.

Engagement through entertainment

As live commerce continues to take the online world by storm, data also plays a central role in helping brands capitalise on this segment, which is expected to grow to US$19 billion by 2023. Audiences now seek personalised experiences, and content online, and brands will have to get creative in bridging the online and offline shopping experience.

Technologies such as augmented reality and virtual reality can also help bring in-store experiences to consumers as they continue to browse and shop through their smartphones.

Beyond investing in newfangled technologies and creating quality content, the bigger challenge for brands lies in producing content that actually speaks to the audiences’ state of mind and the current zeitgeist. Processes such as A/B testing, which is guided by the data, are essential for determining the types of relevant content best suited for different online channels.

As part of our continued effort to create the best-in-class experience for ZALORA’s consumers, we are always mining insights through careful testing to drive both the quality and relevance of our content, including on our very own live-streaming platform Z-Live, where we offer show themes that cater to specific audiences, from sneakerheads to beauty enthusiasts.

What comes next

Just like the Renaissance in the arts, this period of retail transformation, which has been accelerated by the pandemic, has sparked all kinds of innovations – from new modes of content such as NFTs and digital fabrics, to novel ways of engaging customers across digital and social channels.

Such a period of flux only reinforces the importance of taking a customer-centric approach; anchored by data, we have developed new features, assortments, and strategies that are truly responsive to customers and their changing world.

As challenging as that process can be, not least in what is arguably the world’s next frontier in the digital economy, this is a time of immense opportunity that we cannot afford to miss. Equipped with data, a passion for innovation, and a limitless mindset, the industry and ecosystem as a whole stands to usher in the new age of retail.

The writer is Christopher Daguimol, head of corporate communications, ZALORA.