Marketing insights: Making data analytics work in your favour in retail

For a long time in the Singapore market, we have been debating whether e-commerce has killed the brick and mortar business.

But many are often surprised to find that e-commerce is actually breathing new life into the retail space with online brands such as ZALORA, Love Bonito, In Good Company and eyewear brand Visual Mass leading the pack. Connected by the power of data, both e-commerce and physical retail stores know that to survive, garnering the right data to understand consumers’ spending habits and preferences is crucial.

And, it goes without saying, an omni-channel experience is necessary. While “omni-channel” is a buzzword among retailers nowadays, Karen Chan, senior vice-president of digital for APMEA at C&J Clark, said companies now need to think channel agnostic and take steps to remain relevant in the eyes of consumers. She was speaking at Retail Summit 2018 organised by Marketing in collaboration with Nielsen Singapore.

Meanwhile, Ji Hyuk Park, lead digital and e-commerce director for The Nielsen Company, added that an omni-channel customer experience involves combining loyalty programmes and shopping experiences. Consumers shopping online are looking for experiences too, and this can be enhanced using the power of AI.

To further delight consumers, the assortment of products offered online and offline should differ. Retailers, he said, should consider online exclusive products or fun initiatives such as subscription boxes to entice consumers. Nielsen revealed that online e-commerce spend has increased two times in Singapore within a year with diapers leading the online sales category.

Jaime Syjuco, partner, Havaianas, Moda Pacifica Group, also a speaker at the event, said retailers today are learning to gather data in a cost-efficient manner from areas such as CRM or point-of-sales (POS) to the sensors placed in stores and radio frequency identification.

However, given Havaianas has about 52 stores across Singapore, Malaysia and the Philippines, a challenge for him lies in the fast implementation of new innovations and ensuring they work across all touch-points.

To counter this problem, the company designated one store in each country to be its test lab, and for Singapore, the store is ION Orchard. He said that about 1,000 consumers stop by the store each day and sensors are installed within the store to track the number of shoppers who pass by or enter.

To tackle the rising costs of retail and maximise gains, he was personally “obsessed” in finding out why the store was unable to convert a certain number of consumers.

“If 100 people are buying from us when I paid for 900 to come in and make a purchase, I want to find out why this is the case. I engineered a lot of my data gathering and testing to see if I could tweak conversion rates,” he said.

Havaianas is not the only company to gather data from numerous touch-points.

ZALORA Group makes use of small and big data to create a uniquely tailored customer experience.

The Facebook ads that consumers see, for example, are based on their purchase and click patterns, said Nikhil Sahai, regional head of marketing analytics at ZALORA Group.

“Anywhere you go, your ads are personalised. The moment you come to our website, our catalogue is personalised for you, including the display banners. If your birthday is coming up, we will remind you that it is around the corner and have a ‘just for you’ page with the list of products that suit your preferences,” he said.

The process doesn’t stop there. In fact, ZALORA Group will continue to retarget consumers a few months after they have made their purchases.

“If you haven’t shopped for some time, you are likely to buy again and we will start retargeting you from different channels,” he added.

Landlord have a stake in data

Meanwhile, retailers are not the only ones that turn to data for answers. Landlords are also making use of data to make decisions and attract consumers. Jeffrey Loke, vice-president of pricing and commercial strategy at Changi Airport Group, said data is gathered from airlines, its CRM programme and POS to plan for the airport’s growth and decide which brands or airlines to bring on board.

“At Changi Airport, we have a lot of data. We need to clean up the data to get a single view of the customer. For example, is the person buying from our stores also a loyalty member?” he said.

When a single view of the consumer is identified, it is easier for the group to join the dots and identify beneficial insights.

Changi Airport is also attempting to draw more consumers into the stores by equipping retailers with dashboards on iPads. These dashboards enable retailers to view the top three purchases by Chinese consumers within their stores at the airport, for instance.

If there are a high number of arrivals from China during a period of time, the retailers will then be prepared to assemble more Chinese-speaking staff members on the sales floor to dish out relevant promotions for popular products.

Loke also described today’s consumers as “time-starved”. As such, rather than spending a significant amount of time browsing, they would rather just pick up what they need and pay.

To solve this issue, Changi Airport has its e-commerce portal iShopChangi which allows travellers to browse at home and add the purchase to their cart before heading to the airport, where they can pick up their items. This strategy, he said, extends online dwell time and browsing.

Although more than 60 million passengers travel through the airport annually, he said only half of them enter a store within the airport.

“We don’t take footfall for granted. We need to make sure we have the best chance of converting those who walk into the store. That’s why it is important for us to equip stores with relevant information and sales pitches, instead of hitting it in the dark,” he explained.

To help attract the other group of passengers who are merely passing through and not patronising the stores at Changi Airport, the group also worked with tenants to create an experiential shopping experience that is not available to consumers when they shop online.

An outpost space is offered to tenants to try out new beers or different types of hand cream before purchasing. Meanwhile, Changi Airport has also made use of the insights gathered from big data and focus groups to diversify its offerings. Knowing that Irvins salted egg fish skin is a hit with tourists to Singapore, Changi Airport brought the brand on board to occupy a small outlet in the airport. “The store brings in about US$600,000 of sales in a month. That outstrips stores such as Prada or Tiffany & Co. In terms of productivity, I wish we had a few more of these outlets all over the airport,” he said.

Ditch the cookie cutter ways

Retail is not just about having popular brands in malls. In fact, retail has to be fun because at the end of the day, consumers don’t like to be forced to buy. Chris Chong, deputy managing director for Singapore at CapitaLand Retail, said retail is mainly about getting people involved in the whole process.

“Gamification is therefore a very important part of how you project your brand to be fun, exciting and relevant, even though you might be an old brand,” he explained.

He added that many retailers still abide by cookie cutter ways such as having fitting rooms or cashier points. While Singapore is one of most expensive cities in the world, retailers here are operating in a market where there is a certain level of disposable income. As such, it is important for them to excite both Singaporeans and tourists.

“We are not spending enough time considering important questions such as customising retail concepts to suit consumers in Singapore.”

Like Changi Airport, CapitaLand Retail has also been carrying out experiential events at its malls such as holding a “summit” between Donald Trump and Kim Jong-un impersonators at Bugis Junction in June this year.

As for the fashion segment, CapitaLand Retail tackles the competitive industry through online collaborations. In August last year, it partnered with Lazada Singapore to launch an exclusive online mall, providing shoppers with an omni-channel experience as they were able to shop online and collect their purchases in CapitaLand malls. This strategy benefits the Singaporean consumers as well as tourists who purchase online through Lazada Singapore, further reinforcing the convenience factor.

“Retailers need to expand beyond the Singapore demographic,” Chong said.

Creating a personalized experience

Artificial intelligence is also another factor that helps retailers offer a better customer experience, with companies such as H&M and North Face using chatbots to service consumers and provide recommendations. The rise of voice assistants such as Amazon’s Alexa also increases the convenience factor and redefines one’s shopping experience. With the proliferation of digital and how fast-paced the industry is moving, retailers need to predict what is coming next and innovate accordingly.

John Lu, director of lifestyle, sector transformation, at IMDA, said retailers can innovate and curate a seamless customer experience by learning how to blend food, hotels, tourism and retail. “Technology will be an enabler to support this mindset we want to put out there,” he said.

He cited the digitisation of Kampong Glam as an example. In July, the neighbourhood launched five initiatives in its first phase of a neighbourhood transformation project to help traditional businesses in that area succeed in the digital economy. The initiatives included e-payment methods, digital maps and virtual in-store tours, as well as an efficient and integrated point-of-sale system.

While efforts are being made to help brick and mortar businesses remain relevant in today’s economy, he admits Kampong Glam is a challenging area to work on because of the traditional nature of the merchants. Also, a balance between digitising Kampong Glam, while maintaining its culture and heritage, also needs to be achieved.

Meanwhile, Jeremy Tan, CEO of Liquid Group, said while technology would play a role in boosting consumer engagement, retailers still need to be certain about what their objectives are and the outcome they are seeking.

“I think the idea is why do you need it? If you focus on that and work backwards and realise there is an opportunity to get sales, then you start from there,” he said.