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Embracing The Future of E-Commerce in 2021 with Omnichannel Retailing

January 29, 2021

After almost a full year of battling the unseen virus, one collective aspect that many of us wish for better odds of is a recovery from the COVID-19 pandemic. In light of that, the second week of January marked Indonesia’s achievement of a notable progress as the people witnessed the first ever COVID-19 vaccination conducted for President Jokowi along with a number of public figures. The first vaccination is planned to proceed with an even distribution nationwide, targeting 1 million people to be vaccinated each day.1 This plan becomes a new year resolution with the highest priority, in hopes of attaining herd immunity and reviving the gears of our economy.2

In the meantime, the rate of positive COVID-19 cases in Indonesia has regrettably not been declining. This has led to the government once again imposing large-scale social restrictions in areas with the highest surge in cases; the Java and Bali provinces.3 Since the 11th of January, the provinces have once again complied with reduced operational business hours and capacity, inflicting worries from retail owners who had to recalculate their operational costs. Particularly, shopping malls that are only allowed to operate till 7 PM causes retail brands to miss the peak hour of visitors and risk a deficit.4 In a situation with this much uncertainty, brands need to figure out the right strategy for their business while the clock keeps ticking in 2021; one that would still optimize their existing offline resources, but also expands their market reach beyond their offline store’s region. That being said, brands need to start exploring the omnichannel strategy.

In contrast to the conventional belief that shifting one’s business online means sacrificing the offline operations, the omnichannel strategy actually bridges the gap between online and offline operations. As many brands, retails, and now even suppliers have been moving their sales operations online due to social distancing measurements, their supply chains and fulfilment processes have rapidly been redefined.5 As opposed to facing a dilemma between focusing on the online or offline path, brands can opt to make them complement each other, allowing the business to maximize all the available resources. However, if instead the dilemma lies in the effectiveness of selling online, here’s some good news to ease the mind:

People are shopping online.

The merry back-to-back online shopping festivals during Q4 last year became a runway for Indonesian consumers to take off and freely roam in the e-commerce breeze.6 During moments where no grand promotions or campaigns were taking place, consumers were apparently still conveniently shopping online and checking out their daily needs with ease. SIRCLO’s data findings reveal that during the first week of large-scale social restrictions, products that fall under the Personal Care category were sought after the most and experienced a 12% increment compared to its previous week prior to the enforcement of PPKM (Pemberlakuan Pembatasan Kegiatan Masyarakat) or Community Activity Restrictions. When being compared to the festive season from Q4 of 2020, these products still managed to experience up to 9% of increment on the days with no shopping festivals taking place.

The order increment in recent times has not been as high as that of the end of Q1 or early Q2 of 2020, considering that plenty of offline outlets have now been able to operate with more leeway instead of having to shut down entirely. That being said, the people’s interest to shop online has been⏤while not necessarily skyrocketing⏤emerging in a gradual manner. Furthermore, the enthusiasm for the Personal Care category has steadily been holding its position as the most sought after category in e-commerce since the pandemic hit.

This phenomenon has signaled that online shopping for consumer goods, be it from the Personal Care, Household Goods, and now also Health category have become the “new normal” form of household spending. Increasingly known for its attractive promotions and hassle-free process,7 e-commerce is well on its way to become the people’s favorite shopping center. The order surge during the first week of large-scale social restrictions reflects just that. It is also forecasted that the overall situation will push those who are most vulnerable to the virus to start shopping for groceries or other daily needs using online means for the first time this year.8

Being omnipresent is a true valuable investment

As the market continues its accelerated pace in shifting the demands online, new expectations are also projected to surface. Hence, brands need to be able to keep up. According to a recent study by Resulticks,9 Southeast Asian consumers are growing increasingly tech-savvy and ‘channel-agnostic’. This implies that the consumers expect to receive a shopping experience that is “individualized” and “real-time” across multiple channels of their preference.10 In other words, Southeast Asian consumers are already starting to expect an omnichannel shopping experience. Therefore, on top of maximizing resources, brands that adopt the omnichannel strategy will also be able to cater to these forthcoming expectations and have a more likely chance to thrive in the future.

On the customer’s side, omnichannel is the strategy of using multiple marketing channels integrated in a way which affords the customers a seamless front-end experience. These varying channels include websites, mobile browsers, native apps, physical retail, social media, email, and more.11 In creating that seamless experience, the aspects in all of these varying channels need to be in sync, such as product stock, account information, order tracking, advertisements, loyalty programs, and so on. On the business side of things, this integration allows the brand to have a wide range of shopping touchpoints that are catering to more demands⏤meaning that the products in their inventory gets to be circulated more widely. For businesses that sell perishable products, this can be the right recipe for sustainability.

A 2017 study of 46,000 shoppers in the US by Harvard Business Review found multiple benefits that the omnichannel strategy can bring to brands alike. This all unfolded in the same year where the omnichannel strategy was at “an all-time high” due to its high rate of adoption among retailers and its ability to give brands a competitive edge to lead the market.12 It is apparent that customers who use more than 4 channels actually spend 9% more in the store compared to those who only used one channel. Apart from the bigger shopping baskets, omnichannel shoppers were also more loyal to the brand and are even more likely to recommend the brand to family and friends than those who only used one channel due to the seamless experience they enjoy.13 Simultaneously, the customers’ continuous connectivity to the brand’s touchpoints can further enrich the analytics that brands can apply in moving forward.14 That way, important aspects of the business and big decisions can all be supported by holistic data.

Case studies

The US retail landscape has long been introduced of the omnichannel strategy, paving the way for multinational brands across diverse industries to create fluid experiences unique to their brand story. Nike, the international sportswear brand, has been improving their US shopping environment by stitching up their app with their store technology to provide the highest quality of experience for customers in their loyalty program, NikePlus. Putting the omnichannel strategy into effect, Nike keeps their customers and offline stores tight through their hyper-connected app. When a NikePlus member opens their app, they are informed of the Nike stores that are in close proximity as well as updates about the store layout. When they actually visit a Nike store to shop, the app also becomes a useful tool as it has a built-in barcode scanner to order sizes and have them delivered to the fitting room, taking the offline store experience on another level.15 Brands such as Disney, Starbucks, and Bank of America have also strived for the highest quality of experience by applying the omnichannel strategy.16

The omnichannel strategy’s effectiveness and favorability in the US market has influenced the Southeast Asian market as well. Resulticks’ study further indicates that 82% of firms in Indonesia, Thailand, Vietnam, and Philippines are open to improving their customer engagement by employing an omnichannel approach.17 Among players in the industry, MessageBird, an omnichannel customer service tool, evaluates Indonesia as a market with a high potential.18 Over the decade, ICUBE by SIRCLO that started their business journey in offering tailored e-commerce services in the US have brought their omnichannel expertise to Indonesia to help more brands employ the strategy. ICUBE by SIRCLO has helped brands from the fashion, beauty, home living, FMCG, and varying other industries in creating their own e-commerce platform to keep customers at the core of the business.

One noteworthy case study of omnichannel application in Southeast Asia is by Transmarco Group, a leading footwear and lifestyle retailer that manages various global and their own expansive range of brands; Hush Puppies, LeSportSac and Caterpillar, Obermain, Robelli, and many more. They operate across Indonesia, Malaysia and Singapore through over 800 distribution points, multiple websites, and marketplaces. To be managing each shopping touchpoint is perhaps feasible, but integrating them with one another will provide the customers the seamless experience they seek in addition to making the business processes run more smoothly. As a baseline in pursuit of becoming the market leader, Transmarco decided to adopt ICUBE by SIRCLO’s centralised omnichannel solution for ease of management and visibility in the shopping hub for the brands they manage; 9to9.co.id.19

With ICUBE by SIRCLO’s solutions, Transmarco’s orders from all distribution points (offline and online) are aggregated into a single view to keep real-time stock availability across all shopping points. Customers are also able to shop online and it will be shipped from the nearest store. This enablement can contribute to more efficient shipping fees, eliminating the worry of expensive costs during the customers’ purchase decision. Among numerous other technical features to support scalability, the 9to9 website is also integrated with an array of payment gateway extensions to cater the preferences of each country; Indonesia, Malaysia and Singapore.20 Thus, aside from merely expanding the business within the nation, the omnichannel strategy is even possible to cater to the needs of brands who operate on a multinational scale.

In conclusion, brands in Indonesia that are operating in the Southeast Asian market need to brace what’s coming and what’s demanded in the near future. However, while the benefits of being omnipresent is going to change the dynamics to the better for the brands that adopt it, integrating numerous resources as well as channels⏤not to mention online and offline⏤does not happen instantly. Implementing the omnichannel strategy means breaking down all the separate business aspects and turning the complex business environment into a centralized one. The process will surely take time and require the substantive expertise of a dedicated team. Additionally, each sub-division supporting the business needs to also work together to achieve the desired seamless integration.

Despite what needs to be done behind the scenes, the benefits of omnichannel strategy can take retail brands further into the future, especially during a pandemic with many limitations. To consult on the ways your brand can achieve it or even straightforwardly take the leap to be omnipresent, visit icubeonline.com.

As Indonesia’s leading e-commerce enabler company, SIRCLO’s responsibility to restore the distance between brands and consumers has been greatly heightened in 2020. While parts of the world slowed down due to the pandemic, e-commerce called for a faster pace as it became the people’s solution for needs fulfillment. In stepping into 2021, we hope to conquer whatever challenges the future may bring and to also help business owners everywhere do the same. May the new year start with fresh opportunities and the hunger to achieve more. Happy new year!

Disclaimer

SIRCLO neither provides regulated advice nor guarantee results. The materials we convey reflect general insight and best practice based on information currently available, and do not contain all of the information needed to determine a future course of action. Such information has not been generated or independently verified by SIRCLO and is inherently uncertain and subject to change. SIRCLO has no obligation to update these materials and makes no representation or warranty and expressly disclaims any liability with respect thereto.

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