Return on Experience: Prioritizing Customer Experience – Takeaways from AIBP Insights Philippines

The morning session of AIBP Insights Philippines Day 2 “Return on Experience – Prioritizing Customer Experience” featured key observations of efforts to improve customer experience in the Philippines from companies including Zalora, Carmen’s Best Ice Cream, Dole Packaged Foods, Kimia Farma, Gojek and DFS Venture, along with inputs from solution provider Magnifi Machines.

AIBP Insights Focus group discussion

AIBP Insights is a series of country-focused sessions held online which brings together a focus group of ASEAN stakeholders to discuss topics related to enterprise technology adoption in the region. AIBP Insights will be held across Malaysia, Philippines, Indonesia, Thailand and Vietnam over a course of 5 weeks. The agenda is available here.

Consumer Behavior and its Implications on Customer Experience in ASEAN

In the Philippines, e-commerce is projected to grow 24 times to top $12 billion by 2025. More importantly, the COVID-19 pandemic has changed shopping behavior in the Philippines and this new normal will persist past the pandemic. The gradual shift to online shopping has been accelerating in the past year, and this shift is observed across multiple age and income segments in the Philippines. In response, enterprises are displaying increased urgency to explore e-commerce and e-business models today.

Our panelists generally agreed that while e-commerce will continue to grow, traditional brick and mortar retail is here to stay, and that business will have to adjust to new ways of doing business by integrating the old with the new.

As Omnichannel retail grows in the region, how can retailers make use of data collected from digital and physical channels to  improve the retail experience and address the rapid shift in consumer behavior?

How are E-commerce Unicorns and Traditional Retailers Adjusting to New Consumer Behaviors?

Zalora and Gojek both observed that e-commerce adoption has been accelerated in recent years, with a strong rate of increase in new customer adoptions and e-commerce adopters. Retailers like Carmen’s Best Ice Cream, DFS Venture, Dole Packaged Foods and Kimia Farma are increasingly exploring their options in e-commerce.

Paolo Campos, founder and Managing Director of Zalora Philippines highlighted that the diasporic use of social media which has been around in the Philippines since the 2010s is a key driver of e-commerce and it was only a matter of time before the trend was translated to e-commerce. He believes that e-commerce is taking root in the region much like how it did in China in the 2010s.

Changing Customer Needs and Expectations

Product and services offerings have changed due to changing customer expectations. While Zalora has traditionally been focused on fashion retail, they have expanded their product offerings to include essentials, beauty and home and living products to cater to consumer needs. Gojek operates with a similar mindset: to provide products and services focused on reducing life’s daily friction. The company which started out as a ride-hailing service has since built an ecosystem to include products and services in food, groceries, payment systems.

Addressing the Impact of COVID-19 on the Retail Industry

William Kusuma, Head of Mall Partnership at Gojek revealed that Gojek has been furthering existing partnerships with shopping malls by assisting in their shift from offline to online and using Gojek apps to enable nimbler responses during the pandemic. Jonie Tan, Head of Business, Magnifi Machines also shared how they are helping clients to cope with COVID-19 restrictions by reducing power consumption, drawing consumer traffic from other platforms, and some clients choose to strategically downsize outlets

Traditional F&B retailers like Carmen’s Best Ice Cream had to reduce the number of outlets in malls during the pandemic. Paco Magsaysay, Founder and CEO of Carmen’s Best Ice Cream mentioned that while they were initially hesitant to come onboard e-commerce, it became necessary to rethink their sales strategies due to lockdown regulations in the Philippines. 

For DFS Venture whose primary customer base is the mainland Chinese comfortable with online shopping, Kaiming Lau, Director, Strategy – Digital, of DFS Ventures shared that the potential of e-commerce was pre-existing. He also believes that it is possible for Southeast Asia to embrace online shopping with the widespread adoption of mobile phones and adjustments to daily life brought about by COVID-19. Likewise, Banjo Castillo, General Manager of Dole Packaged Foods agreed that opportunities in the Philippines are abundant and there remains much to be done for online shopping. 

An important point about the impact of COVID-19 on 2 different groups of people was brought up by Banjo  – the insulated and uninsulated group. Insulated groups are able to remain employed and continue their spending and buying habits unlike uninsulated groups who are living on very tight budgets face a retail experience where they are unable to do so. 

New issues to address in the retail customer experience are no longer just about omnichannel presence but also about backend product developments and operations. 

The New Retail Business

Our panelists generally agreed that besides omnichannel presence, prioritizing customer experience and driving innovation now requires the adoption of a customer-centric point of view, listening to target consumer segments and understanding what they need in their lives in different contexts. There is a general observation that businesses and merchants across multiple categories are now more open to e-commerce.

New Product Offerings and Sales Channels

Dole Packaged Foods and Carmen’s Best Ice Cream both developed new product offerings in response to changing consumer preferences. Dole sought to cater to lower-income consumers by launching the cheapest 100% juice on the Philippine market, while Carmen’s Best catered to the upper market with alcohol-infused ice cream products. 

Most panelists have also relooked their supply chains and distribution channels by exploring community resellers, online marketplaces and Facebook and Instagram shops. 

Partnerships for Customer Experience 

In general, our panelists agree that business partnerships must bring value to multiple players as they grow together. 

Businesses might find digital adoption difficult to endeavor. However, it will be necessary to keep up with the evolution of customer behavior to remain competitive. Gojek assists them with digitalisation through solutions like merchant apps and blanket promotions. Digital technology can support business operations like marketing, logistics and customer tracking. OT Ponangsera, Head of Digital Business at Kimia Farma shared that the pharmaceutical company partnered with GoMart to launch their e-commerce platform. 

Initially relying on 3rd-party logistics providers, Zalora went a step further to set up its own delivery fleet which has since spun off as Entrego to become one of the largest last-mile delivery services in the Philippines.

Banjo highlighted the importance of adopting a lean mindset in digital adoption for traditional businesses. For Dole which had no online presence to be able to achieve stable online presence and digital use in the span of less than a year, they had to “jump into the deep end” of digitalisation. 

Jonie also shared that solution providers are available to help clients with identifying their business needs and assisting in subsequent migrations from offline to online. 

The Future of Retail 

Key aspects of the future of retail will be customer-centricity and omnichannel features like integrated online and offline operations. Both Banjo and Jonie think that starting out on a smaller scale or on subscription bases is possible for digitalisation. 

The key to achieving returns on experience is being able to identify their needs and concerns to embark on the right digital initiatives while keeping costs in mind. Technology adoption is not just about reducing costs – it has a plethora of other functions beneficial for businesses.

Watch the full discussion here.

We will be hosting AIBP Insights sessions for Philippines, Indonesia, Thailand and Vietnam over the next few weeks. Feel free to register interest if you are interested to participate in our sessions.

Asia IoT Business Platform

13 October 2020

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