Enterprise
Changing the mindset of retailers
Behonce Beh 
The retail experience will evolve in time alongside trends and market needs
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NO buzzwords or technology jargons. Just pure, simple, good customer service. That is and has always been the crux of the retail industry.

While it is true e-commerce has impacted offline retailers’ earnings, this doesn’t mean it lacks the tools to make the shopping experience great again.

CPN Ventures Sdn Bhd chief operating officer Anthony Dylan says that most items offered in a shopping mall are often similar to those sold in other shops, so retailers can differentiate themselves through the experiential component of shopping.

“You may have the same brand across many stores but the human touch differs as the person managing each store is not the same.

“The key to today’s business is marrying technology and customer service to create that experience,” Dylan says.

CPN Ventures is a shopping centre management company with its latest project soon to be launched in Shah Alam, Selangor

 

Engaging customers

Dylan argues that gadgets may help improve the in-store sales process, but engaging with customers directly is the way to go.

“For example, simple things such as having a porter to load purchases made by parents with young children helps.

“Parents can then focus on minding their children while the porters help to load their shopping into the car. This makes a huge difference to reduce the customers’ pain points,” he says.

Meanwhile, Productivity Nexus for Retail and Food and Beverage (F&B) chairman Datuk Bruce Lim estimates there are over two million people working in the retail sector, and not all of them are productive.

Lim says retailers cannot maintain their "business-as-usual" mindset

“The retail industry contributes roughly 8% to the country’s Gross Domestic Product while the productivity level stands at 1.8%, or RM 64,000 per employee per annum, compared to the ICT sector at 3% and above,” he says.

Productivity Nexus for Retail and F&B is a government-and-private led initiative through a one-stop centre that assists enterprises to boost productivity, increase innovation and capture growth opportunities.

Such low productivity figures beg the question as to why some retailers still resort to having staff distribute flyers at high traffic areas as opposed to using social media, growth marketing or targeted advertising to attract shoppers.

Though some may argue that the use of technology helps combat the decline of talent in the retail trade (see sidebar), more needs to be done to improve customer service and engagement.

 

Existing practices

It is pertinent to recognise that in-store sales have dipped over the years as the frequency of purchase reduces.

A customer who previously purchased five cups of coffee to go in a working week may cut down purchases to two a week.

In such instances, it is important for staff to recognise buying behaviour and upsell higher margin items such as pastries at the point of transaction.

“I feel retailers are taking the easy way out by saying because shoppers do not spend, the sales equation reduces. It is relative to how retailers think about their current situation,” quips Dylan.

The 80:20 rule of how 80% of one’s business could come from 20% of loyal customers has some truth to it, as retailers continue to push out loyalty and customer retention programmes.

From membership cards to mobile applications that allow shoppers to collect points or stamps to achieve a certain reward, the methods are still relevant to bridge the gap between purchase and redemption.

“People want instant gratification, and consumers want fewer processes to get achieve their desires.

“We have seen in credit cards where users opt for cash back as opposed to double reward points. The same trend can also be seen in retail,” says Dylan.

The retailers’ tiered reward system needs to be in line with customers’ spending patterns as not many shoppers are keen to spend more to redeem a measly gift or discount.

The push to drive lower tier shoppers to spend more often should be considered by retailers when structuring their loyalty programmes. 

Dylan says retailers that solve customer pain points perform better


Lower prices

Dylan says one of the many reasons consumers shop online is because of lower prices. However, that may not translate to quality.

“There will come a day when shoppers would not mind paying more for quality.” And when that time comes, retailers must be there to cater to them.

Beyond product-based retail stores, service-based retailers offering medical, education, and fitness are already taking up space in many shopping malls.

“Shopping centres have evolved into congregation points. So apart from selling products, retailers must provide solutions that cater to customer needs,” he says.

Cafes, once a place to have a quick bite, are now common to hold business meetings and broker deals.

It is then up to the business owner to take advantage of such changes by becoming more of a place that sells beverages.

Without support from a great team, a retailer will likely be stranded and remain stagnant in the digital economy.

Managing young retail talent

MORE often than not, shoppers are greeted in stores by foreign staff who may not be of much help due to communication issues.

Though the government has long pushed for retailers to hire local talent, youths are generally not keen to take up a role that confines them to a small space over long periods of time.

Productivity Nexus for Retail and Food and Beverage (F&B) chairman Datuk Bruce Lim argues that retailers need to position their brand as an employer of choice among young people.

“Not many locals want to work in retail unless it is a sexy, foreign brand or an establishment with some sort of culture such as cafes.

“They (youths) do not want mundane jobs such as stacking shelves. Hence there is a need to offer them innovative roles.”

Lim says retailers must provide a sense of ownership and empowerment among the team, and more often than not, it boils down to how bosses treat their staff.

“It is no longer about the job scope but how retailers position the role,” he says, citing how a local tea chain is able to attract talent as its stores are positioned as a cool place to work rather than the mundane job of preparing beverages.

A mindset change among entrepreneurs is crucial should they want to stay relevant. Bosses who are stingy about staff training due to fears of them leaving will soon realise that they are not fully utilising their staffs’ potential.

“The truth is that all staff will leave at some point. But we need to make sure the people we hire have the qualities to take the business further, hence the importance of training and empowerment,” Lim says.



This article first appeared in Focus Malaysia Issue 278.