Tectonic shifts in consumer habits are underway, according to a retail playbook by software solution company VMware, and consumer-centric experiences are a key differentiator in retail.
“The pandemic has redefined retail in Southeast Asia (SEA) and the Philippines is no exception to this,” said Walter So, VMware country manager, in an e-mail to BusinessWorld. “Filipino consumers have clearly indicated that they not only hope but demand that retail organizations meet their expectations for digital experiences.”
The Digital Frontiers 3.0 Study highlights trends among Filipino shoppers, including the use of virtual technology in consumer experiences, and the preference for brands that commit to sustainability.
Forty-one percent of SEA consumers do not miss in-store shopping as much as they thought they would, the study found.
In the Philippines, 66% of consumers welcome the advantages virtual technology brings, such as its ability to simulate what an item looks like on them, or how an item will fit in a desired space. This makes them more open to virtual technology than their global counterparts in the US (43%), France (43%), Germany (32%), and the UK (45%).
More than half (58%) of Filipino consumers have also said they prefer shopping with a fashion retailer that already knows their clothes size and color preference. This contrasts with the sentiments of those in the US (27%), France (40%), Germany (23%), and the UK (19%).
Despite embracing these new artificial intelligence (AI)- and cloud-powered experiences, survey respondents said they are prepared to switch to a competitor if a digital experience is not up to par (60% in SEA, 50% in the US, 40% in Germany, 36% in France, and 51% in the UK).
“In SEA, businesses are now facing their ‘sink or swim’ moment of leveraging cutting-edge innovations such as cloud and modern apps to redefine how they connect with customers digitally, or risk losing them to a competitor,” Mr. So said in a press statement.
“Apart from making sure that they are delivering hyper-personalized, seamless digital services, retail organizations now also have to focus on bridging the gaps in their offline and online operations and delivering a superior omnichannel experience to stay competitive in the digital economy ahead.”
Cloud technology may provide the agility to scale the business and the data to prioritize services, added Mr. So, but it has to be underpinned with “cloud smart” principles.
“Being cloud smart means having a clear multi-cloud framework aligned to our business goals. It is not a one-cloud-fits-all approach, but rather, a fit-for-purpose cloud architecture whether that be of a private or public cloud,” Mr. So told BusinessWorld. “This will ultimately enable the retailers to improve customer experience while optimizing operating models.”
Sustainability has also emerged as a differentiator, including in the Philippine market. This trend is driven by the next generation of eco-conscious consumers who see the potential of technology as a force for good, said Mr. So.
Almost two-thirds (63%) of survey respondents indicated wanting to use more digital services to reduce their carbon footprint. More than half (55%) also said they would stop engaging with companies or buying from brands if they do not publicly share their ethical policies.
Fifty-seven percent of Filipino consumers, in particular, say they are happy to pay a premium on products and services from retailers that demonstrate a commitment to carbon neutrality. This, the VMware study reported, is higher than the 43% average for the SEA region. Sixty-six percent of Filipinos, moreover, indicated their willingness to digital services to likewise reduce their carbon footprint.
Mr. So added that trust is the most valuable asset for any business.
“Amid an evolving cyberthreat landscape, businesses need to make sure that they are not only deploying plug-and-play tools like installing firewall at the perimeter of their businesses, but also adopting a zero-trust approach that protects all apps, on any cloud and device to the edge,” he said, noting that zero-trust serves as an additional layer that strengthens a business’s ability to spot security anomalies.
This principle is even more crucial for smaller businesses, as they do not have the luxury and time to recover from a host of cyberattacks, Mr. So said.
Only 36% of the aforementioned survey’s SEA respondents believe that retail organizations have given them assurance their data and information is secure.
“By baking security into all touchpoints, information technology (IT) teams within small and medium enterprises (SMEs) can gain greater visibility and control over policies that protect their business transactions and better proactively prevent, detect, and respond to threats in real-time,” added Mr. So. — Patricia B. Mirasol
Conducted between November and December 2020, the VMware Digital Frontiers 3.0 Study surveyed the behaviors, preferences, and attitudes towards digital services and experiences of 1,000 consumers per market from Southeast Asia (Singapore, Malaysia, Indonesia, Thailand, and the Philippines), the United States, the United Kingdom, Germany, and France. Findings from Southeast Asia represents an aggregated average from the five geographies included in the study.