Retailers urged to harness value of switch to integrated sales

Smart retailers should use such blended strategies to “give customers a seamless, consistent experience, whether it’s in-store, online or through a mobile device”, the Thai Retailers Association (TRA) says. “Moreover, they will gain a better understanding of customers through integrated data collection and analytic tools.”
This seamless experience via the multi-channel approach bridges the divide between shopping online via a desktop or mobile device and visiting a bricks-and-mortar store, or indeed, the use of a phone, its proponents say.
Chatrchai Tuongratanaphan, TRA director, said the retail trend of this year was moving from segmentation to fragmentation. 
Convenience stores, he said, would be fragmented into many speciality stores to lure individual shoppers; these would take the form of convenience food stores, convenience health and beauty stores, and super-convenience stores.
Chatrchai envisages that health and beauty stores will be fragmented into drugstores, health and personal care stores, and beauty stores. Home-improvement centres will be fragmented into stores for the likes of construction materials for building foundations, built-in furniture, movable furniture and do-it-yourself outlets.
He said that under this scenario, the new format of “hard discount store” was born, featuring limited assortments and limited national brands with “special buy” products and shelf-carton displays. They would provide a trolley-rental service but offer no bags.
“Under this trend, online shopping will grow rapidly at between 15 and 20 per cent per annum, compared with only 3-5 per cent for on-ground shopping, such as at department stores, and 5 per cent for on-air activities, such as TV shopping,” Chatrchai said.
“The integration between on-ground and online shopping to become omni-channel will be an important step that needs to be addressed by any modern retailer,” he said, adding that technology and payment systems would be the spur for growth in online retailing.
He said the first-tier modern chain stores would expand across the border to Thailand’s Asean neighbours. The second-tier provincial retailers would expand rapidly across their home territory into other provinces and regions.
Chatrchai said accurate demand forecasts and speedy delivery would be very important drivers for retail success.
Punyapon Tepprasit, chief executive of MVP Consultant and lecturer on international trade at Sripatum University, said Thai retailers were facing a better trend this year compared with a few years ago, especially in sports goods and other consumer goods. They will benefit from a government decision to reduce corporate and personal income-tax rates this year. Sellers of fashion items will also be beneficiaries if customs duties are also reduced.
Punyapon said the challenge for retailers was how to reduce costs in product and services management and marketing. The creation of an online marketing channel is also vital.
Retailers should make use |of analysis of operational processes from upstream to downstream, drilling down into areas such as waiting times, product defects, cost overruns and non-value cost. 
These efforts, along with improved communication systems, will improve the product and information flow for areas such as customer-order fulfilment.
The customer-order fulfilment will have an impact on the bottom line, reducing operating costs and raising the margin that directly affects net profit, Punyapon said. The main challenge is “how to transform the business to a digital channel [as quickly as possible] and in harmony with the government’s ‘Thailand 4.0’ policy” promoting digital advancement, he added.
This channel will help retailers cut marketing costs and expand their markets, creating opportunities for increased sales and revenue. 
Before a retailer sets out to create a digital channel, Punyapon said, “it must identify the new customer segmentation and new customer targeting, then choose the segmentation and targeting that conforms with the organisation’s products and services”.