The popularity of ‘click and collect’ has grown among consumers worldwide as it offers them more flexibility in retrieving their online purchases. More importantly, the reason why consumers prefer this last mile method is because they avoid the delivery fee.
A growing number of companies like Japanese fashion retailer Uniqlo are letting customers pick up online purchases in 400 of its 500 stores in China to help tackle problems such as delayed deliveries. Retailers generate foot traffic and sales to offline stores.
67% of shoppers purchase an additional item while collecting their items in store.
It’s no wonder 51% of CEOs plan to offer click and collect in the next 12 months, while investment into same-day delivery only attracts 31% of them.
However, retailers need to keep in mind that to provide a positive experience for consumers using the service, simply relying on existing infrastructures such as the physical store isn’t enough.
Here’s what you should know:
1. Alibaba and Tencent similarly launch campaigns to wins over cashless customers
As Chinese’s adoption for cashless society grow, the competition heats up between the two leading mobile payment giants, Tencent’s WeChat Pay and Alipay by Alibaba.
Both company have pushed out marketing campaigns to promote their respective payment apps. Alipay named the week beginning August 1 “Cashless Week”; on the same day, WeChat Pay (under Tencent Holdings) picked one day—August 8—and declared it “Cashless Day,” and also nicknamed the entire month “Cashless Month.”
During the campaign period, both apps provide consumers with real-money incentives to reward them for going cashless shopping with their apps.
So far, Alipay still dominates the market as 80% of Chinese consumers are using Alipay as the primary mobile payment app in China. WeChat Pay’s adoption rate is 25%.
Read the full story here.
2. Uniqlo launches vending machines for its clothes
The company are launching vending machines called Uniqlo To Go for its items of functional clothes.
The first venue chosen for the machine is the Oakland International Airport in California, and Uniqlo will roll out nine more at airports and shopping malls around the US, this month.
The machines can also give Uniqlo insight on US consumers, which Uniqlo has been trying to reach—not always successfully—for years. Currently Uniqlo is the third largest brand, behind H&M and Zara.
Read the full story here.
3. Tmall wants to bring ‘car vending machines’ to China
Car-shopping in China might be getting easier as Tmall is looking to bring ecommerce experience of buying cars to the next level with the “Automotive Vending Machine.”
According to Yu Wei, general manager of Tmall’s automotive division, the company hopes to launch the first such vending machine in China later this year. There is currently one operated by another company in Singapore.
Customers could also pay it in installments through Alipay if they have over 750 points on Sesame Credit, Alibaba’s credit-scoring system for consumers.
Read the full story here.
Here’s what you should know today:
1. Singapore-based Tyrepac entered Thailand
Singapore-based online auto tyre retailer, Tyrepac has made a foray into the Thai market via a partnership with Toyota Tsusho. Thailand is the fourth country that Tyrepac has entered.
Launched in 2008 in Singapore, the company is Asia’s first and largest online tyre retailing website focusing only on car tyres. Thailand’s efficient ecommerce logistics infrastructure make it the right destination for their expansion.
According to Takahiro Arai, General Manager of Toyota Tsusho APAC, the country’s tyre market see about 15-20 million tyres replaced annually or 1.5 million per month.
Read the full story here.
2. Uniqlo’s operator Fast Retailing Co recorded 69.1% profit rose
Fast Retailing Co. said on Thursday its consolidated September to May net profit rose 69.1% from a year earlier to 120.11 billion yen ($1.1 billion) driven by cost-cutting and overseas sales.
“The ratio of operating profit to sales in China, South Korea and Southeast Asia are almost equivalent to that in Japan and it’s even higher in some countries. (The Asian region) is becoming the pillar of growth,” Chief Financial Officer Takeshi Okazaki said.
The group kept it earnings forecast intact for the business year through August, projecting a net profit to more than double to 100 billion yen or $881 million.
Okazaki add that ecommerce sales are likely to be the growth driver going forward.
Read the full story here.
3. Recommended Reading: eBay ShopBot know what you like and feeds you trendy suggestions
Japjit Tulsi, VP of Engineering at eBay, explained some of the machine learning characteristics of the well-known bot, which debuted in October 2016 on Facebook Messenger.
With ShopBot, users can browse curated suggestions but almost seems like there is a human agent sending the suggestions. AI in the ShopBot also “remembers” you, including your size and brands preference. This is the example of how shopping general will change in the next few years as ecommerce keep expanding.
“Our goal is to build an AI platform that enables truly personalized shopping and provides a service that is better than what the best human sales assistants can offer customers today,” he added.
Read the full story here.
Japanese-based fast-fashion designer, manufacturer and retailer owned by Fast Retailing Co., Uniqlo has been providing “made for all” wardrobe staples to global citizens since September 1974.
Feeding on the thriving minimalist culture in Japan and need for closet essentials around the world, the fashion brand’s net sales came to $15.7 billion, up 6 percent from the previous year. Uniqlo has long associated itself with affordable clothing that speaks volumes to the Japanese values of simplicity, quality and longevity.
As GQ commented, “even when the Japanese retailer goes for hype, it doesn’t ever get weird,” following a collaboration the company did with French designer Christophe Lemaire that bore gray hoodies and white sneakers.
The rainbow array of t-shirts, big name collaborations and ever fresh S/S, W/F collections seem to be a hit as Uniqlo has 834 active stores around the world (data from June 2017). Most are in Japan, but other popular locations include the US, France, Singapore, Malaysia, the Philippines, China and Taiwan.
The company made headlines last year after reports revealed that the brand was struggling in the States – a forecast of roughly $36.31 million impairment loss on its US operations in the six months through August.
Bloomberg also reported that Fast Retailing Co. Chairman Tadashi Yanai cut Uniqlo revenue target by 40 percent to 3 trillion yen by fiscal 2020. Analysts attribute the more realistic predictions to the weakened yen, certain cultural barriers and most importantly, the rise of online players.
Other fast fashion brands such as H&M and Zara have also given Uniqlo a run for its money with aggressive market expansion, high product turnover and strong online presence. It means Uniqlo needs to keep up and the company knows it.
“We need to be fast,” said Chairman Yanai. “We need to deliver products customers want quickly.”
Despite both being fast-fashion companies and having a similar production strategy, Uniqlo and Zara are still vastly different.
“Zara sells fashion rather than catering to customers’ needs,” he said. “We will sell products that are rooted in people’s day-to-day lives, and we do so based on what we hear from customers.”
Not only has Uniqlo vowed to increase clothing production, it has also focused rigorous interest on emerging countries.
Rumours arose a few weeks ago regarding Uniqlo holding recruitment days in Ho Chi Minh City – a market already occupied by fast fashion labels such as Zara and H&M, the latter announcing a store opening later this year.
Uniqlo was also the first in Japan to implement a ‘SPA’ model – short for “specialty-store retailer of private label apparel” meaning it encompasses every aspect of the business, from design, production to the final sale.
This gives the company the ability to test new in-store technology such as attaching radio-frequency identification (RFID) tags to all products so the store system can identify which items need restocking and free up time for sales clerks to tend to customers.
Bold marketing initiatives and branding included its partnership with Muslim fashion designer Hana Tajima, to naming world professional wheelchair tennis star Gordon Reid as a global brand ambassador.
The company also allocates marketing budget to offline pop ups in premium malls. An example is a mini-fashion in Bangkok on July 12 promoting the brand’s new styles of denim.
Uniqlo is declaring to audiences around the world that it’s not afraid to stand up for a cause.
As reported by Nikkei Asian Review, Masanobu Kusaka, previous manager of Uniqlo’s Fifth Avenue store in New York in 2015, realized that Uniqlo’s true rivals were somewhere else. He also witnessed the sudden closure of some of those shops. The culprit? Online retailers.
Kusaka began by improving the company’s existing digital assets starting with the app first. His team added functions that displayed the user’s purchase history and recommended matched clothing sets.
The company’s online sites have also expanded their product sizes – a huge limitation for brick and mortar stores – and offered XXXL to accommodate Americans.
Uniqlo also focuses on upholding a strong omnichannel strategy across its retail footprint. The company plans to open over 200 stores in China and Southeast Asia alone as the company reported same-store sales in Indonesia, Thailand, the Philippines and Malaysia posted double-digit growth in the first half.
Chairman Yanai hopes that customers will find convenience from the company’s new service where shoppers can visit any Uniqlo store, get fitted for a particular item of clothing, order it online and have it delivered to their homes straight from a warehouse.
“The ability to provide anybody, anywhere, anytime with the ultimate, high-quality day-to-day clothing will set us apart,” he said. “We want to deliver products that customers want quickly. That’s why it’s Fast Retailing.”
Chairman Yanai, Japan’s richest man, said in April 2016 he wants to expand Fast Retailing’s ecommerce worldwide, with an initial target for online sales to make up 30 percent of total revenue, up from 5 percent currently.
Given the rising popularity of online retail and the brand’s quick strides to innovate, it doesn’t seem too farfetched.
Workers aged 30-34 claim the highest average gross income levels in the Philippines. And as the relatively young population is set to see a surge of middle class households – especially the single person household – for the next 13 years, strong growth is predicted for the following industries: clothing, footwear, hotels and transport.
Despite an increase in the middle class, the social class E (lowest income class) still remains dominant and represents a bigger market for low cost food, housing and apparel.
The impact of the increasingly affluent Filipino shopper should not be overlooked by global brands as the current focus of many companies is trained on larger markets like Indonesia and Thailand. Traction in the market could easily be tested through a social media campaign as Zara did for Thailand as Filipinos are highly active on social channels. The best way to reach new consumers is through a channel they are already highly active on.
Japanese clothing brand Uniqlo and Nestlé are two global brands that stand out in the Philippines through social media campaigns to attract the country’s almost 40 million Facebook users, a number that is expected to jump to 47.5 million next year.
Nestlé’s Facebook rewards scheme that was launched in 2011 encouraged followers to invite friends to ‘like’ the page in order to win points and prizes. The coffee brand also sells on Lazada and incentives shoppers on Facebook with discounts and promotions.
Earlier this year, Nestlé was awarded by Youtube for releasing one of the most popular Youtube ads in the Philippines. Some other popular campaigns include:
Uniqlo, on the other hand, has been speedily launching offline stores in popular shopping locations but does not currently offer ecommerce in the Philippines. The company’s recent and successful launch of its shoppable website in Thailand could persuade the brand to move forward with a similar strategy as the markets share similarities.
As ecommerce in Thailand is aggressively propelling forward, even companies with a rich traditional heritage such as Somjai, one of Thailand’s oldest and most famous stationery store chains, are going online to grow their sales channels.
And there is good reason for that – the number of customers shopping online is steadily increasing. According to Statista, 12.1 million consumers in Thailand are expected to make purchases online this year. This number is projected to grow by 15% within the next five years reaching 13.9 million in 2021.
In Thailand, 4.4 million online shoppers are 25-34 year olds and are followed closely by 3.9 million online users aged 16-24 years.
These two age brackets together make up two thirds of all online shoppers and the ratio is projected to remain consistent in the medium term.
Overall, it is forecasted that within five years, every fourth Thai will shop online, up from around every fifth now.
But ecommerce user growth in the Land of Smiles is not even the fastest in Southeast Asia. In Indonesia, ecommerce user penetration is expected to almost double from 2015 to 2021. However, the amount customers in Thailand are expected spend on average online is predicted to soar.
In 2021, an online Thai buyer will spend $382 per year, which is 57% more than the expected spending of $243 per user in 2017.
What to keep in mind?
More online shoppers means more potential customers for businesses with online channels. Understanding the trends of what, when and where these customers buy is essential to capturing more of them going online.
- Thais have more money to spend on shopping as Thailand has the third highest GDP per capita in the region after Singapore and Malaysia.
- More companies in Thailand are seeing the benefits of an omni-channel strategy such as Zara, Uniqlo, Adidas who have invested in their own brand.com in addition to offline stores.
- The tech-savvy generation (16-34 year olds) is accustomed to online shopping both on social media, e-marketplaces/brand.com.
- Spending power will continue to rise and two-thirds of consumption growth in the period to 2030 will come from increasing per capita spending.
- Research reports, tools such as Google’s Consumer Barometer and eIQ articles provide useful insights on Thailand’s online shoppers’ behavior and trends.
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