Retail outlook for Malaysia is positive, despite global downturn
Retailers should leverage on new tech trends such as mobile, to optimise growth opportunities
THE Malaysian retail market was relatively unharmed by the global economic downturn, but few players are taking advantage of the growing role technology is playing in consumers’ lives to grow their business.
According to Tan Hai Hsin, managing director of Retail Group Malaysia, the retail market here has been sheltered from the worst of the economic downturn, with his retail consulting firm estimating 6% growth for 2014.
“In general, the retail downtrend can be attributed to external factors, such as developments in the economies of China and Europe. Local consumers are still spending, albeit with more caution,” he said.
The Malaysian retail market is estimated to enjoy 6.4% growth this year, a jump up from the RM88 billion (US$26.9 billion) in transaction volume recorded in 2012.
Tan said that businesses could still find opportunities to grow, especially via online shopping and by leveraging new technologies such as mobile apps to boost the conversion rate of customers from awareness to purchase.
He added that while online shopping transactions only accounted for 3% of overall transactions in the country, the segment was growing, with plenty of opportunities for growth via the mobile platform with more Malaysians relying on their smartphones when shopping.
When asked for data to substantiate his observations, Tan was unable to point to a specific research study, but noted that ownership of mobile devices was on the rise with more affordable models entering the market.
He added that the retail space is rapidly changing, with consumers now more savvy and tech-centric when it comes to finding out information before making a purchase decision, but few retailers are jumping on board.
“Malaysian shoppers are getting more digital-savvy as they pick up a lot of information from retailers’ websites and consumers’ sharing on social media. Retailers who want to stay competitive need to come up to speed with this new trend in order to be able to engage and capture their customers effectively,” he said.
Loyalty app shows its chops
Tan was speaking at a one-day retail seminar held in conjunction with the launch of a new feature for mobile loyalty platform ChopInk. The new feature, called Chop-Stick, is intended to encourage more consumers to review the products and services of retail outlets they patronise.
Similar to the sticker feature in mobile chat apps such as Line or Kakao Talk, the Chop-Stick feature comes in the form of fun emoticon stickers that users can use to express their support or dissatisfaction with a product or brand.
Ho Heng Yew, the marketing director of Werebits, the company which developed ChopInk, said the new communication trend is what prompted the company to innovate to make the mobile loyalty platform more fun to use for consumers.
“All they need to do is use their smartphone to capture a photo of a product or a retail outlet, add the appropriate Chop-Stick sticker on the photo to reflect their review and then share the photo post with their friends on their selected social media platform,” he added.
Citing US-centric studies, Ho said that 85% of smartphone users prefer mobile apps to mobile websites, while 57% of the people use mobile devices while shopping and 30% of the people would like a loyalty programme embedded within the app.
“These statistics provides strong credence on the need for businesses to provide mobile apps and experiences for their customers. The mobile app space has changed radically in the past one year.
“Our aim is to help retailers stay on top of the game by giving them the right tools to engage with their consumers. I am confident we will see a stronger take-up of ChopInk by both consumers and merchants with the introduction of this new feature,” he added.
Ho also shared three questions retailers must ask themselves before embarking on their mobile app strategy:
Are you targeting the right smartphone market?
Have you defined your target customers?
Does your brand drive the app or does the app drive the brand?
“Mobile users will try your app once and delete it if they don’t find it useful to them, so it is important to have a logical and seamless execution of your app that makes sense for your users,” he added.
ChopInk was launched slightly over a year ago and offers retailers the option to run multiple loyalty programmes and offer rewards for multiple purchases. They can also set up automated follow-ups with customers on special occasions like birthdays and reward expiries, to engage irregular customers into becoming frequent buyers.
When asked, Teon Ooi, cofounder of Werebits, reported that the app currently has 50,000 active users but declined to share additional figures due to non-disclosure agreements signed with some merchants, and added that the app integrates with point-of-sales systems and other loyalty programmes that the company does not track.
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