Recalibrating Strategies: EY's Olivier Gergele on seizing opportunities for retailers amidst the crisis
The Retail Asia judge believes retailers need to recalibrate their strategies and operations to emerge stronger from the crisis.
Olivier is EY’s Asean Consumer Products & Retail Leader based in Singapore. With vast operational and consulting experience in the consumer products and retail sector globally and across Southeast Asia, his experience covers projects on growth strategies, innovation, value creation, go-to-market, sales and marketing effectiveness, profitability improvement, cost and complexity reduction, change management, and large scale transformation.
Olivier assists clients in engagements such as strategy development, operating model and organisation review, go-to-market definition, value creation, and large-scale commercial and cost transformation programs. He holds an MBA from Warwick Business School in the UK.
As one of the judges of the recently held Retail Asia Awards, Olivier recently shared some of his insights about finding opportunities amid the pandemic’s challenges, supply chain disruptors, and the need for leadership to drive agility.
What are the most important consumer product and consumer behaviour trends that will dominate Southeast Asia?
COVID-19 has fundamentally changed how people around the world shop, what they buy and what their expectations are.
During the pandemic, more consumers have been forced to go online and discover a new level of convenience. They experienced how online deliveries help save time. They were provided with smart purchase suggestions, which were generated based on their purchase history and artificial intelligence technologies, which have helped simplify decision-making. As a result of these collective experiences, they now place greater value on convenience and personalization. More than half (52%) of consumers globally are now willing to share their data to auto-replenish their online grocery orders, according to the global EY Future Consumer Index as of October 2020.
As consumers spend more time online and are more willing to share their data, this represents an opportunity for retailers to understand and engage with their consumers beyond the point of sale. Leading retailers that have succeeded in applying their data analytics capabilities to guide and shape consumer choices can build deeper connections with the consumer. As consumers experience the added value that retailers can provide, they will expect retailers to be problem solvers in providing advice and the majority (68%) are willing to share data for promotions and deals that are tailored to meet their needs, according to the same survey. Consumers are also looking to retailers to shift gears and create experiences and events.
While consumer behaviors are still evolving, it is clear that consumers expect more from retailers. This can be summarized into three key expectations: make life easier, make it feel better, make it more fulfilling.
What's your advice to consumer products companies and retailers that are rethinking their business models especially during this crisis?
To succeed, retailers need to transform how they view and implement technologies. While retailers have invested heavily in digital technologies, few have pursued those strategies with true consumer integration in mind. This is not just about creating another shopping app or using automation to improve operational efficiencies. Instead of focusing on what technologies can do for the business, retailers need to focus on how these technologies can serve the consumer needs for greater convenience, value-add through problem-solving, and provide personalized experiences.
With retail sales in Southeast Asia currently struggling, and consumer spending on the decline, how can retailers survive—and even flourish—during the pandemic? How can retailers find the right balance between driving their current business and adapting themselves for future growth?
COVID-19 has disrupted supply chains, consumption has declined and consumer behavior patterns are evolving as mentioned earlier. These trends have hit retailers hard as evidenced by the closure of big and established brands globally but at the same time, opportunities abound for this region. According to a report by Euromonitor published in November 2020, the retail industry in Asia-Pacific is set to grow by 6% in 2021.
To drive sustainable growth in this environment, retailers need to recalibrate their strategies and operations to emerge stronger from the crisis.
Firstly, build on their online presence that retailers have developed during the physical lockdowns of 2020. Beyond merely retailing online, they will need to double down on their omnichannel strategy and ensure consistency across online and offline channels.
Secondly, regularly review product sources to reinforce supply chain resilience and agility. Retailers will also need to take the opportunity to secure reliable local sources and plan for long-term collaboration to hedge against disruptions in international trade.
Thirdly, businesses need to expand their offerings to meet evolving customer needs. They will need to monitor changes in consumer demand and when demand increases for certain products and services, this presents an opportunity to drive private label penetration. They can also enhance their target value proposition by driving customized promotions and offering value packs for economies of scale.
Fourthly, even with the current pandemic, deals remain a powerful way to reshape portfolios and accelerate the transformation imperative. According to the EY Capital Allocation Survey 2021, 70% of retailers expect to increase investments in digital technology.
Fifthly, leadership will need to drive agility by empowering decision-making. To achieve this, retailers need to establish and empower a senior cross-functional local leadership team with a defined ambit to manage issues on the ground.
What are your thoughts about this year's competitive entries for the Retail Asia Awards?
This year’s competitive entries reflect the accelerated trends that we have been seeing in the industry over the past couple of years with many entries reflecting a strong focus on embedding new technologies in retail or mall operations to maximize consumer experience. It was great to see so many initiatives that have been undertaken by the various players across the different geographies. Congratulations to all participants and winners!