the rise of the Internet and smartphones, Asian shoppers increasingly
use both online and offline channels to order, pay for, collect and
return purchases. This move is forcing manufacturers and retailers to
adapt to the modern shopper’s journey.
According to DHL,
traditional multi-channel-based approaches have proven problematic, as
the different channels are operated in silos, leading to cannibalistic
competition and variation in the customer experience. Additionally,
traditional approaches have failed to keep pace with the shopping habits
and delivery expectations of today’s consumers.
retailing, a more complex approach, improves on multi-channel strategies
by catering to the modern shopper’s journey. Omni-channel approaches
offer customers the same experience in every channel and allow them to
seamlessly switch from one to another. Customer preferences and
interactions can be captured in every channel – including physical
stores – and shared in real-time. The data collected can be leveraged to
gain purchasing behaviour insights and influence shoppers’ behaviour.
Consumer demand as main driver for omni-channel approaches
2015 survey included 56 companies across Asia, and the report reveals
how these businesses are adapting to the omni-channel approach. Consumer
demand is the main driver behind the omni-channel trend in the region.
Asian consumers expect fast delivery to the most convenient point of
collection as well as the ability to select the quickest delivery option
on mobile and Internet platforms.
Companies need to keep a close
watch on how the omni-channel trend is playing out in Asia. Singaporean
consumers, are mainly “omni-channel buyers”, says Mike Ghasemi, research
director, IDC Retail Insights Asia Pacific. “They use smartphones,
tablets and laptops to explore and compare products 24/7, connecting
with brands through every conceivable channel: websites, physical
stores, call centres, you name it.”
Multinationals in Singapore
need to weigh the case for omni-channel retailing by also considering
costs, says Tamanna Dahiya, director, DHL Asia Pacific
“The high costs of retail space and labour
influence the need for an omni-channel approach, and encourage more use
of digital channels for businesses in Singapore,” she points out.
“Businesses are seeing a shift from heavy retail stores and
distributor-driven sales to a more equal spread of sales across a
combination of physical and online channels.”
Why logistics providers should pay attention to omni-channel adoption
the back-end of the retail supply chain, logistics providers are
crucial to the success of omni-channel implementation. They must provide
services that meet consumers’ expectations for fast delivery, and have
teams capable of working across channels.
In Singapore, one of the world’s most densely populated countries with nearly 7,700 people per square-kilometre,
traffic congestion poses a risk, and meeting consumers’ growing
expectations for fast delivery is a particular challenge. It has become
imperative for companies to build capacity in last-mile logistics.
in Singapore are already pioneering omni-channel models. Take, for
instance, the growing number of large grocery companies that offer
services allowing customers to order online or drop off shopping lists
in-store, and have items delivered to their homes. Online grocery
start-up Red Mart is but one example, allowing customers to place orders
anytime, anywhere using its mobile app, and select a two-hour time slot
for delivery to their doors. “Innovations in last mile delivery are
also evident – from lockers to convenience stores, consumers now have
the flexibility to pick up and return shipments anytime,” says Dahiya.
Eng Keat, Director of Logistics at the Singapore Economic Development
Board also observed an increasing number of companies using Singapore as
a base to carry out omni-channel retail activities throughout Asia.
is a trend we are very supportive of as it translates into many
potential opportunities for logistics providers in Singapore to serve
the growing base of retail customers in Asia. It is vital that logistics
providers here can innovate and enhance their offerings in order to
meet the changing needs and demands of consumers,” he said.
DHL’s report shows that retailers are making investments that set the
stage for an “omni-channel future” in Asia. Supply chains are being
enhanced for greater efficiency and speed, with investments in
automation, click-and-collect models and same-day deliveries.
survey found 58 percent of companies are investing in cloud-based
logistics, which allow companies to monitor supply chains and identify
inefficiencies in real-time. Predictive logistics, which provides more
accurate forecasts of future demand based on past demand data, is a
growth area, with 29 percent planning to invest in it.
providers must pay attention to Asia’s evolving retail landscape and
adoption of omni-channel. As brands switch from channel-based approaches
in reaction to consumer demand for fast delivery, providers must keep
pace – both to satisfy consumers' expectations, and stay ahead of the
competition in the region.
Meeting omni-channel demands requires organisational overhaul
approaches require an organisational overhaul. Key operations like
marketing, merchandising, ordering, fulfilment and returns must be
managed to work seamlessly across offline and online channels.
companies need to take a serious look at how they can offer a seamless,
real-time experience to their customers by introducing digital
platforms in fulfilment and end-to-end solutions,” adds Dahiya.
explains that logistics providers need to tailor fulfilment options and
supply chain processes to match the modern shopper’s journey. “A
well-aligned supply chain would give consumers the flexibility of
anytime, anywhere delivery while maintaining cost-effectiveness for the
One such delivery system that meets consumers’ demands
for speed, while maintaining cost-effectiveness is being piloted by
China’s largest B2C website Tmall.com. When Tmall.com receives orders
for Danish retailer Jack & Jones, rather than shipping the order
from a warehouse, its system analyses merchandise availability across
Jack & Jones’ stores and dispatches the order from the store closest
to the customer; thus speeding up the delivery process.
demands arising from the omni-channel trend, Ghasemi says providing
fast, reliable delivery, returns, refunds and scalable physical space
will be “crucial for any logistics company”. “The transition
to omni-channel requires a total transformation of the retail supply
chain so that it becomes consumer centric,” he explains.
currently helping traditional retailers in Asia redesign supply chains
to serve the growing need for speed in digital channels. This involves
evaluating omni-channel fulfilment options such as ‘click and collect’
and ‘pick up from stores’ for online deliveries.
that logistics companies also offer integrated, flexible solutions. “At
DHL, for instance, we can provide integrated B2B and B2C fulfilment,”
she says. One way DHL does this is by designing fulfilment centres that
can support the different requirements of both B2B and B2C shipments.
tip is that logistics providers need to provide solutions for Asia’s
diverse payment practices. In some Asian markets, cash on delivery
(COD) is a key requirement, which “poses a lot of challenges in the
collection and management of funds”, says Dahiya. DHL is testing mobile
wallets to collect COD funds.
As the largest and fastest growing B2C ecommerce market
in the world, Asia Pacific is witnessing a phenomenon that sets the
stage for omni-channel. “Increasing e-commerce shipments with smaller
packs and more stock keeping units introduce a different level of
complexity in supply chains,” says Ghasemi. “This presents even greater
opportunities for logistics providers to partner with and advise
retailers on optimising supply chain networks in a cost-effective way.”