Watch and Learn: Emerging Markets, Experimental Technology

JacobYounan

May 16, 2018

Blog_WatchAndLearnEmergingMarkets
Prepare to be bold
For years, emerging markets have been focused on attracting new customers, but as market saturation nears, they’re now grappling with the additional complexities of retention. According to a recent report from LoyaltyOne, “CX Intention vs. Impact," which surveyed retailers and customers from the U.S., U.K., Canada, China and Brazil, 80 percent of companies operating in Brazil and China have a “primary focus on customer retention rather than acquiring new customers,” versus 61 percent in mature markets. The embrace of mobile technology is frequently at the heart of this shift, with many brands prioritizing mobile-centric in-store experiences that harness wow factor and stress convenience to distinguish themselves from the competition.

Brands like Alibaba are investing in mobile more deeply than anyone. Every product in their recently-acquired and redesigned Hema chain of grocery stores is integrated into the store’s mobile app, allowing customers to instantly browse product facts, see real-time deals and receive product recommendations based on their Alibaba.com account behavior. They are even offering 30-minute delivery for customers who don’t want to come into the new stores. Did I mention scale? They intend to open 30 more Beijing stores in 2018 alone.

Scaling to the “mobile everything” stage this year may not be a reality for many mature market retailers, but the speed and size of the bet Alibaba is making won’t be contained to emerging markets for long. U.S. retailers are already anticipating a similar future, arming themselves for the evolution of Whole Foods with Amazon. If you’re in the U.S., you can’t justify ignoring how every major Chinese supermarket is reacting to Hema — it’s a free simulation.
 

A new urban/premium approach
Urbanization is a major factor in China, with tens of millions of consumers living in densely populated cities. Retail brands in the region are rapidly changing how they can best reach those shoppers, experimenting with everything from pricing and in-store technology to a complete rework of store design. Major players like RT-Mart, Carrefour and Vanguard are quickly transforming their conventional hypermarket format to bring mini-marts and/or convenience stores much closer to consumers. These high-quality, small-format stores require expert assortment and demand forecasting given limited shelf space — how Chinese brands are meeting these challenges can be valuable to American, Canadian or U.K. counterparts looking to better serve their customers in major cities.

Emerging market retailers in China are also emphasizing premium and experiential shopping as an area for sales growth, as the middle class continues to accumulate disposable income. To do this, they’re developing sub-brands that offer premium or exotic products and experiences that their target customers will find valuable, like Yonghui, which recently introduced a retailer/restaurant hybrid concept.   

Adapting your CX to meet the changing demands of consumers is a must for any retailer looking to survive going forward, and harnessing the constantly-evolving new technologies at your disposal will be at the heart of the process. That said, implementing every new idea, technology or strategy isn’t a wise option. Fortunately, emerging market retailers’ willingness to test and learn from the latest innovations in real time offers others the chance to minimize their risk in advance of making similar investments. If you’re interested in staying ahead of your competition at home, it’s time to start paying attention elsewhere.

 
Download the full “CX Intention vs. Impact” report here: https://www.loyalty.com/home/insights/article-details/cx-intention-vs.-impact-making-sense-of-the-ever-evolving-retail

 
Want to learn more about how to put these insights into action?
Contact Jacob at jyounan@loyalty.com.
 

Customer Experience

Loyalty

Customer Analytics

Digital & Mobile

Grocery

Food & Beverage

Retail

CX

Food Retail

About the author

JacobYounan

Jacob Younan

Associate Director, Global Solutions

As a Client Lead in our Global Solutions practice, Jacob leads the discovery, design and delivery of client engagements, supported by a team of senior practitioners in digital, data analytics, marketing, legal, program operations, technology and finance. He serves as a single point of contact for our clients, managing planning, day-to-day communications, budgeting and production of strategic deliverables.

Jacob began his LoyaltyOne career managing LoyaltyOne digital channels and lead development. He then moved to consulting, where he lead financial, strategic and marketplace analyses for loyalty design engagements in the pharmacy, electronics, grocery, pet care, and insurance industries. More recently, he's led engagements in high-frequency retail and multi-partner program design for leading global and national brands.

Watch and Learn: Emerging Markets, Experimental Technology

Aug 28, 2018, 13:53 PM
For years, emerging markets have been focused on attracting...
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Publication date : May 16, 2018, 04:00 AM
Prepare to be bold
For years, emerging markets have been focused on attracting new customers, but as market saturation nears, they’re now grappling with the additional complexities of retention. According to a recent report from LoyaltyOne, “CX Intention vs. Impact," which surveyed retailers and customers from the U.S., U.K., Canada, China and Brazil, 80 percent of companies operating in Brazil and China have a “primary focus on customer retention rather than acquiring new customers,” versus 61 percent in mature markets. The embrace of mobile technology is frequently at the heart of this shift, with many brands prioritizing mobile-centric in-store experiences that harness wow factor and stress convenience to distinguish themselves from the competition.

Brands like Alibaba are investing in mobile more deeply than anyone. Every product in their recently-acquired and redesigned Hema chain of grocery stores is integrated into the store’s mobile app, allowing customers to instantly browse product facts, see real-time deals and receive product recommendations based on their Alibaba.com account behavior. They are even offering 30-minute delivery for customers who don’t want to come into the new stores. Did I mention scale? They intend to open 30 more Beijing stores in 2018 alone.

Scaling to the “mobile everything” stage this year may not be a reality for many mature market retailers, but the speed and size of the bet Alibaba is making won’t be contained to emerging markets for long. U.S. retailers are already anticipating a similar future, arming themselves for the evolution of Whole Foods with Amazon. If you’re in the U.S., you can’t justify ignoring how every major Chinese supermarket is reacting to Hema — it’s a free simulation.
 

A new urban/premium approach
Urbanization is a major factor in China, with tens of millions of consumers living in densely populated cities. Retail brands in the region are rapidly changing how they can best reach those shoppers, experimenting with everything from pricing and in-store technology to a complete rework of store design. Major players like RT-Mart, Carrefour and Vanguard are quickly transforming their conventional hypermarket format to bring mini-marts and/or convenience stores much closer to consumers. These high-quality, small-format stores require expert assortment and demand forecasting given limited shelf space — how Chinese brands are meeting these challenges can be valuable to American, Canadian or U.K. counterparts looking to better serve their customers in major cities.

Emerging market retailers in China are also emphasizing premium and experiential shopping as an area for sales growth, as the middle class continues to accumulate disposable income. To do this, they’re developing sub-brands that offer premium or exotic products and experiences that their target customers will find valuable, like Yonghui, which recently introduced a retailer/restaurant hybrid concept.   

Adapting your CX to meet the changing demands of consumers is a must for any retailer looking to survive going forward, and harnessing the constantly-evolving new technologies at your disposal will be at the heart of the process. That said, implementing every new idea, technology or strategy isn’t a wise option. Fortunately, emerging market retailers’ willingness to test and learn from the latest innovations in real time offers others the chance to minimize their risk in advance of making similar investments. If you’re interested in staying ahead of your competition at home, it’s time to start paying attention elsewhere.

 
Download the full “CX Intention vs. Impact” report here: https://www.loyalty.com/home/insights/article-details/cx-intention-vs.-impact-making-sense-of-the-ever-evolving-retail

 
Want to learn more about how to put these insights into action?
Contact Jacob at jyounan@loyalty.com.
 
Tags :
  • Customer Analytics
  • Customer Experience
  • CX
  • Digital & Mobile
  • Food & Beverage
  • Food Retail
  • Grocery
  • Loyalty
  • Retail
Categories :
  • Report
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Author : Jacob Younan
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