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
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