Winning Asians in a fluid, multi-channel environment

Forward-looking retailers today combine online with a brick-and-mortar store, as well as set up sound after-sales support.

WE MODERN Singaporeans are constantly juggling our career, family, social and health commitments. So when it comes to the ideal shopping scenario, imagine this: One evening, you're scrolling through your phone in the comfort of your living room, catching up with friends on social media, planning your next golf trip and checking out the latest golf news.

You spot your favourite pro wearing the latest performance polo shirt, which would be perfect for your upcoming golf trip. A few more scrolls tell you exactly where to find this polo shirt in Singapore, and on the weekend, you head down to the store to try it on. A few days later, the golf trip is confirmed and you decide you want to purchase the polo shirt. It takes just a few clicks on your smartphone and the shirt is delivered in two days, just in time for your trip.

If you're like me, then this is fast becoming the reality of how Asian consumers want to make purchases. According to UPS's latest Pulse of the Online Shopper study, an annual study analysing the motivations of thousands of shoppers around the world and in Asia, Asian millennials, in particular, are frequent omni-channel users with 54 per cent using more than one type of digital device to make purchases.

With more than US$6 trillion in disposable income by 2020, this is an important segment that retailers cannot afford to ignore. In addition, 77 per cent of Asian consumers will make purchases on their smartphones and would have looked up on a product online for information or reviews before the point of purchase.

The study also uncovered that just over half of customers in Asia are satisfied with the overall online and in-store shopping experience. This pales in comparison to Europe and the United States, where customer satisfaction ranges between 81 and 85 per cent.

However, there's a silver lining; clever shipping and returns solutions are actually an area where retailers can win and retain customers, drive repeat patronage, and encourage shoppers to add more items to their carts - both online and in-store.

As more SMEs digitise their operations to capitalise on e-commerce growth for international expansion, understanding these trends can help companies make changes where it counts.

As more shoppers in Asia buy online, their rising expectations amid a fiercely competitive retailer landscape is driving increased demand for premium shipping services, more purchases from international retailers, and customer-centric policies such as flexible delivery options and fuss-free returns. Forward-looking retailers aiming to differentiate themselves should offer premium shipping options to cater to the modern shopper's way of life.

In Asia, due to lifestyle needs, 73 per cent of online shoppers expect orders placed between 6pm and midnight to qualify for next-day delivery, while 64 per cent expect orders placed between 5pm and 9pm to qualify for same-day delivery.

Interestingly, the study shows that online shoppers are willing to pay for same or next day delivery to receive their packages earlier. Nevertheless, free shipping is still a key driver of sales, with 46 per cent of shoppers adding items to their cart to qualify for it, so retailers should embed shipping costs within the price of products while remaining cost competitive to win more customers in Asia.

Online shoppers are also buying from a diverse range of retail outlets, with 55 per cent of Asian shoppers having purchased from an international retailer.

With increased competition from global retailers, businesses should use e-commerce and physical stores to their advantage, and provide an immersive omni-channel experience demanded by customers in Asia. While online shopping provides convenience, physical stores allow consumers to touch, feel and experience the brand.

As such, we see more retailers reimagining the function of a physical retail store by designing "instagrammable" retail spaces to enhance their brand's digital experience and drive more physical retail and online sales.

To add to the brand experience, SMEs with physical storefronts can also utilise online marketplaces to reach new consumer markets. Online marketplaces are becoming prominent retail spaces, with more than a third of shoppers saying they are likely to research and purchase more on these platforms.

Most shoppers also want flexible delivery options such as in-store pick-up or alternate delivery locations to suit their changing needs and preferences. Alternate delivery locations are most popular in Asia compared to other regions, with 71 per cent of consumers, particularly millennials and urban shoppers, interested in shipping packages to these locations with extended hours for reduced fees.

As more than half of consumers who shipped to stores made additional purchases while in-store, providing flexible delivery options can also lead to higher sales figures.

Lastly, a convenient and transparent returns policy increases sales and customer satisfaction. Regrettably, this is an area where retailers in Asia must do more to improve as only 47 per cent of shoppers are satisfied with the ease of making returns. Returns both in-store and online drive incremental purchases for consumers, so SMEs should consider absorbing return shipping costs and craft return policies that satisfy domestic and international customer needs.

The current gap between customer satisfaction levels in Asia versus Europe and the United States presents an opportunity for Singapore companies to differentiate themselves in a crowded and competitive landscape.

Delivering a consistent and high-quality experience from start to finish for Asian consumers is key, especially if Singapore companies are aiming for regional and international expansion. As shipping is a key differentiating factor to consumers, having a trusted logistics partner that provides accurate tracking, good customer service and timely pick-ups is crucial to facilitating business growth.

More than just a service provider, a good logistics partner that is competent, consultative and accountable plays a critical role in shaping the brand experience and can help enhance the reputation and reliability of brands in the minds of its consumers.

Now, you have options to see the physical goods and purchase at your own convenience, whether in-store or online. Instead of making a last minute dash to the store to purchase your golf polo shirt, your time can be better spent enjoying a relaxing evening at home with family, a leisurely dinner with friends or exercising to keep up with your fitness goals.

  • The writer is managing director of UPS Singapore