1. Startups

Synergy Potential of Startups and Retail Companies Realizing “New Retail” in Indonesia

Generate new consumer experiences in shopping

New retail is a term popularized by giant E-commerce Alibaba to describe the retail mix online and offline through the digitization of the trade process or what is known as retail value chains. The goal is to provide a better user experience (UX) for the benefit of merchants, consumers, as well as various partners involved in business processes.

Based on the CGAP study, the concept of new retail democratize several dimensions in the trading business, including: (1) supply chain and distribution logistics, (2) value added services for manufacturers/retailers, (3) integrated shopping experience for consumers.

With its financial resources and capabilities, Alibaba develops all these aspects independently. But what if faced with the opposite condition, when digital transformation is faced with legacy business processes, changes cannot be made quickly – with various limitations of existing resources.

Synergy opportunities

Realization new retail, especially in Indonesia, this can be done through synergies between technology startups and retail companies. The synergy can be started by identifying the most fundamental aspects of new retail itself, which is nothing but building data warehouse. The collected data will be used for various purposes such as predictive analysis.

If we look deeper, there are several data that can be used in retail business processes to assist the decision-making system, including payment/transaction data, product data, promotion data, and logistics/supply chain data.

Not only does the digitalization process, as many traditional retailers have done, the data must be integrated with one another to produce data insight comprehensive. For example, between product data, transaction trends, and logistics systems to help retailers ensure food stocks are always in prime condition.

Technically, there should be good connectivity between apps point of sale which accepts transactions from consumers, stock applications in warehousing units, to supply chain applications that connect retailers with their partners.

The use of digitizing tools will significantly convert the data sets that retailers produce or manage. The current platform is also generally open, allowing for integration with other digital services. Take for example a financial recording application that can be integrated with a cash register system or digital wallet transaction dashboard via an API connection.

Research conducted by Accenture also shows a trend of accelerating digital transformation carried out in the retail and FMCG sectors during the pandemic. There are ten aspects that are captured, starting from the desire to parse consumer data into knowledge, improving sales management, to improving the partner ecosystem.

Survey DSResearch FMCG companies/local retailers also show more or less the same results. The vision of transformation launched to deliver breakthroughs to unlock the potential of new products/services and adapt to trends in consumer needs.

Collaboration form

Studying the digital transformation of reports DSResearch above, there are several models that retail companies can adopt when collaborating with startups. The first form is system adoption, in simple terms retailers only need to be premium customers of digital services provided by startups. Some platforms provide the flexibility to customize needs at a limited level.

The second form is through strategic partnerships. In Indonesia, for retail or FMCG companies, this practice does not seem common, but some have already done so. Companies with greater scale and capabilities can participate in the development of startups – generally through ownership alias the company becomes shareholders (either majority or minority). This model allows the alignment of visions between companies, so that they can synergize more intimately.

The third is through sharing platform, some startups have dependence on business partners in terms of product fulfillment. Especially for those who are developing -based systems online-to-offline.

New consumer experience

Via platform omni-channel, retailers can enter the digital platform to serve more users. Stores that provide fresh ingredients, for example, may enter the HappyFresh ecosystem, even some services E-commerce Popular also began accommodation services similar. In addition to being delivered, the application Grocery also has the option to be picked up in the shop, so the experience offline shopping is still very likely formed.

When people shop, there are three experiences that will be felt, namely shopping preparation, shopping process, and after shopping. In the shopping preparation stage, several activities start from listing shopping items, finding inspiration to buy new items, searching/viewing promos, to choosing the retail store you want to visit.

While in a retail store, they are faced with several activities. Starting from going around shelf after shelf to find items that can be purchased. In this process there are several innovations that might be developed, such as applications store map or as simple as a product information application – users can do scan to the code listed on a product to view various information, ranging from price, content, to the distribution process (will affect fresh products such as vegetables). Continue the payment process and claim discounts if there is a promo being followed.

Even after returning home, there are still some experiences that can be presented. Examples allow users to earn points from the program loyalty run or users can provide testimonials for certain goods. The most important aspect is that it makes it easy for users to manage their spending records and help perform expense analysis. At this stage, several local startups have tried to bring innovation, one of which is Pomona, allowing users to earn points by doing scan receipt.

The retail industry will survive

A study put forward the hands-on shopping experience will still be relevant amid service developments E-commerce or online groceries. There are four dimensions that are maintained, including sensory, emotional, psychosocial, and impression / meaning.

The sensory dimension is related to experience which refers to stimuli of shape, color, touch, etc. While the emotional dimension is related to the experience of using emotions to generate liking for a brand or product. The psychosocial dimension is people's desire for self-indulgence such as sightseeing while shopping. Meanwhile, the impression/meaning dimension is related to the experience of doing the activity itself.

What deserves to be a priority at this time by retailers is how to improve the factors mentioned above through mobile phones that are always in the hands of every consumer. This is done while looking for innovation to present a new, more memorable experience, which aims to increase sales/visit itself. Doing digital transformation is the answer. Forming synergies with digital startups is one option that can be chosen.

- Header Image: Depositphotos.com

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