What can Western Retailers Learn from Eastern Tactics?
Walmart’s Leader of Store Technology, Pavan Pidugu, gives his perspective on how Western retailers can crack the Eastern market, from last mile delivery to digital wallets, find out how the East is leading the way when it comes to retail.
How can Western retailers incorporate Eastern tactics for increasing footfall in their bricks and mortar stores?
From what I’ve observed, there is a big difference in shopping habits between consumers in the East and the West. In Asia, people tend to shop more frequently compared to people in the West however, I would say European consumers have a mixture of Eastern and Western shopping habits in terms of how often they shop. In the North Americas, people tend to do a weekly shop and stock up on the items they’re purchasing and in the East, people are more inclined towards shopping on a daily basis for fresh produce.
The second part is price and convenience, besides the shopping culture, which is driving people to visit shops. Technology has made the information available for customers at their fingertips which they can access at any given time and this is allowing customers to decide where they shop based on convenience.
The option of having multiple savings being offered to a customer is becoming an important driver for them. Link Saves promotions are commonly seen in UK, China and Japan where multiple items across different categories will be on sale and they are linked to different promotions. Rather than having a promotion on a single specific product, which is a popular method that I’ve seen used elsewhere in the West. Another big game changer will be promotions that are personalised to an individual shopper and specific promotions in the store.
Which key areas do you think are the most important for Western retail brands to learn from when entering Eastern markets for the first time?
The biggest thing needs to be understanding the culture and the second biggest thing is to understand the product offerings that they need to have.
For Western retailers entering into an Asian market, China, Japan, or India, there needs to be a specific focus on the region within these countries. In China, for example, each province and geography has a different culture, tastes and needs etc. Western retailers will need to have the right assortment of products for each region within a specific Asian market, especially for grocers and fashion retailers.
How have you overcome challenges with digital success when collaborating with Western and Eastern retail markets?
In my experience, digital adoption is much easier to influence in the Eastern markets compared to the West, whether it’s in the workforce or for the customers. At Walmart, we’ve created a new way of checking out in stores through a customer mobile app called Scan & Go. This is a model that’s been picking up in recent years amongst UK, European and US grocers who are also going down this path to provide better convenience for their customers.
We launched Scan & Go a few years ago to offer our customers a checkout that requires no interaction with a cashier. However, the adoption rates of technology in retail in China and in the rest of Asia are much greater compared to Western markets. Overall Tech adaption, in my opinion, is higher in that region.
For example, SMS was very popular in India and Asian in the early 2000s when it was really expensive in the UK or the US to use. In India, mobile data is a lot more affordable and in most cases is free, so everyone has access to it, therefore retailers are using this as a tool to interact with their customers.
What can Western retailers do to improve their use of mobile payment technology to keep up with Eastern retail markets?
Understanding the customers’ needs is key and to communicate the benefits that they’re going to be seeing with the introduction of these digital tools. Personalisation can be done by leveraging the data gathered from these digital in-store tools by creating personalised marketing content and promotions that are more relevant to them.
I don’t think it will be too difficult for Western brands to adopt more workforce tools, as the next-generation workface will be digital natives. They will have grown up being digital savvy and currently many Western retailers are crippling their growth and potential because they haven’t yet adopted workforce digital tools. If the resource pool to work in stores will be from future generations, giving them old-fashioned, mainframe-based tools to work with or are not mobile friendly, retailers will struggle to retain and engage their younger store associates.
Which Eastern technology innovations for enhancing customer connectivity should Western retailers adopt in 2020?
The problem in the Western world is that there are so many tools and offerings in the marketplace. For example, there are different payment options available and each retailer now has their own digital wallet. It’s becoming harder for customers to keep up with the number of digital wallets versus one ecosystem as seen in China. WeChat and Alipay are both ecosystems. If you’ve got WeChat then you can shop anywhere in China whatever the retailer or product.
However, in the UK and US, if you go to a retailer, Walmart or Target as an example, they have their own branded digital wallet and this is replicated across many other retailers. One customer could have between 10 – 15 different digital wallets based on how often they shop and where and this is becoming harder to navigate. Western ecosystems such as Apple Pay and Google Pay are the two major ones available but they’re often not available at many major retail brands. They need to find a way to make this a lot easier for their customers rather than forcing them to adapt to these complex scenarios.
What is the most effective way to increase collaboration between Eastern and Western retailers?
There is so much service-based innovation that is happening. It amazes me in China, You could be sitting in your office on the 10th floor and have an iced coffee ordered from McDonald’s and by the time you reach the ground floor from the elevator, your coffee is delivered to you. That’s how retail and last-mile delivery is done in Asia, specifically in China and India.
Eastern retailers are innovating delivery services on a daily basis and these are becoming very, very popular in foundational ecosystems that any retailer can jump onto. This in contrast to creating silos in independent ecosystems or products that force one retail and customer to interact. Using China as an example, if I’ve got WeChat, I can use any particular retailer’s app which will be embedded in the WeChat platform. In the West, each retailer has their own app and customers probably use 18 – 22 different apps on a daily basis, banks, social media, professional networks etc. In China, these are all built into one single platform and this is one of the biggest innovations the West could adopt.
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