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Redesigning the retail experience

Nurdianah Md Nur
Nurdianah Md Nur • 6 min read
Redesigning the retail experience
Retailers need to rethink their long-held beliefs and practices, which are preventing them from addressing new customer demands. Photo: Pexels
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The e-commerce sector in Southeast Asia has exhibited robust growth, registering a noteworthy 22% year-on-year increase in revenue, reaching a substantial US$28 billion ($37 billion) in 2023.

To capitalise on this upward trajectory, retailers are compelled to harness technology in 2024, strategically addressing industry challenges persistently. Key focal points include enhancing customer engagement across physical stores and online platforms and identifying novel audience segments. But how exactly should they use technology to redesign the retail experience and address evolving consumer demands?

Enable advanced personalisation

“In 2024, the winning strategy will involve adopting an experience-led growth mindset, where retailers deliberately create highly relevant, personalised experiences that both delight the customer and increase the lifetime value of the brand,” says Simon Dale, vice-president and managing director for Southeast Asia and Korea at Adobe. This calls for data and insights to be easily accessible, and generative AI can help here.

He adds: “Generative AI empowers organisations to harness the power of machine learning and natural language processing to streamline data analysis, uncover hidden patterns and derive actionable insights at an unprecedented scale. This allows business leaders to focus on enhancing workflow efficiencies, optimising costs, advancing customer centricity, and accelerating data-driven transformation within the organisation.”

Dr Derek Wang, general manager of Singapore, South Asia and Thailand at Alibaba Cloud, agrees that generative AI can help redefine customer engagement. “Embracing advanced AI tools, particularly generative AI, empowers businesses to decode nuanced consumer behaviours, shaping bespoke experiences that drive loyalty and satisfaction,” he says.

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He gave the example of the Chinese e-commerce platform Taobao using an AI shopping assistant powered by Alibaba Cloud’s large language model (LLM) Tongyi Qianwen to be more customer-centric, especially during last year’s 11.11 shopping festival.

“Unlike traditional chatbots, the LLM-powered assistant can understand the intent of the consumer inquiry better and engage in multi-round conversations, enabling it to offer personalised shopping advice and access to flight and hotel bookings on Fliggy. Over 10 million consumers have used the AI assistant since its beta testing in September 2023,” he adds.

Rethink data ownership

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While customers want personalised offers and services, they are also concerned about data privacy. Glenn Gore, CEO of Affinidi, says addressing data privacy concerns is “exceedingly complex” for retailers and e-commerce players, especially operating within the constraints of existing identity frameworks.

“Each time a consumer shops online, listens to music, or books a trip, they leave fragments of their digital selves online. Leaving data security to retailers has been proven to be challenging as management of customer data can be complex, time-consuming and costly, especially as databases grow with the proliferation of online services,” he adds.

Affinidi is helping organisations overcome this challenge through its Holistic Identity solution, which Gore claims will reverse the current imbalance between platforms and users. This is because it provides individuals with a comprehensive, secure, and integrated view of themselves and empowers them to control what data they want to share and with which service provider in exchange for discounts or additional incentives where applicable.

Frictionless shopping experience

Shopping is no longer limited to a particular channel. For instance, customers may try a piece of clothing in-store but complete the purchase on the retailer’s website as the item is on sale online or they prefer to get it delivered directly to their home. Retailers must therefore be able to effectively blend their in-store, online and on-the-go environments using technology.

“Achieving seamless omnichannel synergies is [key for retailers today]. By investing in AI-enabled technologies such as virtual try-ons, businesses can bridge the gap between physical and digital realms, ensuring a cohesive journey across multiple platforms,” says Alibaba Cloud’s Wang.

For instance, Taobao offers a virtual try-on feature that allows consumers to visualise how a piece of clothing will look on them. Wang claims that the domain-specific AI model by Alibaba Cloud can accurately reflect the silhouettes and fabric of the clothing, producing a realistic look where consumers can see how clothes stretch, cling, and fold with fabric draping on their bodies.

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Retailers also need to ensure that their registration and login process for their e-commerce is frictionless. The IDC Affinidi Customer Identity Management Survey 2023 reveals that 55% of companies reported they experience incomplete registrations up to a third of the time — a figure attributed to cumbersome and time-consuming onboarding processes involved in registering for mobile apps or online services. Furthermore, 79% of customers prefer that these processes be streamlined to a maximum of three steps.

Retailers can address those customer demands using Affinidi Login, a passwordless authentication solution that prioritises data security and user-friendly authentication. Gore says: “Combining sign-up and sign-in in a single step fosters end-to-end trust and enables privacy-preserving data sharing while reducing onboarding drop-offs. This is crucial, especially for e-commerce players looking to remain competitive in a vast online marketplace.”

Simplify payments

According to Samba Natarajan, senior vice president for growth markets at PayPal, retailers should use payment orchestration services to combine various payment methods into a single interface. Such services will enable retailers to manage their entire payments ecosystem through a single application programming interface (API) integration that allows them to accept payments from multiple sources without individually integrating each payment method. This helps save time, allowing them to focus on generating more sales and other operational details.

Contextualisation of payments, he adds, will also become increasingly prominent. “We will see a continued emphasis on creating value for consumers, with payments driven by choice, experience, and data availability. Recognising this interconnectivity can unlock real value — for example, PayPal uses machine learning models to help retailers detect and prevent fraud and data science techniques to enrich customer experiences at every step of their purchasing decisions.”

Achieve sustainable operations

With increasing pressure from regulators and consumers to operate sustainably, Alibaba Cloud’s Wang encourages retailers to leverage AI to gain insights into their carbon footprint so that they can reduce their emissions.

He adds that Alibaba Cloud’s carbon and energy management solution, Energy Expert, enabled retailers and brands to measure their carbon footprint and carbon reduction during last year’s 11.11 event to promote a greener lifestyle. It provided online carbon footprint modelling, calculations, and certifications for over 100 sustainable products and presented the carbon reduction figures and low-carbon methods on their respective product information pages on Tmall.

“Integrating AI-driven solutions for carbon footprint measurement reflects a commitment to meeting the burgeoning demand for eco-conscious products. Aligning with global sustainability imperatives not only elevates brand reputation and fulfils ethical consumer expectations,” says Wang.

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