Changes in shopping behavior and consumption habits of the new generations require retail and business enterprises to transform to catch up and meet their demands.
Digital transformation and the new generation
Millennial and Generation Z are currently the largest consumer groups by purchasing power. Their shopping behavior as well as their brand engagement are very different from previous generations. Millennial lives in an era where the speed of new technology changes is higher than any previous generation, which makes them constantly seek and expect differentiated, personalized experiences and can be described briefly in two words: “right” and “now”. This forces the business models, especially the retail model, to shift to catch up with the habits of consumers of these generations or face the risk of losing their position and falling behind.
In leading e-commerce economies such as China and the US, new retail systems have emerged, reforming the traditional e-commerce model. In Vietnam, three-fourths of consumers have a habit of buying online, and it is estimated that by 2025, e-commerce will account for about 10% of retail sales. The new retail model will enter the Vietnamese market under both B2C model (from business to customer) and B2B (from business to business).*
Traditional electronic retail
In this context, retail stores, especially traditional electronic retailers, can focus on building and developing stores in either of the following two approaches to catch up with the changes in the behaviors of new generation consumers, rising up and moving to new business models: Customer Experience and Sales Function.
Experience stores are places where customers can visit to experience, interact with brands and buy goods. Currently, almost both electronics and consumer electronics retail chains have interactive product display areas or often have in-depth experiences, activities, interacts with experts.
Functional stores are especially suitable in the case of technical products, digital products and products that can be easily purchased online, but customers are in need of seeking advice or instructions from experts before purchasing. The FPT shops chain of FPT Retail (FRT) or The gioi di dong has led the market for many years by providing free consulting services to customers about technology products when purchasing, from phones, laptops to auxiliary equipment, services such as headsets, wireless mices, etc.
Electronic retail on a digital platform
Besides the development of technology, cultural factors play an increasingly important role in the purchase of products. The generational shift has turned consumers or decision-makers who used to “listen” to advice from relatives to accept or even wait for selections and suggestions directly from algorithms. Customers expect their shopping experience to be organized, pre-selected and personalized.
With the development of e-commerce and the digital economy, businesses that take advantage of customer data effectively will create certain competitive advantages. In fact, with regular Internet users, all information is stored in the web browser, search keywords, personal information declared on social networks, service bills, become data sources that help businesses “visualize” most clearly about consumers’ needs.
FPT Shop currently owns the second largest digital retail chain in Vietnam and has the highest sales-floor in Vietnam. However, Ms. Nguyen Bach Diep, Chairman and CEO of FPT Retail (FRT), said that the company has for years been pursuing a digital transformation strategy. She believes that, “Enterprises that are not prepared for digital transformation will surely be left behind and die.”
A comprehensive digital transformation roadmap
FPT Digital, Digital Transformation Division of FPT, has consulted FPT Retail on a comprehensive digital transformation roadmap including: business consulting, technology consulting and consumer experience consulting.
Mr. Phuong Tram, Chief Digital Transformation Advisor of FPT Digital, said that the company needs to unify, constantly update and synchronize between IT platforms, business activities and management tools. To do this, the company needs to solve core problems such as automation, supply chain management, and technology development to provide the best customer experience.
An example of digital transformation is that FPT Retail establishes a data analysis center with the latest AI technology with the focus on analyzing target customer groups, serving the individualization of each customers’ needs.
Currently, FRT’s call center has used chatbots to respond, and receive feedback from customers about products, about promotions on online shopping sites as well as at FPT retail stores chain.
In particular, Pika Chatbot uses FPT.AI platform for processing natural language. Pika Chatbot becomes increasingly intelligent by taking advantage of the huge amount of customers data self-study. When receiving questions from customers, through the natural language processing, chatbot will capture keywords to judge users’ questions and opinions, thereby giving the most appropriate answers.
Ms. Tran Huyen Trang, Affiliate Project Manager of FPT Retail Online Business Center, said: “FPT shop chatbot is designed to solve the problems that our customers really care about. Chatbots help satisfy consumers’ needs of searching for information, erasing the boundaries of the differences when customers interact with people and when they interact with machines, while at the same time, customers will be more interested in the buying process”.
Not only does digital “upgrade” in direct customer services, FPT Retail also implements its own software such as mSM, MPOS, MDelivery investigated and developed by its own company.
The effect of digital conversion “touch” to the new generation
All of these technologies help reduce sales consultation and order completion time to 30-50% compared to before, from 45 minutes to about 15 minutes.
Particularly for mSM, the manager of each FPT Shop store can view business data immediately, understand the sales situation of each employee and each store in order to timely adjust and promote sales. The application also supports exporting data to excel file, sending e-mail and looking up company contacts conveniently. Reporters only take minutes instead of hours to days to contact other departments. With real-time ability, mSM’s data ensures instant fidelity and accuracy, helping to improve the business efficiency of FPT Shop.
Although FPT Retail has had a comprehensive digital transformation strategy and has made many leaps thanks to this strategy, FPT Retail still urgently needs to “solve” difficult problems. With FPT Digital as a company, FPT Retail will quickly reach the destination of the digital transformation journey, taking off to become a leading enterprise in the retail industry in Vietnam.
(*) Forbes Vietnam. 2019. Enhancing the brand: New style retail.