“Reviving Malaysia's Retail Industry using Omni-Channel Strategies” with Penny & Stephen | Episode 7
Updated: Mar 9
Joining Jun and Imran on this episode of The Future of Retail Asia Podcast are Penny Ong and Stephen Lim from Malaysia. Penny has over 20 years of experience in the Property, Real Estate and Retail Industry in Malaysia doing branding and marketing, and is currently the Founder of her company, Plow Brandology. Stephen is the current Managing Director of HyperQB, and his focus is driving digital transformation in business and making customer data unified. Both are partners and are working to bring the Malaysia retail industry into the future. They share about the importance of a mobile-first approach, O2O strategies, and the overall outlook of retail in Malaysia.
Episode 7: “Reviving Malaysia's Retail Industry using Omni-Channel Strategies” with Penny Ong and Stephen Lim
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IMRAN: Hello and welcome back to the Future of Retail Asia, my name is Imran.
JUN: And I’m Jun. Today, we have not one, but two guests joining us from Malaysia! They are Stephen Lim, managing director at HyperQB.
IMRAN: And Penny Ong, founder and chief brandologist at Plow Brandology. Welcome Stephen and Penny!
IMRAN: A little bit more about both. Stephen is currently the co-founder and chief strategy officer of HyperQB and FusionQB, where his mission is to help drive digital transformation in businesses and to make customer data unified. He also has other ventures, which includes being a co-founder at Internspoon, a platform that helps students find internship opportunities, and a business partner at Pulpy Juice, his foray into the F&B sector.
Penny, on the other hand, has over 20 years of experience in branding and marketing. Over the 2 decades, she has worked with many organisations within the property, real estate, and retail industry in Malaysia, including UM Land, WCT Holdings, and IPC Shopping Centre, just to name a few. Previously, she was also group director of brand communications and marketing at Hatten Group.
Both, very impressive backgrounds, and I think we would have a great discussion on Malaysia today!
JUN: Yes, really very impressive. Actually I am very curious about the situation in Malaysia. Previously we talked to our Country Head, Darren, and we were discussing about the situation looking quite bad in Malaysia, especially a lot of malls and retailers got very very badly hit. From our understanding, some restrictions have been lifted to help with the recovery, because the vaccination rate going up, which is good for us to hear right. But what does the recovery plan looks like in the coming few months and do you think we will see people in shopping malls and retail shops and F&B restaurants soon?
PENNY: I guess, basically to answer to your question, we can see that the relaxation in terms of the MCO is more of getting to the norm. Can see that for the past two to three weeks, the traffic is getting busy, people are getting back to work and all that. If you are talking in terms of the overall economy, I guess it’s also, people are getting back to the food, the recoveries. I believe this is actually very promising, in terms of the economy-wise, and also for the retail arena. Regaining all the footings, people are getting back to work, and also the activities and so on and so forth. On the other hand, it could also be contradictory, people are also feeling a bit skeptical, there could be some new variants that could be coming out as well. Whether we should still get back as normal as what we used to be two years back. This is more of generally, if you were to arrange it, it would still be a positive move for the economy for Malaysia.
IMRAN: Thanks Penny! Stephen?
STEPHEN: Penny, well said. Speaking from the consumer’s perspective, I think we are very desperate and also getting ready to spend. By the market, actually we have covered from there. Looking at the entire landscape of retailers, they are all preparing themselves. This is the time where they really have to go all out, especially we are looking at the end of the year. It is a super peak season, super peak period for the retailers to prepare themselves for. I think the recovery plan came in just in time. We know, looking at the statistics of where we are today, we already have up to sixty percent of the fully vaccinated of all the adult population we have, and by the end of October, the ministry is targeting to reach up to eighty percent. It is basically a good situation, and we can’t back to the previous situation, where we are expecting zero covid virus anymore. That will not be feasible, and will not happen in the near time soon. We have to think about how we have to live with it, how retail should start thinking, how they can actually live with the virus. So what are the solutions we can actually implement? What are the technologies that they can power up from there? That is basically from my point of view.
IMRAN: I think you guys touched on very important points. Even for me, with my family, and I know you guys also have families. With the lock down fatigue, a lot of people are like, I want to go out, I want to spend, I want to meet my friends. What we see from data, from Malaysia, it’s that when we open up, the re-opening is still not the same level as pre-covid. That’s where you talk about the new endemic. What’s the new normal going to be like? That is expected for the short term. But where I will ask is, what about the long term growth? I think you alluded to some of those, what are the opportunities, maybe we need to chiong a bit for Q4, how do we chase for the rest of the year? For the long term growth, what do you think are the opportunities that retail should be looking at?
STEPHEN: Perhaps we are looking at the statistics we have today, from the news that we actually perceive, from this retail group malaysia. Last year, the conclusions from last year was one of the worst years since the year of 1998. The previous recessions that we have. It is the worst in the year of 2020. And this year, they are expecting the growth to come back. Right now, beginning of this year, we are basically doing growth for 1%, but for the entire year of 2021, they expect it to go back to 4%. Right now, we are still only in between. Of course, with all this MCO, EMCO, the different versions of the implementations itself, it will definitely be slowing down to hit the expected 4% growth for the entire retail statistics that we have today. This is something that we need to understand a little bit. How can we chase up the number we have, how can we encourage more spending there? I think the second part is also very important. You have to understand the entire landscape, 60% of the consumer spending is coming from Klang Valley for Malaysia itself. So the 60%, how can we encourage all these people. But sad to say, unfortunately also, I would say that the entire half year of 2021, the restrictions, lockdown, actually happen in Klang Valley, because we have the highest hit of covid statistics. One side you have 60% spending coming from Klang valley, the other side, we are restricting all these restrictions, rules, policies within Klang valley itself. That all comes in into a conflicting situation. That is basically something that we really have to look at. From the long term perspective, we are looking at at least from the statistics also, we have to reach out to 2024, the year of 2024, in order for you to recover back to the year of 2019. So we still have three to four years, I would say a three year plan that we want to focus on. The strategy that we have is very important, we have to think about the short term strategy and the long term strategy as well. But if your question is coming from the long term strategy perspective, I think there is no other best answer to think about retail automation, to think about retail transformations, to think about the omni-channel to shape the entire customer behaviour we have. The era of online is already there, and will continue staying with us. So what is your strategy? Those questions should always come from the top management of the retailers and mall operators.
PENNY: To add on to what Stephen has shared, if you are looking at the recovery plans on the long term basis. Governments also have to play an important role, what would be some of the simulation packages? If you would be able to boost the badly hit small medium industries on the SME part. We do know that over the two years, the badly affected SMEs, we have a slam of 60 - 70% overall in terms of business across the industry. If that is the case, what would be the next step that we can actually shorten the whole recovery in terms of the economics for the industry portions of it. It covers maybe, the national fourth industry, the policies, what are the other recoveries that the government can come in to support? I believe on the SME part, we would like to see all these support, in a way.
IMRAN: I think you touched on very interesting points. Stephen, you talk about the omni-channel group, and the transformation of the whole industry. And I think this covers both big business and small. The other part you talk about is the concentration, 60% of Klang, for example. When we look at concentration, obviously in the retail environment, we would see malls as hubs of retail, and that is where they also touch hundreds of small retailers at the same time, like what Penny said. There seems to be a need to coordinate big business, SMEs, governments, there needs to be coordination. And together with the transformation and omni-channel, I think all of this can be formed into one thing, data. So how do you guys think about this data? For example, if I am a customer, I used to be buying offline, then the lockdown happened, then now I am buying online. For a retailer, for most of them, the online business never fully recovered from the loss of physical. So I think moving forward, as you said, the strategy is omni-channel. For that to happen, you need granular data. So what do you think the strategy is for collecting this data, using this data moving forward. Especially for an ecosystem level, let’s say we look at physical marketplace of a mall, and many many merchants inside of it. So both from a technical or loyalty point of view, and of course from a brand activation, cross promotions point of view. I would love to hear your thoughts on this.
STEPHEN: Let’s zoom into a very specific digitalistions of where we have today on the retail side of it. It is a very fun fact, in China, they use this new retail, as a term of it. We have this connected retail as a term, but both are basically serving the same objective. Both are delivering the same goal. The entire blueprint of a connected retail is pretty much quite large, widely impacted, or I would say, influenced on the different factors when it comes on. Small retailers, medium sized retailers, and of course big retailers, and mall operators will work together in the entire chain of retail, if you ask me. It will no longer be a situation whereby I only want to focus on my strategy. You could be giving out 90% of discounts in a specific location, but if the mall is not supporting that, there is no way your reach, can reach out to all these people. Penny would have a better explanation on that. But speaking from the customer data platform, this is where our core is, by implementing what we call customer data platform or solution, to this connected retail, very specifically for the industry of retail. We want to enable omni-channel between the physical business, and also transforming themselves to a digital business. We have a publicly listed company, which is one of the largest retailers in the action industry. For the past 25 years, they also are focusing on physical outlets implementations, and also opening new outlets to generate more revenue, but throughout this pandemic, the entire decision making by transforming the business from physical, then shift the focus to digital, is just like within a span of 6 months. Immediately to pull all these businesses, make it available online, especially on a mobile-first channel that they have. We always use this term, mobile first, throughout our entire business discussion with this publicly listed retailer, partly because if you look at malaysia statistics, 96.7% of people are actually accessing the internet via mobile phones, mobile as a channel, smartphones that we have. Even my parents, at the age of 70, before pandemic, smartphones to them is not something that they are craving for, it is not something that they are looking for. But then throughout this pandemic, they even learn how to use smartphone, raising their hands and say they need a smart tablet. The entire pandemic situation, if you ask me, is definitely proving to you the consumer is much more ready than before. So you as a retailer, you as a business owner, what is actually your strategy, reaching out to all these customers, pulling out the data, and trying to analyse from there. Of course, there are many different data strategies that you can implement with that. But we do not want to implement everything to a full scale implementation. The most basic one that we go down to the business, and start the transformation with just the first step with them, is to enable them with all the omni-channels that they could possibly place their business on. I think that is the first part. Secondly, we just want to go on and help them to capture all this data and pull it into a centralised platform, where they can start looking at the data they have. Rather than right now, the data is actually residing on POS, the data is in the finance system, or the ERP system that they have. What about the customer data that you have a 360 view of all this data, and also the purchasing, the behaviour that they have. That is something that we want to implement, and we think this is a must implement solution if you are talking about connected retail, between physical and digital.
PENNY: Just to add on to what Stephen has shared, I believe in a nutshell, it is more about the O2O. What we are seeing, in terms of the positive perspectives of this whole pandemic. It actually shortened the whole digitalisation transformation world wide. Progressively the pace of malaysia. If this transformation or digitalisation, might be taking us another 5 to 10 years. But within these 2 years, we can see this total shift. Stephen has shared as well, parents are asking for smartphones yeah? They rely on smartphones, everything they start to learn, just overnight. They learn about e-wallets, yeah. Because of all this, it is a very good indication and also opening a new perspective for the industry. Say in terms of the O2O, obviously the conventional marketing and all that, still plays an important role. But also with the add on of this generally overall O2O, digitalisation, and how we can convert from online to offline, offline to online. It opens up a totally new perspective. I would say that it is very good in terms of the marketing part for generally SMEs. We are looking at the new marketing strategies per se.
STEPHEN: I also want to touch point on the loyalty side, Imran you have mentioned about it. Of course, that is the first part one, in the business transformation we have. Placing the business and enabling them data, omni-channel. The second phase that we are doing for the same customer just now, is to digitise their loyalty card. The physical loyalty, I think that is something we should throw away. We want to show to you, screw the loyalty card, we should throw it away if you ask me. There are plenty of ways you can actually implement loyalty in a more effective and efficient way. Not just you buying something, I would reward you on something. There are a lot more customer insights that you can find from there. By enabling omni-channel, immediately you are able to see that a lot of customers are coming from mobile, coming from the digital side of it. So how can you enable, and interact with all these users, for example, in the morning from 9 - 12 o’clock is an off peak business hour for them. Can you enable 5% to attract these people to come in. You probably have seen Shopee use this to earn this for shopping. Those are the things that you can do in terms of stickiness, in terms of customer loyalty coming from them. Not just only if you buy, I will give you. There are a lot of things where you can be the one to aggressively go out and touch on all these customers within the mobile channel that you have from there.
JUN: I think both of you bring interesting points. Omni-channel, customer journey platform. We have to collect data from every system. Previously, a lot of guests also discussed omni-channel to collect data. They are always facing a challenge, which just now Stephen you brought up very good use cases. If we can understand customers' spending behaviour, and we then during a peak hour we give them a certain discount. But when we try to collect the data, when we talk about if I want to jump into more detail, even transactional data. Does this transactional data, when you provide a loyalty programme system for the last mile data collection system, or the last mile understanding the customer spending behaviour, what do you think the transactional data, or does transactional data can really help for a vendor, for malls to really understand the customer spending behaviour?
STEPHEN: We have a huge debate on this, if you ask us. When we speak to customers, they always think that transactional data is something that they have, and that’s the best that they can collect, from the POS channel that they have, if you are talking about physical retailers. There are a lot more that are coming in. For example, from the customer data perspective, transactional data is only telling how much they have spent. That is basically the max of it. We believe 80% of the retailers out there, they do not specifically record down what is the most sellable product in the past X number of months. If they have the data of this, what are the innovations can they come up with? What are the marketing campaign, marketing strategies that they can get out of it? I would say the way they implement the strategies is that they implement first, then I collect the results of it and come back and improvise on it. But can we really powering all this data and tell you what is effective and what is not effective from the past? By skipping through the trial and error approach that we have. Transactional is where users already spent, then you collect, then you analyse it. But from here, can you add additional layers on top of this transactional data, by enabling a much bigger focus or portfolio of the entire data, such as what is the linkage between receipt 1 and receipt 2 and receipt 3? Why this person walk into a shopping mall by going through all this spending with the transactional data that you have? Of course, being a human being, I won’t be sitting in front of a laptop, looking at the data, and I try to analyse and ask myself a question and come up with a report. I won't be doing that. The employees today won’t be doing that. But can you empower the data platform that you have by creating all these linkage of this. I think today, machine learning allows you to do that, allows you then also, in a very fast manner. For beauty products, to hair care, to F&B, to check out the last station, a cup of coffee at Starbucks. That tells you the entire chain of it. So what we are trying to address over here is, you don’t look at a single receipt from a transactional data perspective, and then make a recommendation on that. We have to look at the entire chain of spending within the same day, so when walk into the mall, what would be the behaviour trends that they have. Then you go from there, what do you do next? Basically that is what we are trying to deliver over the platform we have today.
JUN: I think this is what normally we call the shopper journey, what you are trying to mention. I know the customer went to shop A, they go to starbucks and order a coffee, and then they go to a 7-11 and buy an ice cream. I know Stephen, you are offering a loyalty programme, customer data platform to the mall. Just now you touch a little bit of it. Any specific use cases, if a shopping mall, they are able to get the transactional data from every single outlet, how powerful can this be, how powerful can this be to a shopping mall and drive more customers?
STEPHEN: Very challenging, I would say. The technology is already there, but the adoption of the shopping mall, I think is where there will still be more education, nurturing activity or exercise that we have to do it together with the shopping mall. Looking at the bulk of shopping malls today, they always rely on physical sales, physical collection of the data, where you spend in this retail, and then you have to go to the concierge or customer service counter, showing the receipt and redeem something from there. That is how they collected the data in the past. This is the gap in between the retailers POS, the shopping malls’ data collection channel that they have. This is the part where we have to find a very specific solution in order for us to address it. Today, with our expanding of implementing into one of the shopping malls we have, or even implementing to one of the retailer. The collection of the transactional data is always a very big question mark. Even though, yes, the bridge is there, how real time can it be? Can it be as real time as per second basis, before the consumer walk out from the mall, immediately the next voucher will come to them already. That is something that we have to think along the way. Yes, I do understand the shopper journey is there, but how fast you can go in and tap on the shopper journey before you basically lose the person from driving out of the parking lot itself. There are two perspectives you have to look at it. One part is that technologies today have to come in and work together with shopping malls by integrating it. We just talked about omni-channel, we talked about connected retail. Connected retail is very specific, one of the criteria is that, the retailer and the shopping malls, as well as the shoppers will have to get connected. But without the connecting bridge between the retailer and also the shopping mall, I think that would be very difficult for us to address or to achieve the objective we have with the connected retail blueprint we have today. The second perspective we have is once you get the data, how real time, immediately can all the marketing campaigns, the rewarding campaigns can step in and offering the shoppers with a more rewarding experience. To retain the customer loyalty from there, to attract a customer to take a shortcut to social media, before I step out, I will be rewarded by this shopping mall with a cup of coffee. I think that kind of experience is very difficult for us to find in the market that we have today.
JUN: I think I want to use this chance to promote Aimazing. Stephen mentioned about the gap, the real time gap. That’s actually what we are able to solve. If you are a loyalty programme, a mall, if you are facing some challenge in collecting the real time data, to pump into your loyalty programme and you are able to get this real time data collection and real time triggering. That is what we are trying to offer to the market.
IMRAN: Like what you said Stephen,, it could be as simple as last time I have to transact, buy something, get the receipt, go to the concierge, then I got to fill up a form and put in my receipt, take picture, or maybe upload on to an app, maybe wait 3-5 working days, then maybe I get my rewards, maybe I get rejected. It should really be as simple and immediate as getting the rewards online on an e-commerce app today. That should actually be our base case, even the ideal. I think we are very close to that. Like you said, there blocks are there, the theories are there, the players and technology are already there. It is just a matter of implementation and adoption.
STEPHEN: You are absolutely right about that. One of the key points that we are reserving for the end of the session, is one of the implementation of the future of retail. Be it the mall, be it the retail, whether you are small, big or medium. One of the key success factor is that you make your customer comfortable is the clean and contactless implementations you have implemented into the in-store experience that you have. How can it be contactless? That is exactly the use cases of Aimazing that comes in. You wouldn’t want to carry a physical card and pass it over to you, and you take over the card and you swipe it. You don’t want to be able to give a stamp card for them to scan, to contact it again and pass it back to you and keep it in your wallet and bring it home. Especially for the customer, over the counter customer service desk. If you ask us as a consumer, if there is any possibility, I want to get away from that.
IMRAN: It is not a convenience issue now anymore, it becomes a safety and health issue as well.
STEPHEN: Yes, yes, that is the number one, I would say, consideration that we as a shopper or a consumer have in mind, always.
IMRAN: Yeah, maybe at this point, cause we should be wrapping up soon. I think we will go to some key specific advice for players. So maybe Penny I will start with you first. What would be your advice be for retailers listening in right now? There are a lot of noise, there are a lot of things going on, what would be your one piece of advice?
PENNY: It is actually more about opening up the door for digital transformations. A lot of times that the immediate things for the adaptations would be e-wallets, that would be more, in terms of retailers initiative. If you are coming from the mall perspective, we can see how we can have a totality shopping experience with e-wallets. We also come to the safety issues of the transformations.
IMRAN: Thank you. Okay, and then Stephen for you, if you have a mall manager in front of you, or listening right now, what would be your one piece of advice?
STEPHEN: There are many advices that we could implement. For the retail industry. I would like to specifically mention about one of the key points that throughout the entire, this is actually coming from a business perspective, solely coming from a business perspective. Whether you like it or not, all these shopping mall operators, or retailers, you should have your own mobile first strategy. Speaking from that perspective, the reason is, it goes down to the report and statistics that you have. Today, we are talking about newer generations. Generations like Z, generations like Y. They are all living in the world of mobile that we have today. So, you cannot omit that that is already a given fact. I wake up, I look at my mobile phone. Before I sleep, I also turn on my mobile and do my last checks and all this stuff. So what is actually your mobile first strategy? Can you enable business throughout the mobile first channel that you have. Of course, implementing mobile first strategies is not as simple as just getting a provider to come in and create an app for you. I think the app strategy as well as the brand strategy will have to come together. When you put yourself into the world of digital space. You are no longer talking about getting your shopper to come into your mall, and try to lock down the person in the mall. You basically have a lot more other competitors within the landscape you are facing today. The brand strategy got to be there. For the customer to understand your brand, and express interest over the brand you have. The mobile strategy, the mobile first strategy should be there. By providing more services to them, enabling the interaction between you and the customer. As a retailer, or as a shopping mall operator. That is where our expertise comes in. That is where we can have a deeper convers