In this post, Jaime Syjuco, Managing Partner of Moda Pacifica – licensee for Havaianas in Singapore – explores the role retail tech will play in solving brick-and-mortar’s problem of falling foot traffic. This is re-posted with permission from LinkedIn.
I am embarking on a Quest: To use technology to evolve my brick-and-mortar retail stores and adapt to the crushing forces affecting the retail industry.
Wow, big words, I know.
Who would’ve ‘thunk it, that just 3 years ago, growing our brick-and-mortar business was still so straightforward. As we steadily grew over the previous years, I followed all the right technology investment steps: we invested in ERP, CRM, eCommerce, POS, inventory management, store sensors, online presence and digital marketing. After all, this is what all the big guys were doing, and well, I wanted to be a big guy too, one day.
Yet today in our Asia market, where mall-goer traffic has crashed (I’m measuring magnitudes of >-30%), the investment economics of physical retail stores is under siege. With an industry-average cost-of-goods at 50%, rent at 25% and labor at 15%, there’s very little headspace left when mall-traffic drops by -30%.
Naturally tech vendors have responded with even sexier solutions: omni-channel, mobile apps, data analytics, artificial intelligence, business intelligence, offline-2-online, beacons, heat maps, RFID, digital coupons, smart mirrors, customer experience, IoT, click-and-collect, etc. etc. etc.
Yet there are still NO success-stories of any brick-and-mortar retailers that have succeeded in fundamentally turning their businesses around with any of these new tonics. So despite vendors’ best intentions to help us, the burden still falls solely on me, the one that signs the cheque, and risks the dividends.
So why am I going to do MORE retail tech?
Because I believe I may have figured out how to untie this Gordian knot.
My hypothesis is that NO clear solution exists yet on how physical retail can adapt to the new landscape. And we retailers also know that deploying any new tech platform across our companies easily takes 6 months to a year…too slow to adapt, too expensive to afford, too risky to bet our careers on.
Hence, while keeping my eye locked on the fundamentals (margins, traffic, conversion, ATV, service, stock turnover, branding), over the next 2 years, I am going to rapidly TEST in small-scale as many of these retail-tech bullets as I can. When I say rapidly, I’m talking 1-month tests.
With Amazon recently becoming the world’s largest retailer both online and offline, opening cashier-less physical stores, and successfully making their first delivery by drone, I’m not betting my brick-and-mortar job on waiting for the right physical-store solution to appear in time on its own. I’m going to learn how to untie this knot myself.
I will be documenting my progress weekly, and urge you, my other retailer-colleagues, to also share your feedback, findings, advice, questions and battle scars. Together, we can quickly evolve and survive this.
Warp speed please, Mr. Sulu.
Syjuco is set to join more than 200 other e-commerce, retail and payments professionals speaking at Seamless Asia. For more information, download our brochure here, or go right ahead and register here.