The Centrality of Customer Experience in Attaining Growth for Asian Retailers

Introduction

As the world becomes more digital and the internet penetration rate increases across APAC, more and more engagement is shifting online -- including shopping. In Southeast Asia, the internet economy has been resilient, hitting US$100 billion in 2020, and with revitalisation in 2021 is on track to surge upwards to around $170 billion GMV. The region is now poised to surpass previous estimates and reach ~$360 billion by 2025. With consumers spending more time and money online, businesses need to respond and digitally transform their offerings faster than ever.

However, in their rush to shift their operations online, many businesses have missed the crucial point of shifting their mindsets, as well. Our research has found that businesses are not optimising the checkout experience, causing them to miss out on crucial revenue growth. Businesses themselves have also highlighted the fact that a lack of adaptation of business models to the online environment provides a risk of revenue loss.

In this article we summarise the focal points of a discussion between Danny Levy of WBR and Paul Harapin, the Head of Asia Pacific & Japan at Stripe, and the findings of research conducted by WBR Insights and Stripe, looking at how these issues can be fixed if Asian retailers keep customer experience at the centre of what they do.

(Paul Harapin, Head of Asia Pacific & Japan at Stripe)

Listen to the full Digital Transformation & Leadership podcast episode below, or read on for the summary:

Where Businesses Are Losing Crucial Opportunities for Revenue Growth

Our research has shown that adaptive enterprises are expecting that more than 50% of their revenue will come from online channels by the end of 2021. Stripe commissioned Forrester Consulting to evaluate the payments technologies, strategies, and future capabilities that firms are investing in to become more adaptive. The survey sought the views of 495 senior retail executives and payments decision-makers from across the globe, 167 of whom were part of the APAC region, including Australia, Japan, and Singapore.

The encouraging news is that retailers plan to expand, rather than contract, their businesses during the pandemic. They plan to accomplish this by creating new revenue streams and/or increasing their global reach in an attempt to respond to evolving consumer behaviours.

However, retailers are facing obstacles in their attempts to accelerate and expand revenue growth. Expansion into new markets -- especially international ones -- and the launching of new business models requires significant expertise and resources. International expansion carries with it a heightened risk of fraud, requiring organisations to beef up their internal security and also possibly to hire external security consultants and service providers. Our research findings reveal that 31% of APAC decision-makers say they have experienced increased fraud attempts, with a further 24% citing an increase in more sophisticated fraud.

There are a number of complexities associated with cross-border and international expansion. When moving into new markets, retailers must navigate their way through often conflicting regulatory demands, the nuances of local markets, and a diversity of preferences for methods of payment.

Changing patterns of customer behaviour also pose a significant challenge to Asian retailers. In order to sustain and increase revenue, retailers must invest the time and resources needed to create new experiences and business models that cater to the shifting demands of consumers.

Why Customer Experience Is More Important Than Ever

Online retail is very much on the rise, with 61% of consumers surveyed in the Asia-Pacific region saying that they have increased their online shopping in the past year, with over one-third at least doubling it. In fact, retail eCommerce sales in Asia-Pacific are projected to be greater than the combined sales of the rest of the world by 2023.

This growth puts eCommerce consumers front and centre of the priorities list for Asian retailers. It also emphasises the need for organisations to successfully capitalise on this potential by offering the best customer experience possible, in the face of heightened competition.

For Asian retailers, this needs to go beyond the core strategies of promoting brand awareness, optimising web sites and eCommerce portals and driving traffic, to address concerns which are central to the hearts of consumers, such as a quick, convenient, and seamless checkout experience and their preferred options for payment and order fulfilment. Stripe research discovered that in Asia, 95% of the top eCommerce sites have at least five basic errors that cause friction in the checkout process -- and nine out of ten sales are lost at this point. Checkout optimisation is therefore critical for retailers looking to retain customers and increase revenue.

In Malaysia for example, by focusing on the customer experience and working to optimise the mobile checkout experience, Flower Chimp has observed a 40% increase in conversions. Optimisation has made checkout more seamless and intuitive, enabling Flower Chimp to more readily capture transactions at the point of excitement, when the customer is most eager to buy.

(Flower Chimp, a flower delivery service, Source: Stripe Case Study) 

The Importance of a Customer-Centric Approach

Creating experiences that customers value and which promote loyalty to the brand requires retail organisations to put the consumer squarely at the centre of their strategic, marketing, and implementation efforts.

Online shoppers across Asia-Pacific expect a quick and intuitive payment experience, which is optimised for mobile. As an illustration, 34% of consumers that we surveyed say they would abandon a purchase if it took more than two minutes to check out. Yet 53% of consumers we surveyed said that, on average, it takes them more than three minutes to complete a purchase.

Too many existing checkout processes are long and complex -- and in direct opposition to what consumers want and expect. Customers want clicking “Pay” to be the final step in their purchasing journey. They do not want to have to go through a checkout form twice in order to fix basic errors. In addition, they want checkout forms which adapt to their preferences and location.

There is clearly room for improvement. The good news is that there are steps which Asian retailers can take now, to become more attuned with what customers in the region want and expect.

How Businesses Can Become More Customer-Centric and Attain Growth

By addressing customer concerns such as providing a seamless checkout process, guaranteeing the safety and security of online transactions, and providing the preferred payment methods, businesses can expect to improve the overall shopping journey for customers to follow through with their purchases. In this light, Asian retailers should bear in mind the following recommendations and best practices:

• Prioritise the customer experience: Businesses should take an active approach to put customer experience at the centre of their operations, which they can do by addressing checkout and security concerns, as a start.
• Streamline and optimise the checkout process: Provide real-time error messages, auto-completion options, and the ability to save payment information. Optimise forms for mobile.
• Provide a range of payment options: Make provision for payment methods favoured by consumers in Asia-Pacific such as Buy Now, Pay Later, which is highly popular with younger buyers using services like AfterPay in Australia and New Zealand, and China’s Alipay. Provide dynamic options which surface depending on a buyer’s location, currency, and device type.
• Localise for language and currency: Having established your target markets, localise the checkout experience by translating the page into the relevant local language and displaying local currency.
• Harness the power of payments technology: Payments technologies provide powerful tools to help retailers manage fraud, offer consumers more choice in how they pay, and improve data-driven decision-making.

This article was brought to you in partnership with:

Stripe is a technology company that builds economic infrastructure for the internet. Businesses of every size—from new startups to public companies—use our software to accept payments and manage their businesses online.