Retail in Asia

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Asia retailers should rebuild customer loyalty with social media

Retailers in Asia should start looking at the social media to develop their brands and create greater customer experience, Jason Chu, Chairman of Asia-Pacific Customer Service Consortium told audience at Retail Innovation & Management Forum 2012 in Hong Kong last week.

Technologies are reshaping the retail environment. Smartphones and tablets continue to transform consumer behaviour, from how they search information, make decisions, shop and connect with others which brings challenges but also opportunities for retailers. How to retain customers and encourage loyalty? Are the existing loyalty programmes effective? Chu noted these are questions many retailers are asking.

"Many loyalty programmes – VIP cards, mileage programmes – have grown in popularity with businesses," said Chu. “But a lot of times they are not as effective as the retailers want them to be, as customers are looking for something new.”

"How do we give priorities to customers when they are all within the same loyalty members? These programmes need to engage with customers and create different magic moments,” he said. “I think retailers should leverage social media and give their social media-active fans a higher priority, as social media is the fastest way to spread good words."

Loyalty card programmes encourage customers to make use of the reward points and spend at the same time. But to encourage customers stick with the brand, a finer segmentation is required to provide more customized special offers for different customer segments.

"For example, housewives are more interested at cash returns, but others are looking for rewards such as a special stay at five-star hotel. With more segmentation within the loyalty programmes, retailers can engage and grow their customer relationships," Chu explained.

He noted Amazon is a benchmark and pioneer in e-commerce retailing. He touted the company’s vigorous disciplines to created great online customer experience.

"New surprises – free delivery, special loyalty programmes – keep coming from e-commerce retailers and they are pulling customers away from physical stores. That’s a big threat for the brick- and-mortar stores,” Chu said. “The same kind of discipline needs to be created in the retail store experience. Traditional retailers need to invest in best practices in managing it’s people, store, R&D, ordering process and even e-commerce platform."

When online sales are flourishing in mainland China, Chu noted many Hong Kong retailers are lagging behind. "We have very good boutique retailers in Hong Kong and they are probably very profitable, but they have yet to invest in e-commerce,” he said. “They need to look towards a bigger market, like Asia-Pacific or Great China, and expand their online presence to reach local as well as international customers," he concluded.