Indonesian Retailers Need Better Digital Integration

Integrating with digital platforms will enable Indonesian brick-and-mortar retailers to better engage with customers, who are increasingly shifting their spending from goods to experiences.

“In Indonesia right now, our retailers underperform… because our customers are already shifting,” Roy Nicholas Mandey, chairman of the Indonesian Retail Association (Aprindo), said in a keynote speech last week during a conference titled “Consumer in Focus.”

“They are already shifting from a shopper lifestyle to a leisure lifestyle,” he said. In the pre-2014 “shopper lifestyle,” customers took time to explore retail selections at shops and made more frequent purchases, Roy said.

The “leisure lifestyle” after 2014 has seen customers spend less time at shops, directly buying the products they are looking for and leaving, he said. That has diminished opportunities for retailers to entice customer to make additional purchases.

Central bank data shows that retail sales only grew at 4.9 percent in the second quarter of this year compared with the same period last year, while annual sales growth used to be in double digits prior to 2014.

Capillary Technologies, a Singapore-based customer relationship management and e-commerce omnichannel service provider, has pointed out that the integration of brick-and-mortar shops and digital platforms may be the key to surviving the challenges in the current retail environment.

“Consumers do not perceive brands independently of the platform or medium in which they appear, necessitating a cohesive ecosystem where brand and consumer can smoothly interact,” Abhijeet Vijayvergiya, president and managing director of global accounts and Asia Pacific at Capillary Technologies, said in a press release last week.