Millennials and GenZ are currently the largest consumer group by purchasing power. Their buying behavior and brand loyalty are also significantly different from previous generations.
Millennials live in an age where technology changes faster than any previous generations. Therefore, they seek out and expect customer experiences that are better, more unique, more personalized and most importantly: instantaneous.
This is forcing many business models to adapt and change their fundamental values, especially within the retail industry, at the critical risk of being left behind.
World-leading digital markets such as China or the United States have already witnessed new retail models, adapted from e-commerce business models. In Vietnam, ¾ of consumers have online shopping habits. According to Forbes, by 2025, e-commerce will take up 10% of all retail revenues. New retail business models will penetrate Vietnamese markets in the forms of both B2C (business to consumers) and B2B (business to business).
To innovate, towards discovering new business models, retail stores especially traditional e-commerce ones can focus on either one of two approaches: customer experience-oriented and sales functions oriented.
The experience-oriented store is where customers go to interact with the brand and experience products before buying. Currently, most consumer electronics retail chains have an exhibition space to showcase products with activities that will allow customers to interact with items, immerse themselves in the experience or talk with product experts.
Functions-oriented stores meanwhile are suitable for digital products that are easily brought online but require customers to consult with product experts before buying. The FPT Shop chain, a part of FPT Retail (FRT) or The gioi di dong in the past few years have to lead the market due to their free consultations for customers who are buying their tech products, from mobile devices, laptops to accessories like headphones, wireless mouse…
Besides technology innovations, the role of brand cultures cannot be underestimated when we consider the customer’s purchasing process. The generation gap has changed the consumer-based on preferring word-of-mouth suggestions, to accepting or even expecting recommendations made by algorithms. The customers now expect a shopping experience that is curated and feels uniquely personalized for them.
According to Forbes Vietnam, with the rise of e-commerce and e-economy, companies that successfully leverage customer data will gain significant competitive advantages. In reality, for people who use the internet regularly, most of their data including previously searched terms, private information saved on social media or receipts of purchases made, are all saved on their browsers and can be used to better understand customers’ demands.
FPT Shop currently owns the second-biggest consumer electronics retail chain in Vietnam, with the highest revenue by sales floor area in Vietnam. However, Mrs. Nguyen Bach Diep, President, and CEO of FPT Retail commented that the company has already been pursuing digital transformation. She believes that “companies which do not prepare for digital transformation are guaranteed to be left behind and die out”.
Full Cycle Digital Transformation
FPT Digital, FPT’s digital transformation board, has successfully consulted FPT Retail on their digital transformation journey. This includes: business consulting, technology consulting and customer experience consulting. Mr. Phuong Tram, FPT’s Senior DX Advisor revealed that a company needs to synergies, constantly update and synchronize between IT platforms, business operations, and management tools. In order to do this, the business needs to solve fundamental problems such as automation, supply chain management, and technology development in order to provide the best customer experience.
FPT Retail has built data analysis centers using the latest AI technology, focusing on analyzing customer segmentation, to better personalize each customer’s needs.
Currently, FRT call centers are using chatbots to answer questions from customers and provide information on products, promotion programs on the e-commerce site as well as at FPT Shop stores.
Specifically, this Pika Chatbot, utilizes the FPT.AI platform to perform natural language processing. The Pika Chatbot are becoming more intelligent as it is using the massive amount of data it receives from daily interactions with customers to train itself. When it receives a question from a customer, by relying on natural language processing, the chatbot will locate keywords to understand the question’s meaning and from there provide an appropriate answer.
Ms. Tran Huyen Trang, Manager of the Affiliate project at FPT Retail’s E-commerce Center said: “The problem facing FPT Shop’s chatbot is processing customer issues that we really care about. When the chatbot can help consumers lookup accurate information and erase the boundaries between man-to-man and man-to-machine interactions, customers will be more interested in making purchases.”
FPT Retail is not only providing digital upgrades to customer facing services, they’re also deploying software such as mSM, MPOS, MDelivery that the company researched and developed themselves to improve internal operations.
All these technology applications help reduce sales consultation and order completion time by 30-50%, from 45 to 15 minutes.
Particularly with the mSM software, each FPT Shop store manager can immediately access business data or sales data from each employee and each shop, in order to correctly adjust or promote sales activity. This application also allows users to easily export data into excel files or send data through emails, as well as looking up information on the company directory.
Making sales report will now only take up a few minutes, instead of hours or days to contact different department. With real-time updates, mSM’s data is guaranteed to be accurate, thus improving FPT Shop’s business efficiency.
Although FPT Retail already has a comprehensive digital strategy and has already achieved success with it, the company still needs to urgently solve many difficult pain points. But with FPT Digital as their companion, FPT Retail can quickly reach the end goal of their digital transformation journey, disrupt the market and become a leader in the retail industry in Vietnam.