[Newsphopick=Kingsley Lim] Amid the coronavirus and changes to consumer behaviour, Indonesian retailers have made a purposeful transition from plain brick and mortar stores to online channels and ecommerce.
According to Roy Nicholas Mandey of the Indonesian Retailers Association, many of the association’s members have adopted an omnichannel strategy. In an omnichannel strategy, retailers blend the offline in-store shopping experience with an online presence for the benefit of its consumers. This way, consumers have more choices and access to goods and services is more convenient.
“Ninety percent of our members have already changed their businesses by including an omnichannel,” said Roy said during a webinar last Thursday.
A classic example of blending the offline shopping experience and an ecommerce store would be to give customers the option to make purchases from an ecommerce store but to pick the products and goods in-store.
An omnichannel strategy such as the one described has been a necessary mode of doing business since the advent of Covid-19 where social restrictions have been promulgated by the government.
According to PricewaterhouseCoopers (PwC), Consumer Insights Survey which was conducted in 2020 showed that 69 percent of Indonesian respondents have indicated that their spending habits have shifted from an in-store experience to an online shopping experience, following the social restrictions implemented to curb the spread of the coronavirus.
The survey added that more than half of the respondents were willing to continue making online purchases even after Covid-19 blows over.
Meanwhile, Indonesia is taking steps to reopen its economy after a disastrous second quarter even as the country sees a rise in coronavirus cases. As of Thursday, Indonesia had a tally of 132.800 confirmed cases and fatalities exceeding 5900.
The Consumer Insights Survey also showed that online shopping outpaced in-store purchases, becoming the most popular mode of shopping, as the frequency of online purchases were increasing due to the ease of making purchases with a mobile application.
Half of all Indonesian respondents to the survey indicated that they often used online mobile channels for their daily and weekly shopping needs. This is up from 37 percent recorded in 2019.
Approximately 42 percent of consumers indicated that they still frequently shopped at a store. This is down from 52 percent recorded last year, confirming that in-store shopping is no longer as popular as it once used to be.
“Even as online [purchases] increased since the COVID-19 pandemic, or in fact, over the last two or three years, it still makes up less than 10 percent of total retail sales in Indonesia,” said Peter Hohtoulas while suggesting that consumers may still prefer to make less frequent, higher-value purchases in-store.
“I think in-store retail has a vital role to play and can compete well with the online store,” Hohtoulas added.
“Many consider online and offline channels as competing. We don’t see that. I think online and offline should create synergy,” said vice chairman Leontinus Alpha Edison of ecommerce giant Tokopedia, who is also a cofounder of the company.