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. (Antara Photo/Yudhi Mahatma)

Indonesian Retailers Need Better Digital Integration


AUGUST 20, 2018

Jakarta. 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.

"Additionally, multiple touch-points are needed to connect everything to a single system, such that a unified perception of the brand is conveyed to the consumer. Surrounded by disruptive technology, brands must possess adaptability to turn this obstacle to their advantage, as well as engage in introspection and consumer-readiness for the sake of surviving the industry's current environment."

During last week's conference, jointly hosted by Capillary Technologies and its business partner GenieTech, the company discussed four areas for retailers or brands to become more consumer friendly. These include understanding customers in the digital age, being seamless, technology-powered one-on-one engagement and powering commerce with artificial intelligence.

Capillary Technologies is currently working with several Indonesian companies, such as hardware chain store Mitra10, gas retailer Badak, smartphone retailer Erajaya Group, restaurant chain Mujigae and bakery Mount Scopus Group Indonesia to improve their customer relationship management.

"We want to become the first big IT product company from Asia that is expanding globally," Vijayvergiya said during a post-conference interview.

"So, whether it is working in Indonesia, working in China, working in Thailand, working in Malaysia – so we want to really localize. So, our approach is that, while we build global products, but we localize in the markets we go to solve local problems."