ASIA NEWS NETWORK
WE KNOW ASIA BETTER
New era dawns for Thai retail industry
Publication Date : 07-05-2012
Buffeted by many winds of change, the retail industry will enter an era of transformation, which will lead to a totally new "ball game" with new rules and roles.
Chatchai Tuangrattanapan, director of the Thai Retailers Association, said last week that the uncertain business environment has made it difficult for retailers and their suppliers to make plans.
Compounding the challenge in the years ahead will be increasingly inscrutable consumers, who will be more difficult to understand and much less predictable than ever before.
Consumer demographics will be less of a determinant and life stages will be less relevant. Lifestyles will be more idiosyncratic and buying behaviour will be more complex.
The road to 2015 will see an evolution in how retailers create value for consumers and shareholders.
The efficiency era, which drove unprecedented industry consolidation and changed the face of retailing forever, is nearing its end.
The push is on into the promising era of the intelligent value chain, where smart technology and demand-based management optimisation tools will enable the execution of tactical merchandising decisions based on real-world consumer demand, he added.
Buppa Lapawattanaphun, a lecturer in corporate identity management and communications at the University of the Thai Chamber of Commerce, said that although the retail industry could predict future trends and create strategies to cash in on those trends, it may be more practical if retailers step back to audit themselves and find their own actual identity.
They need to understand intimately what makes themselves different from their competitors in the eyes of consumers.
This is because a strong corporate identity will be a vital factor that helps retailers to stay sustainable amid intense competition in the retail market, where all marketing and promotional campaigns have been applied from the same marketing bible.
The tricks of the trade include discount promotion, experience marketing, offering of store format variety and one-stop-shopping initiatives, which offer shoppers both functional and emotional benefits.
The retailing scene has gradually passed through phases from the department store era in 1957 to the specialty store era in 1967.
The market came into the era of stand-alone supermarkets in 1972 and shopping malls in 1977. The decade from 1987-97 was recognised as the blossoming of modern retailers.
Then the 1997 financial crisis forced local retailers into financial difficulties. This allowed big foreign retailers to expand and dominate some modern retail sectors.
Going out of style is the "one store fits all" model, as retailers will be segmented to meet the niche demands of shoppers. Medium-priced retail brands will disappear, as lower-price retailers will move to offering mass-quality, inexpensive products.
Premium-quality, premium-price retailers will launch an attractive discount strategy to attract cost-sensitive consumers.