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VIDEO: Tito Costa, MD of Zalora, on targeting millennials

Online fashion retailer Zalora is hard to miss in Southeast Asia, where it sells a wide range of fast and affordable fashion brands. Lately, the company has been experimenting with pop-up stores in several countries to offer a unique ‘clicks-and-mortar’ experience while capturing new customers.

On location at Retail Congress Asia Pacific 2016, we spoke with Zalora’s regional managing director, Tito Costa, about the company’s plans for going offline, their discounting strategy and how to best engage with the millennial market.

Retail in Asia (RiA): As an online company, what are your thoughts on doing business offline?

Tito Costa (TC): We did experiment with pop-up stores. There is one going on now in Manila. It’s an opportunity for us to engage with our customers in more emotional way, find a deeper connection, attract new customers and let them feel the products. You know, it’s a way to, especially in fashion world, promote your product in a more compelling way.

RiA: How does it work in your pop-up store, where customers can scan the code on products?

TC: Yes, that’s it exactly. You can see the product, try them on, and then in order to buy, you open a Zalora account, buy it in the showroom, and the products will be delivered to your home. The experience is a mix of online and offline.

SEE ALSO: Zalora goes ‘clicks and mortar’ in the Philippines

zalora-lookbook
A snap from Zalora’s lookbook.

 

RiA: Do any customers feel bad walking out empty-handed?

TC: I think it’s a way to get them to explore Zalora. It’s important for us to contextualise the omni-channel experience. They see something they like in the store. Even if they don’t buy anything in the store, they might get it on the way home.

RiA: Is there any plan to open real, long-term physical stores?

TC: No. For now, we will focus on pop-up stores [in places] where we find opportunity. Of course, we will always be 99% focused on online sales and online retailers.

RiA: How does Zalora target millennials?

TC: The majority of our customers are 25-35 years old with 70% women. The way we are engaging with them is mainly through two channels: mobile and social media. We’ve seen in mid-2014 to late-2015, a very dramatic shift in customer behaviour from desktop browsing to the mobile app, which now makes up a majority of our business.

SEE ALSO: Zalora opens second pop-up store in Singapore

The second channel is social media. The social media penetration in Southeast Asia is incredibly high compared to US and Europe with 90+ percent. So that’s where millennials are spending time and you know where people spend time, that’s where you need to engage with them.

RiA: How important is discounting to Zalora?

TC: I think it reinforces the fact that people go online to find great deals and discounts. Everybody likes good value for money and supports a company that provides good value for money. But one of our key strengths is – we provide a brand safe environment for our partners to showcase their products and their own brand story. And we see a lot of people come to Zalora because there is a wide selection and, of course, the convenience of the shopping experience.

RiA: What do you think the future of retail looks like?

TC: I think in the next 5-10 years, the most successful retailers will come out with a digital-first experience that [marries] the best of the online and offline world. On one hand, online — the right selection, the convenience of the shopping experience — on the offline side, the way that you discover the new products, you touch and feel the products.

MORE: See our video on the #FutureofRetail featuring Stylerunner, Althea, Love, Bonito, Costco Asia, Zalora and more at Retail Congress Asia Pacific. 

Retail in Asia is an official media partner of Retail Congress Asia Pacific 2016. See our full coverage from the Congress here.

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