Retail in Asia

In Telligence

Understanding the digital pulse of retail in Asia


The retail sector has been undergoing rapid changes with the shift to digital getting accelerated. Changing consumer behaviour and rapidly shifting shoppers’ journey has forced retailers to relook at their business models and speed up their digital transformation journey. As we move into a post-COVID-19 operating environment, we have seen retail businesses reacting in different ways; some trying to survive the crisis and focus on new ways to thrive whilst others lagging behind and after over one year still struggling.

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Google Cloud commissioned IDC Retail Insights to research the digital pulse of retail in Asia and understand the current status of retail digital transformation. This study (conducted across 1108 retailers across 7 countries and 8 sub-segments) looks at the technology adoption of retailers across four different stages of maturity with the aim of providing a framework to assist retailers in developing their digital roadmap for the future. The research focuses across five dimensions –strategy, people, data, technology, and process to arrive at a Digital Pulse Index (DPI) which can then be used to assess where you are in your transformation journey and plan your technology roadmap. So, what is the digital pulse for Asian retail today? Let’s find out.

Source: Google Cloud

Retail in Asia today

Given the impact on their operations, retailers in Asia have had to embrace digital to not only satisfy customer demand, but also support back-office operations. 70% of all retailers in the region report that COVID-19 has caused them to accelerate the launching of digital products, payments, e-commerce, automation etc.). However, business confidence today is mixed with just over half (52%) of Asian retailers back to growth mode and 39% still in survival mode. Inspite of the variations between geographies and segments, the acknowledgement that digitisation is the key to success is clear with the majority saying that leveraging technology has assisted in growing revenues or mitigating declines.

Google Cloud’s Retail Digital Pulse (RDP) is focused on assessing how retailers in Asia/Pacific are digitising, building resiliency, and developing competencies be able to compete in a post-COVID world. The RDP assessment gauges retailers’ digital maturity in five different areas – strategy, process, people, technology, and data – across a 4-stage digital pulse index, with 4 being the most mature. The reality today is that the overall digital pulse of retailers is low, with 55% at Stage 1 (Digital participants), 24% in Stage 2 (Digital Explorers), 17% in Stage 3 (Digital Aspirants) with only 2% of retailers that can be considered to be at Stage 4 (Digitally Resilient). However, with the majority being digital participants or explorers, this presents a huge opportunity and sets the stage for retailers in the region to develop and implement their digital strategies and break away from their competitors.

Source: Google Cloud

Drive for Digital Resilience

As we look toward economic recovery and the next normal, the key to success will be digital resilience. The Google Cloud Retail Digital Pulse reveals that the average Digital Pulse Index across Asia is at Stage 2. Advancing to the next stage will require retailers to take a digital approach across all five index dimensions- strategy, technology, people, data & process. Focusing on just one dimension will not lead to digital resilience. Current findings show good progress with respect to strategy & process. However, though the plans are in place, the lowest ranking dimension is technology implementation. Progress has to be made across all the dimensions to build digital resilience.
Digital resiliency implies that an organisation has the foundation of technology and use cases in place that enables constant innovation in all aspects of the business, from store operations to customer acquisition, merchandising, logistics and fulfilment, omni-channel commerce, and PLM. Digitally resilient organisations are able to respond quickly to external forces and to continuously innovate, driven by internal goals. Organisations at Stage 4 are in the driving seat to fast track digital and have the potential to disrupt the market through its ability to introduce innovative new business models.

The Journey towards Digital Resilience

The journey to digital resilience is not a simple one. It consists of a number of use cases that when integrated, and with the right underlying technology, provide a digital framework using data to make improved business decisions. Based on our research, we see Digital Participants (Stage 1 Retailers) predominantly focused on the optimization of current processes, with an additional focus on marketing/customer acquisition use cases. As digital adoption matures (Stage 2-3), the focus shifts to merchandising, and logistics and fulfilment. Digitally resilient retailers (Stage 4 maturity) on the other hand are focused more on Omnichannel commerce, PLM, personalisation, product discovery & search with an objective to improve overall customer experience and optimised processes across the retail ecosystem.

Source: Google Cloud

Technology adoption across the different stages also shows a distinct variation. When provisioning to lay the foundation for digital transformation and enabling the digital journey, the “base” digital technologies are security, customer engagement platforms, collaboration platforms, content management, and analytics. However, Stage 4- digitally resilient retailers have a key focus on “as-a-service” technologies. This requires a different mindset and approach to managing technology and is a clear differentiator in facilitating the journey to digital resilience.

Overcoming the challenges

The challenges to digital transformation are enormous with the lack of a transformation roadmap topping the list. The difficulty of having the right technologies in place is another challenge. Organisational issues such as digital mindset, budget and senior leadership commitment are all challenges highlighted, but there are regional differences. The key priority for retailers is really to develop a plan of how to get from stage 1 to 4, detailing the use cases and technology required to implement those use cases, and enabling the use cases to build upon each other. It is essential to think about what the technology architecture is going to be.

Source: Google Cloud

Essential Guidance

The value of digital is clear and has been reinforced by this research; the challenge is how to get there. The key is to understand your digital pulse and then plan your innovation agenda to become a digitally resilient retailer. Currently, the digital pulse of the majority of retailers is low, but we expect this to increase rapidly over the next few months. To move forward, it is critical to develop a digital transformation roadmap. This must include having a future vision of your organisation and getting it communicated across the business. In addition, having the right partners by your side can really accelerate your execution timelines and ensure a successful transformation.
Technology partners like Google Cloud and Intel can help deliver high-performance, customizable retail solutions based on the latest technologies designed to address the security, compute, and data requirements of the most demanding enterprise workloads and applications. Customers can create a hyper-convenient and curated experiences. Our era of retail digital transformation is powered by analytics and artificial intelligence (AI). By taking massive amounts of data and transforming it into actionable insights, retailers can create incredibly personalized, hyper-convenient experiences that lead to greater loyalty and revenue. Together with Intel partnership, Google Cloud is building the future of retail today—a future in which data fusion and AI provide insights from the first customer engagement, to purchase, right through to predicting demand.

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A good starting point is to identify your priority use cases and build your innovation roadmap. Think about what you already have in place; what are your priorities for the future? In creating this roadmap, seek out technology partners who can help you on your journey, and assist you in developing that future vision. The opportunity is out there for retail organisations to accelerate their digital adoption, but speed is critical in a dynamic and increasingly uncertain environment. COVID-19 underlines the fact that black swan events can throw the best-laid plans into disarray in a flash, but being digitally resilient will go a long way in ensuring business survival and success.


Sameer Dhingra is Director of Retail and Consumer for Google Cloud, JAPAC. He leads the Google Cloud strategy, product solutions and go-to-market across Asia Pacific and Japan. Working at the intersection of consumer, technology and retail, Sameer works with top retailers and brands, helping them to scale, drive technology innovation and accelerate digital transformation.