This article first appeared in Digital Edge, The Edge Malaysia Weekly on February 27, 2023 - March 5, 2023

The retail industry is barely starting to recover from the dramatic disruption caused at the peak of the Covid-19 pandemic, with many choosing online shops over brick-and-mortar outlets, and now it has to contend with a rocky 2023, owing to the rising cost of living and doing business.

Nevertheless, despite daunting projections, the sector has done remarkably well, with new entrants coming in even though consumers were expected to pull back on discretionary purchases.

According to the Malaysia Retail Industry Report by Retail Group Malaysia, the first half of 2022 witnessed a 39.2% year-on-year increase in retail sales. Real estate company Savills Malaysia also observed a significant recovery in the food and beverage sector, along with the luxury and sports/athleisure categories. Insider Intelligence has predicted that retail sales in 2022 will exceed US$27.33 trillion (RM120.35 trillion).

Melvin Chee, CEO and co-founder of RPG Commerce, a multi-brand direct-to-consumer retail provider, speaks to Digital Edge about spearheading a successful retail business and the tools that can help one navigate the tumultuous market and thrive.

Digital Edge: RPG Commerce decided to venture into the brick-and-mortar business after being solely an e-commerce platform. What are the opportunities you see in having a physical presence in the era of online shopping? Is it still relevant and sustainable?

Melvin Chee: At the height of the Covid-19 pandemic, we created a brand called Montigo, which we experimented with by launching it on billboards. Up until two months ago, Montigo was exclusively available online.

We want to turn our customers’ journeys — whether online or offline — into thoughtful, memorable experiences because while having a digital presence is [pivotal], not everything [can be experienced] digitally. In fact, it never has been nor will it be.

As we’ve learnt from the pandemic, [the sense of] community [building] — the primal, human urge to commune, share and connect — is very much alive and well. We see an opportunity in an omnichannel shopping experience as consumer shopping behaviours shift to multichannel shopping.

Consumers want to connect physically and feel closer to brands; thus, we want to provide our consumers with a seamless online-to-offline experience with the opening of our retail spaces for Montigo.

What are the top three retail categories in Malaysia?

In e-commerce, fashion and lifestyle, beauty and personal care, and consumer electronics are the top three categories.

What are the challenges that retail businesses usually face?

[One of the biggest challenges is] staying relevant to consumers at all times. With a permanent store built, how do we constantly innovate store design to meet customers’ changing needs?

Other challenges include tough competition in the retail environment and increasing store rentals.

How has the retail landscape changed in Malaysia over the years?

There’s definitely been an increase in customers’ expectations. The pandemic has dramatically changed how people shop and how retailers connect with consumers on online marketplaces, where conditions are constantly shifting.

Now, more than ever, customers are re-evaluating their social, work and purchasing decisions. In terms of brand values, purpose and storytelling, consumers now gravitate towards brands that they can associate with and values that they align with.

As consumers increasingly embrace social causes, they seek products and brands that align with their values.

What can we expect from the local retail space next?

We can expect better product offerings from brands as the quality of life improves, as we see in Western markets. Consumers now demand more from brands and expect brands to always do better in terms of value, beliefs and building connections with their customers.

How do we prepare for this change?

[Retailers should] stay dynamic and innovative in serving customers better. The customer journey is only going to get richer and more complex [over time]; so, we are constantly tracking our consumers’ changing expectations and reacting by creating more value for them.

Retailers need to offer simple and seamless e-commerce experiences from browsing to researching, selecting, purchasing, and returning or exchanging across devices and channels.

What are the technological innovations that can expedite retail business growth?

Within our retail stores, we prioritise frictionless checkout for a quick and easy checkout process for our customers.

For an immersive customer experience, we suggest online-to-offline integration, where customers can order online and have the option to pick it up offline. This allows retailers more opportunities to connect with customers.

Businesses can also showcase deals according to what consumers are discussing online to provide a more personalised shopping experience.

QR codes should also be used extensively. Dedicated display QR codes can be used to help customers find out more about the product and explore visually rich storytelling.

We have also been seeing the trend of mobile check-out, where customers do not need to seek the assistance of retail staff or wait in a queue to make a purchase, for an even more convenient shopping experience.

Small and medium enterprises (SMEs) are the backbone of Malaysia’s economy, and most of them are starting to leverage e-commerce platforms to sell their products. How can they take their e-commerce endeavours further?

First, it is crucial for SMEs to have high-speed broadband to accelerate digital transformation.

Second, retail point-of-sale systems such as Shopify and marketplaces also help SMEs increase their customer base and reach out to markets beyond their traditional boundaries.

Third, social media is a fantastic tool to use for business visibility and outreach purposes. SMEs should embrace social media platforms to develop products and obtain customers’ opinions, reviews and questions.

We at RPG Commerce are able to grow our brands via social media livestreams such as TikTok by leveraging its live broadcast and e-commerce features to connect with our customers, get real-time feedback and promote engagement.

What is the future of retail in Malaysia and globally?

Shopping is no longer just happening on one channel — it’s an omnichannel experience, which means that consumers expect seamless integration across online, offline and mobile.

Based on my observation, shopping via TikTok will become the trend within the next year. Through TikTok’s unique shoppertainment approach, we can entertain our customers through a combination of shoppable videos and livestreams to capture a larger audience that we otherwise wouldn’t be able to reach and we can increase sales for greater growth.

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