COVID-19 Rapidly Transforms Traditional Commerce to E-commerce

9:29:03 AM | 7/12/2021

“The COVID-19 outbreak has created momentum for the shift from traditional retailing to online retailing. Powered by technology development, consumer shopping habits are also gradually changing,” said Mr. Hoang Quang Phong, Vice President of VCCI, on impacts of the pandemic on the current picture of the retail market.

Customers are now accustomed to reviewing and selecting goods online before making an order or buying at a physical store, he said. Moreover, not only buying an item, consumers also uphold shopping experiences.

These factors require retailers to optimize their resources and place customers at the heart. Applying new technologies such as internet of things (IoT), augmented reality (AR), big data, artificial intelligence (AI) and machine learning (ML) helps them provide customer care services with different experiences and values, optimize management strategies and supply chain, thereby increasing operational sales.

“It is certain that the retail market is extremely competitive. Regardless of business size, the speed of digital transformation will also play a decisive role in the existence of retailers in the future,” he added.

Contrary to the gloomy picture of shopping centers because of the COVID-19 pandemic, online shopping has grown well. A report by the Vietnam E-commerce and Digital Economy Agency (iDEA) under the Ministry of Industry and Trade shows that, in 2020, up to 53% of Vietnamese people participated in online shopping. As a result, Vietnam's e-commerce market grew by 18%, equivalent to US$11.8 billion. Digital transformation is now not only an option but also an inevitable path for businesses, especially retailers, to develop sustainably and improve their competitiveness in the context of the global crisis affected by the COVID-19 pandemic.

Mr. Le Duc Trung, Senior Partner Development Manager at Microsoft Vietnam, said that, affected by the pandemic, businesses are aware of digital transformation and refresh themselves faster. It once took two years for digital transformation; now it takes only two months. Especially in the retail industry, digital transformation must be faster because the market is increasingly competitive and customers have higher requirements.

In fact, retailers now attach great importance to omni-channel sales and apply new technologies in both sales and payment. According to a survey, up to 79% of consumers are using contactless payment methods to ensure safety during the pandemic.

However, digital transformation for SMEs is not a simple and easy process. Mr. Tran Viet Huan, Chief Technology Officer of Son Kim Retail, said, the first challenge in digital transformation is the role of leaders. After repeated COVID-19 resurgences, it is not doubted that digital transformation is necessary. Many businesses embarked on digital transformation but they encountered many difficulties. In the past, information technology was not important in the organizational structure of a company, most IT staff worked in support departments. But when digital transformation came, IT roles changed. So, employees also need a deep understanding of digital transformation. Business leaders themselves also need to be knowledgeable about it in order to choose strategic partners to go with it in this process. How to optimize customer experiences through digital transformation and become the corporate culture, all must understand digital transformation regardless of being information technology, marketing or business.

To have a successful digital transformation, it is necessary to create good experiences for customers by collecting personal data, taking care of loyal customers and applying technologies such as AI and chatbot to customer service, promoting online sales channels and home delivery. In particular, it is necessary to empower employees, provide tools for them to unleash creativity into better services and products and into smart supply chains; optimize business operations with technology application such as solutions for electronic signatures and e-invoices, and enhance provision of new, more value-added services to increase customer experiences.

“The foundation for successful digital transformation is a reliable technology platform and partners, security and confidentiality and cost transparency,” Mr. Trung affirmed.

Mr. Phong recommended that retailers always optimize their resources, place customers at the heart, and improve business competitiveness in the context of the global COVID-19 pandemic.

Reportedly, the Ministry of Planning and Investment has developed a digital transformation support program for the 2021-2025 period by integrating and applying digital technology to improve business performance, capacity competitiveness, and create new values. By 2025, 100% of businesses will have increased awareness of digital transformation; at least 100,000 businesses receive support from the Program; 100 supported businesses are typical successes in digital transformation, targeting manufacturing and processing companies and establishing an expert network of at least 100 consulting organizations and individuals to promote digital transformation.

Mr. Nguyen Tien Hung, Department of Science and Technology, Ministry of Information and Communications

To conduct successful digital transformation for the retail industry, it is necessary to have drastic changes in perception and actions of company personnel, especially the leadership. In addition, it is important to consider choosing an existing business model from a digital technology lens to pick up and plan digital transformation for the business. Specifically, we must identify specific needs of the business. It is important to pick up an appropriate model for different sizes of business and different products/services to adopt a roadmap of action. In addition, it is necessary to have knowledge of digital transformation to select and effectuate a successful model and adopt KPIs to gauge the performance of digital transformation in 3, 6, 9 or 12 months’ time.

By Quynh Anh, Vietnam Business Forum