“People are queueing around the block to get into the shop where you don’t have to queue,” laughed Jaspal Johl, head of digital innovation for Amazon Web Services ASEAN.
He was sharing insider stories about Amazon’s “just walk out” technology with an audience mesmerised at the 26th National Retail Conference & Expo (NRCE) in Manila, Philippines.
Officially launched in January 2018, the Amazon Go store now has 13 locations across the United States. When you enter, you scan your phone using the Amazon Go app, and that’s it. Put your phone away and take whatever you like from the store. If you pick something up, then decide you’ve changed your mind, just put it back on the shelf. When you’re ready to leave the store, just walk out the door. Using a revolutionary blend of machine learning, computer vision and artificial intelligence, you’ll only be charged for the items you took.
“During testing, people would wait awkwardly at the door, wondering what happens next,” recalled Johl, who admits that putting a chocolate bar in your pocket and walking out the store really does feel like stealing.
“Our customers didn’t believe they could truly just take stuff and walk out.”
So that’s how Amazon Go came up with their tagline: “No lines. No checkout. No seriously.”
Some dazzled shoppers have described the experience as so seamless it’s like sorcery. And Johl said that’s exactly how next-gen digital immersion should feel: magical!
So what is this visionary wizard — from the world’s most visited online marketplace — doing here in the Philippines?
All eyes on Asia
If we’re talking revenue, China is the clear global leader in e-commerce. According to Statista, 2019 will bag the Asian nation US$723 billion ($1.07 trillion) in sales (the US trailing behind at $365 billion) with a projected growth rate of 10.9% per annum.
But from a regional perspective, its broader Southeast Asia nipping at China’s heels as one of the fastest-growing markets for online retail.
In particular, the Philippines is turning heads given the amount of time Pinoy eyeballs are glued to a screen. A 2019 report from Hootsuite and We Are Social ranked Filipinos in the top spot for time spent online, devoting a total 10 hours and two minutes every day, with more than 40% of that time spent on social media.
Online marketplaces in the Philippines are booming too, with nearly 49 million locals having purchased consumer goods online, and revenues approaching US$1 billion, which is rather extraordinary given one-in-five Filipinos still live below the poverty line.
The most popular e-commerce platform is Lazada, boasting 26 million hits per month, followed by Shopee, with nearly 16 million monthly visitors. The two platforms are backed by Chinese investment titans Alibaba and Tencent respectively, making China’s interest in the Philippines known.
Vic Tria, first vice president of telecommunications and digital services provider PLDT, has been speaking at NRCE for three years now, so he knows how quickly the retail space is evolving. He said that despite the impressive web traffic, 83% of Filipinos are known to search for goods online, only to make their final purchase in-store.
This phenomenon can be partly attributed to the fact that the Philippines is still largely a cash-based society. In its 2017 Financial Inclusion Survey, Bangko Sentral ng Pilipinas disclosed only 23% of adult Filipinos have bank accounts, making it difficult to complete online purchases in the way that much of the western world would take for granted. Thus, cashless and mobile payments are critical to Filipino e-commerce, if the industry is to truly flourish.
GCash and PayMaya are two such solutions allowing people to transact online without a prerequisite bank account. Instead, users load their digital wallet with pesos via a range of retail outlets including 7-Eleven, major department stores and pawnshops nationwide.
Cryptocurrency-backed solutions, such as Coins.ph, allow wallets to be topped up via the cash options mentioned above, as well as with Bitcoin, Ethereum and other crypto deposits, which can be exchanged for pesos and spent online.
Embracing the online-to-offline
During his keynote, Tria proudly referenced the founder of Alibaba, Jack Ma, who famously said: “The future of retail is not just about total domination of e-commerce, rather it is the complete digitisation of all commerce.”
But one of the biggest challenges in digitising everything is maintaining exceptional consumer engagement. Even in the heavily automated realm of online retail, personalised support is still paramount, and despite huge leaps in technological advancements, no robot, chatbot or AI has managed to fully eclipse the human element (yet).
Jesus Vega, technology evangelist and former managing director of the biggest fashion group in the world, Intidex — which owns big-name brands such as Zara — travelled all the way from Spain to speak at the NRCE. Vega said as customers, we are Freddie Mercury: We want it all, we want it now, we are so hot. But as companies, we are suffering because we have to meet the increasingly onerous demands of all our Freddie Mercurys.
As such, hybrid models are emerging so that merchants can achieve efficiency and scalability without sacrificing quality customer service. It’s within this context that the Philippines is gaining incredible momentum — not just as a powerful retail market in itself, but as a valuable resource providing offshore talent to the e-commerce ecosystem.
With such a close affinity with the west (many decades of American colonial rule will do that) and superb English language proficiency, the Philippines is now one of the world’s top destinations for business process outsourcing, especially for customer contact roles. Vital to the emerging economy, the Philippines outsourcing industry employs more than 1.2 million people and contributes over 11% to GDP.
“There’s a reason that one of the Philippines’ biggest exports is their people,” said Lloyd Ernst, chief executive officer at Cloudstaff.
“You only need to spend a few minutes talking with a Filipino on the phone or via live chat and you can feel their bright smile coming through.”
Rosemarie Bosch-Ong, president of the Philippines Retail Association, also knows that strong sense of Filipino hospitality.
In her opening address at NRCE, she observed how she had met Filipino people working in every corner of the world and has always been impressed with their innate sense of customer service and genuine care for people.
“Retail is facing challenges from myriad different directions and it’s up to us to turn these challenges into opportunities,” said Bosch-Ong.
Because ultimately, next-gen global leaders in retail will be those who manage to fully embrace the online-to-offline to seamlessly blend people and technology — just like magic!