IDC InfoBrief April 2021 Retail Digital Pulse Asia/Pacific
IDC Doc. #AP241238IB
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This IDC InfoBrief The retail sector has undergone dramatic changes The adoption of use cases and technology shows The current digital pulse of Asian retail analyzes Asia’s in 2020. The shift to digital has accelerated, with marked differences: is low, with only 2% of retailers at Stage retail digital pulse, many organizations speeding up their digital 4 (digitally resilient) and 55% at Stage 1 and identifies the transformation journey. As we move into a post- Use case adoption among retailers shows (digital participant). There is variation use case focus areas COVID-19 operating environment, we have seen that for Stage 1,2 and 3, the focus is on the across markets and segments with, and technology some retail businesses survive and thrive while theme of marketing/customer acquisition. respectively, Australia and pure online adoption of retailers others are still struggling. across the four The orientation towards merchandising, players being the most advanced digitally. different stages of To understand the current state of retail digital logistics, and fulfillment is seen across maturity, with the transformation, Google Cloud commissioned all stages. aim of providing IDC Retail Insights to conduct research into a framework to Asia/Pacific’s retail digital pulse and develop a Stage 4 organizations stand out in their assist retailers in Google Cloud Retail Digital Index. adoption of omni-channel commerce developing their and product lifecycle management (PLM). Specific digital roadmap for IDC analyzed 1,108 retailers across seven use case adoption shows a much greater focus the future. countries (Singapore, Hong Kong, Australia, South on personalization, and product discovery Korea, India, Thailand, and Indonesia) and across and search. eight different segments (online, drugstores, specialty shops, convenience stores, department Technology implementation for Stage stores, restaurants, supermarkets, and 1, 2, and 3 organizations have focused hypermarkets/big box stores), and investigated on the base technologies: security, customer their digital maturity across five dimensions – engagement platforms, collaboration platforms, strategy, people, data, technology, and process – content management applications, and analytics. to arrive at a digital pulse score. In analyzing the factors that were hindering Asia/ The Stage 4 difference is the adoption of Overall, of the five dimensions that make up Pacific retailers’ adoption of digital, having a digital “as-a-service” technologies: Software as a the digital pulse, strategy and process are the transformation roadmap in place surfaced as the Service (SaaS), Infrastructure as a Service highest ranked, with technology at the bottom. top challenge. (IaaS), and Platform as a Service (PaaS).
2 IDC InfoBrief The Digital Pulse of Asian Retail Retail Challenges
Asian Retail Today Retail is one of the sectors most Digitalization Is Key Market Which one best describes where your organization currently is? impacted by the COVID-19 pandemic. to Success For businesses to continue operating, Overall 38.6% 9.3% 52.1% retailers have had to embrace As part of the retail digital pulse research, we also explored the digital to not only satisfy customer Thailand 47.0% 7.5% 45.5% demand, but also support back-office impact of digital technologies over % % % operations. the past year: Indonesia 28.0 6.5 65.5 India 43.0% 2.5% 54.5% Just over half of Asian retailers 8 out of 10 Asia/Pacific retailers % % % are back to growth mode, but said that digitalization was essential South Korea 31.5 18.5 50.0 for success. % % % there is significant variation across Singapore 41.2 10.8 48.0 geographies and segments. They said being digital had Hong Kong 36.9% 12.6% 50.5% In assessing the business confidence assisted in growing revenues or Australia 47.6% 8.7% 43.7% of Asia/Pacific retailers, the results mitigating declines: are mixed: Segment Which one best describes where your organization currently is? • 43% believed it has helped them increase revenues, 31% An average of 52% of retailers Overall 38.6% 9.3% 52.1% said they were returning to growth maintain revenues, and 27% mitigate decline. and planning for the future, Hypermarkets/BB 44.7% 8.2% 47.2% and 39% said they were still in 39.2% 13.3% 47.5% survival mode. • Restaurants saw the greatest Restaurants impact with 72% stating that Convenience 44.3% 8.7% 47.0% Indonesia retailers were the most being digital helped drive up Drugstores 42.7% 9.3% 48.0% optimistic, and Australia the least. revenues. Supermarkets 36.8% 11.3% 51.9%
Across the different segments, % % % Department 35.1 10.1 54.8 online retailers were the most confident, with convenience stores Specialty 39.9% 8.0% 52.1%
the least optimistic. Online 29.3% 6.7% 64.0%
Business Continuity/Economic Recession: As our revenue is Return to Growth/Next Normal: As Slowdown: We are responding expected to be in prolonged our revenue is returning, we are looking to the crisis and focused on business decline, we are focused on building to more aggressively invest/As our business continuity/As our revenue slows down, business resiliency. stabilizes into what is now the new normal, we we are in cost optimization mode. are working to operate as a digital enterprise as we see it vital to the success of our business.
Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
3 IDC InfoBrief The Digital Pulse of Asian Retail The Digital Pulse of Asia/Pacific Retail
The Retail Digital The Opportunity the 4 stages of digital maturity Pulse (RDP) With 79% of organizations The overall digital pulse of Asia/Pacific retailers is low, with slightly over half at Stage 1. The RDP aims to assess how at Stage 1 (digital participant), Asia/Pacific retailers are or Stage 2 (digital explorer), digitalizing, building resiliency, there is the opportunity for organizations to develop and developing competencies Stage 1 Stage 2 to enable them to compete in and implement their digital a post-COVID world. strategy and break away from Digital Participant Digital Explorer their competitors. Lack of an organization-wide Tactical DX and innovation initiatives The RDP assessment gauges innovation and transformation aimed at reactive interventions approach coupled with legacy and through technology, data, processes retailers’ digital maturity in five Digital resiliency implies that an organization has the siloed IT infrastructure, data assets, and people to accomplish short term different areas –strategy , processes, and human resources. business objectives. process, people, technology, foundation of technology and data – across a 4-stage and use cases in place that digital pulse index, with 4 being enables constant innovation the most mature. in all aspects of the business, from store operations % % The overall digital pulse of to customer acquisition, 55 24 retailers is low, with only merchandising, logistics and 2% of retailers that can be fulfillment, omni-channel considered to be at Stage 4, commerce, and PLM. and 55% at Stage 1. Digitally resilient organizations In order to move to Stage are able to respond quickly % 4, retailers need to address to external forces and to continuously innovate, driven 19 all the five dimensions, and Stage 4 Stage 3 advance at a similar cadence. by internal goals. Digitally Resilient Digital Aspirant Organizations at Stage 4 Enterprise wide, dynamic and disruptive Concerted effort in planning and are in the driving seat to approach towards DX and innovation, managing DX initiatives through fast track digital and have supported by executive leadership and well-laid technology infrastructure the potential to disrupt the established processes, and enabled % and data management strategies, market through its ability to through a cloud-first and data-ready processes, and human resources for culture to achieve both short-term and 2 inter-departmental business metrics. introduce innovative new long-term business objectives. business models.
Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
4 IDC InfoBrief The Digital Pulse of Asian Retail About RDP
The Drive for Digital Resilience
As we look toward economic recovery Digital pulse index - Dimensions While the pulse survey reveals that Digital pulse index - Dimensions and the next normal, the key to Overall average overall average is low, organizations success will be digital resilience. that have invested in digital (Stage 4) have moved ahead of their peers and Stage 1 Stage 2 Stage 3 Stage 4 Digital Digital Digital Digitally The IDC-Google Cloud RDP survey set new benchmarks, as shown by the Participant Explorer Aspirant Resilient reveals that the overall average gap between the 2% of organizations scores of Asia/Pacific retailers are low, that are at Stage 4 (digitally resilient), with 55% in Stage 1. versus those that are in Stage 1,2, and 3. Advancing to the next stage will require retailers to take a digital approach Focusing on just one dimension will to the five index dimensions, and Strategy not lead to digital resilience. Progress Strategy implement a plan to progress across all has to be made across all the of these areas. These five dimensions, dimensions to build digital resilience. which all organizations need to have in place to drive digitalization are: There are variations across the five dimensions: Strategy focuses on innovation Process Technology Process Technology strategy, and digital transformation The most advanced dimensions strategy. 1.0 retailers have in place are strategy and process. However, though Technology explores the 2.0 the plans in place, the lowest technology approach for ranking dimension is technology infrastructure and cloud adoption. 3.0 implementation. 4.0 People looks at change Once retailers have progressed management and transformation beyond Stage 1, the process culture. dimension becomes the most People People Data/Intelligence mature, as change management Data/Intelligence Data/intelligence examines the and process efficiencies become management and the use of data. the focus.
Process automation and There is significant variation across change management reviews geographies and segments. the approach to both.
Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
5 IDC InfoBrief The Digital Pulse of Asian Retail The Retail Digital Index
The index was developed by analyzing 1,108 retailers that employ at least 250 employees across the Asia/Pacific region. The respondents are management level, including business owners, CEOs and departmental heads with influence over IT purchasing decisions. They were tested on their progress in digital resilience across five areas: strategy, people, process, technology, and data/intelligence.
Stage 1 Stage 2 Stage 3 Stage 4
Digital Participant Digital Explorer Digital Aspirant Digitally Resilient
No long-term innovation strategy; DX initiatives are tactical, and DX strategy cuts across products, DX strategy is disruptive and Strategy DX initiatives are fragmented focused on immediate customer services and customer experiences dynamic in nature and product gains but is tactical in nature
Limited by change management Ad hoc DX initiatives driven by Culture transformation and Culture transformation driven People challenges & lack of executive cross-functional teams across end-to-end DX program in by executive leadership with support in DX initiatives specific business functions place but has limited budget organization-wide participation in and resources for implementation DX initiatives
Lack of continuous process Process changes are reactive in Focused teams that manage Process transformations are iterative Process improvement initiatives nature and are launched to address continuous process improvement in nature and are embedded in ad-hoc issues and drive business innovations organization’s DNA
Rely on legacy and uncoordinated Cross-channel data sharing Data sharing between multiple Cloud-first strategy with outcomes Technology groups of IT infrastructure with no supported by siloed business ecosystem partners supported by such as hyper personalization or limited focus on leveraging cloud processes and applications cloud enabled analytics frameworks driven by cognitive and contextual and data platforms data inputs
Lack of business data visibility Data analysis done in siloes and Availability of data management Insights generated are holistic in Data/ and taxonomy supports limited process objectives platforms across the organization nature and data monetization is a Intelligence with standard definition sets key aspect of business strategy
Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
6 IDC InfoBrief The Digital Pulse of Asian Retail Findings Diving Deeper: Market Digital Pulse
The scores represented here are the average Digital pulse index - maturity stages by market for each market. Within each market, there are retailers that are more digitally advanced and those that are less so. Stage 1 Stage 2 Stage 3 Stage 4
Examining the maturity of retailers by geography, the developed economies are the most mature. Singapore Hong Kong However, they are still, on average, at Stage 2. Australia Singapore is the most mature, edging close to South Korea Stage 3.
In the developing/emerging economies, all are digital participants, which is Stage 1 of the digital India pulse, with India being the most mature, followed Thailand
by Thailand, and then Indonesia. Digital transformation dimension Indonesia
Exploring the scores by dimension: All retailers N = 1,108
Singapore, South Korea, and India are the most mature in the strategy index score. Digital pulse index dimension by market Hong Kong, Australia, and Indonesia are the most mature in the process index score (note that the South Korea score is equally high). Strategy
Thailand is the most mature in the people Technology score. People All markets have the opportunity to improve their score and advance in their digital pulse. Data/Intelligence However, all dimensions have to be developed concurrently in order to progress in the Process digital journey.
The Market Highlights section will explore Indonesia Thailand India South Korea Australia Hong Kong Singapore further the opportunities and challenges for each geography.
Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
7 IDC InfoBrief The Digital Pulse of Asian Retail Diving Deeper: Segment Digital Pulse
The index shown here represents the average Digital pulse index - maturity stages by segment scores by segment. Within each segment, there are those that are more digitally mature, and those that are less so. Stage 1 Stage 2 Stage 3 Stage 4
There is a big difference across the digital maturity of the different segments.O nline pure play leads in digital maturity, followed by department stores, with supermarkets and specialty stores all at Stage 2 - digital explorer.
At Stage 1 - digital participant - we have Online pure plays Convenience Stores convenience stores, hypermarkets/big boxes, Department stores restaurants/food services and drugstores. Restaurants/ Supermarkets Food services
Digital transformation dimension Specialty stores Drugstores All segments have seen a shift to digital over Hypermarkets/Big Box the last year to enable retailers to continue All retailers N = 1,108 to operate. However, while some accelerated their digital transformation, with the roadmap and foundational technology already in place, Digital pulse index - maturity stages by segment others had to start from scratch and develop roadmaps in conjunction with implementing the base levels of technology, while ensuring Strategy the business could still run. Technology Exploring the scores by dimensions: People Online pure plays lead in all the five dimensions. Data/Intelligence Strategy and process are the most mature in all segments except for convenience stores and hypermarkets/big boxes where technology is the Process most mature dimension.
Drugstores Restaurants/ Convenience Hypermarkets/ Specialty Supermarkets Department Online Food services stores Big box stores stores pure plays
Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
8 IDC InfoBrief The Digital Pulse of Asian Retail The Journey to Stage 4 Digital Resilience Use Cases Adoption
The journey to digital resilience Stage 4: Digitally Resilient. Characteristics of Stage 4 Retailers is not a simple one. It consists The most mature use of a number of use cases that cases are being deployed Stage 4 retailers pivot towards more advanced use cases that are focused on: when integrated, and with the by those retailers in Stage right underlying technology, 4. The focus is on omni- Personalization and Product discovery Social listening provide a digital framework channel commerce, and recommendations and search Monitoring social channels using data to make improved PLM. This continues from Improving the overall Improving the shopping for comments about business decisions. building on past use cases customer experience by experience by supporting your brand, competitors, treating every customer the discovery of products products, etc. in the preceding stages and as an individual. and associated merchandise Based on the analysis, we see enables the digitalization of through search terms, text, three clear stages of use case the most complex processes voice and visual, and item theme adoption. supporting an improved associations. customer experience, and Stage 1: Digital Participant. optimized processes. This is the “starting” phase Top 5 use cases by dpi stage on the roadmap to digital Across all the stages, there Stage 1 Stage 2 Stage 3 Stage 4 resilience. It is predominantly is a focus on store operations Use Case Average Digital Participant Digital Explorer Digital Aspirant Digitally Resilient focused on the optimization (not applicable for pure of current processes, online players) and the other Marketing optimization #1 #2 #4 #1 with an additional focus enabling technologies (back- on marketing/customer end process, e.g., finance Customer data platform (CDP) #2 #3 #1 #4 #5 acquisition use cases. and HR). Loyalty program/ #3 #1 #2 customer relationship management Stage 2-3: Digital Explorer/ Personalization #4 #5 #5 #4 Aspirant. As digital adoption matures, the focus shifts Inventory optimization #5 #5 to merchandising, and Demand planning, allocations, assortments logistics and fulfillment. #6 #4 #3 Typically, the use cases here Product discovery & search #8 #2 are developed from those in
Stage 1, taking the data and Personalized recommendations #14 #3 output and building on that Optimizing sourcing #15 #3 with other use cases to enable and optimize more complex Pricing/Promotion/Markdown optimization #16 #2 parts of the business. Social listening #17 #1
Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
9 IDC InfoBrief The Digital Pulse of Asian Retail The Journey to Stage 4 Digital Resilience Technology Adoption
Technology adoption across and only 2% of organizations Key technology adoption by maturity stage the different stages shows are at Stage 4. a distinct variation between Stage 1 Stage 2 Stage 3 Stage 4 Technology Average those retailers in Stage 4 and The “as-a-service” model Digital Participant Digital Explorer Digital Aspirant Digitally Resilient those in Stage 1,2, and 3. departs substantially from the traditional approach of on-site Stage 4 retailers have a key IT and requires a different Security technologies #1 #1 #1 #1 focus on “as-a-service” mindset and approach technologies, with Software to managing technology. as a Service (SaaS) ranked However, it is clear that this Customer engagement applications number 1 and Infrastructure is a distinct differentiator #2 #3 #2 #4 #4 as a Service (IaaS) ranked in facilitating the journey to number 2. digital resilience. Collaboration platforms #3 #4 #4 #2 #5 In comparison, those When provisioning to lay organizations at the other the foundation for digital three stages emphasized transformation and enabling security and customer the digital journey, the Content management applications #4 #5 #3 #3 #3 engagement applications. “base” digital technologies are security, customer The gap between those at the engagement platforms, Analytics software #5 #2 #5 lower 3 stages and those at collaboration platforms, Stage 4 is huge, as uncovered content management, by the digital pulse findings, and analytics. Software as a Service (SaaS) #5 #1
Infrastructure as a Service (IaaS) #2
Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
10 IDC InfoBrief The Digital Pulse of Asian Retail Overcoming the Challenges
The challenges to digital Organizational issues such transformation are as digital mindset, budget, Top 5 challenges for organizations enormous. Asia/Pacific and senior leadership retailers cited a number of commitment are all challenges Lack of a Lack of the Lack of a digital Lack of Digital challenges, with the lack of a highlighted, but there are proper digital necessary mindset/ budget/ transformation transformation roadmap regional differences. transformation technologies to cultural commitment is not well topping the list. roadmap enable digital challenges from understood at It is interesting to note that transformation management senior levels The key priority for retailers while Singapore is the highest is really to develop a plan ranked country, the shortage of how to get from A to of digital skills was brought up B, detailing the use cases as a challenge, underscoring Top 3 challenges and technology required to the competitiveness of the implement those use cases, market in finding talent, as challenges Total Australia Hong Kong India Singapore South Korea Indonesia Thailand and enabling the use cases to well as the need to deploy build upon each other. the latest technology. Lack of a proper digital transformation roadmap #1 #3 #2 #2 #1 #2 #1 #3 The difficulty of having the right technologies in place Retailers across Lack of necessary technologies #2 was highlighted in the digital all markets cite to enable digital transformation #1 #2 #1 pulse as it was the lowest lack of a digital Lack of digital mindset/ scoring dimension. It is cultural challenges #3 #1 #3 #3 essential to think about what transformation Lack of budget/commitment the technology architecture is #1 #2 going to be. roadmap as a from management top 3 challenge. Digital transformation is not The results have shown understood at senior levels #2 #1 #3 that those at Stage 4 have a Developing Shortage of digital skills greater focus on “as-a-service” markets cite lack of and talent #3 #2 technologies, so questions technology more as to whether this should be Lack of operational and #3 #3 embraced at an early stage than developed customer data of the roadmap or deployed markets. The ROI for digital at a later stage need to be transformation is not clear #3 considered.
Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
11 IDC InfoBrief The Digital Pulse of Asian Retail Essential Guidance Essential Guidance The opportunity is out there for retail organizations to accelerate their digital The value of digital is Currently, the digital The use case map In creating the Consider your adoption, but speed is critical in a clear and has been pulse of the majority shown on the next roadmap, seek out underlying technology reinforced by this of retailers is low, page can be used as a technology partners infrastructure. Stage dynamic and increasingly uncertain research; the challenge but we expect this to starting point. Think who can help you on 4 digitally resilient environment. COVID-19 underlines is how to get there. The increase rapidly over about what you already your journey, and organizations stand key is to understand the next few months. have in place; what are explore with them your out in their adoption of the fact that black swan events can your digital pulse To move forward, it your priorities for vision – most vendors “as-a-service models. throw the best-laid plans into disarray in and then plan your is critical to develop a the future? now have some form innovation agenda digital transformation of design thinking, a flash, but being to become a digitally roadmap. This must ideation, and/or digitally resilient resilient retailer. include having a innovation program to future vision of assist you in developing will go a long your organization that future vision. way in ensuring and getting it communicated across business survival the business. and success.
A Guide for the Future EMBRACE digital.
DEVELOP a clear roadmap adopting use cases and technologies identified in this research as a starting point.
PLAN - leverage the use case map to help you plan and focus on the key areas as you embark and/or progress in your digital transformation journey.
ADOPT as-a-service technologies as a key differentiator.
PARTNER - seek out technology partners who can help you on your journey, and explore with them your vision.
12 IDC InfoBrief The Digital Pulse of Asian Retail Essential Guidance Digital Transformation Use Cases Guide The table below serves as a guide to the key areas and themes to focus on from Stage 1 to 4 in terms of use cases to help you plan your journey to digital resilience.
Maturity
Store operations
Other enabling technologies Theme Marketing/Customer Acquisition
Merchandising
Logistics & Fulfillment
Omni-channel Commerce
Product Lifecycle Management
Workforce Omni-channel Pick/Pack & Loyalty program Corporate Customer Virtual Social Route Frictionless Omni-fulfillment productivity/ fulfillment task optimization /CRM functions care chatbots try on listening optimization check-out optimization Labor promise management
Sustainability – Warehousing Optimized Digitally Use case Marketing Personalized Inventory Optimizing Last mile Shelf smart buildings, Product discovery operations returns empowered optimization recommendations optimization sourcing fulfillment checking packaging, CO2 & search optimization experience store associates footprint
Pricing/ Demand planning, Customer data Shrinkage Vendor Conversational Trends Promotion/ Real Personalization Fraud Design allocations, platform reduction management commerce analysis Markdown estate detection to value assortments optimization
Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
13 IDC InfoBrief The Digital Pulse of Asian Retail SurveySampleNew
Survey Demographics How IDC Retail Insights Arrived at the RDP The RDP was developed based on the sample population below.
Retail Type Description Example Respondents Company size
Online pure plays (100% online sales) Amazon, Flipkart, eBay, Tokopedia, Lazada, Qoo10, Rakuten, Shopee, etc. 1,108 >250 employees Specialty stores Retailers who specialize in one or a few distinctive Harvey Norman, IKEA, Popular, in 7 markets: categories of products such as electronics, furniture, Power Buy, Kyobo, etc. • Australia stationery, apparel, sporting goods, etc. Industries • Hong Kong Department stores Large format retailers featuring wide range of products, Mustafa, Shoppers Stop, Lotte • India • Online pure plays both private labels and national brands. Department Store, Central, Target, • Indonesia Shinsegae, etc. • Specialty stores • South Korea • Department Supermarkets (Grocery) Large format retailers predominantly selling groceries. Woolworths, NTUC FairPrice, • Singapore stores Cold Storage. • Thailand • Supermarkets (grocery) Drugstores Carrying medication, health, and beauty/cosmetics Apollo Pharmacy, Olive Young, Priceline, IT influence • Drugstores products. Watsons, Guardian, etc. • Convenience Convenience stores Smaller format retailers often with high turnover of goods. 7-Eleven, Spar, FamilyMart, Alfamart, Decision makers stores Koryo Mart, etc. of their company’s • Restaurants/ IT purchases Food services Restaurants/Food services KFC, McDonald’s, Home Original • Hypermarkets/ Chicken, J.CO, Starbucks, Café Coffee Big box Day, etc. role
Hypermarkets/Big box Large format retailers carrying all types of products. Walmart, Tesco, Giant, Carrefour, Manager-level Homeplus, etc. and above, such as business owners, CEOs, directors, and heads of departments
Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
14 IDC InfoBrief The Digital Pulse of Asian Retail Market highlights Singapore Singapore leads the pack in maturity, with strategy at Stage 3, and the other dimensions, whilst at Stage 2, coming close to Stage 3. Despite leading the pack, challenges remain around managing the roadmap, making the change happen, and having the right digital skills. The shift to Stage 3 requires improvement in the technology dimension. Mapping digital skills to technology requirements will be crucial for progression as shortage of digital skills may hinder the journey, and the decision on what skills to develop in house will be key.
Digital Pulse Index Top five drivers to digitalize Top five use cases
Stage 1 Stage 2 Stage 3 Stage 4 Improve CX to drive revenue/KPI Inventory optimization 51.0% Digital Participant Digital Explorer Digital Aspirant Digitally Resilient
Overall Optimize core activities/processes Customer data platform 50.0%
Singapore Improve customer reach and convenience Loyalty program/CRM 49.0%
Digital Pulse Index Demand planning, % Expand B2B sales by becoming a tech company allocations, assortments 49.0 Overall
Singapore Simplify/modernize IT Vendor management 46.1% Strategy
Top five challenges to digitalization Top five technologies adopted
Customer engagement Lack proper DX roadmap 49.0% applications Process Technology Digital skills/talent shortage Security technologies 45.1%
% Lack digital mindset/cultural challenges Collaboration platforms 36.3
Content management Lack necessary technologies 36.3% applications
Lack budget/management commitment Software as a Service (SaaS) 36.3% Data/Intelligence People Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
15 IDC InfoBrief The Digital Pulse of Asian Retail Market Highlights Hong Kong Hong Kong ranks second in the DPI and is above the average across all the DPI dimensions. It leads in process for the region, and is weakest in people, which is amplified in the challenges faced when transforming. In order to move to Stage 3, Hong Kong retailers need to focus on the technology and people dimensions. The two dimensions are closely connected - introducing new technology such as automation will improve the operating environment of the employees, thus helping to address people issues.
Digital Pulse Index Top five drivers to digitalize Top five use cases
Stage 1 Stage 2 Stage 3 Stage 4 Improve CX to drive revenue/KPI Personalization 37.9% Digital Participant Digital Explorer Digital Aspirant Digitally Resilient
Overall Improve customer reach and convenience Marketing optimization 37.9% Hong Kong Expand B2B sales by becoming a tech company Product discovery & search 34.0%
Digital Pulse Index Optimize core activities/processes Customer data platform 33.0% Overall Hong Kong Adopt a new business or revenue model Loyalty program/CRM 32.0% Strategy
Top five challenges to digitalization Top five technologies adopted
Lack digital mindset/cultural challenges Security technologies 55.3%
Process Technology Lack proper DX roadmap Collaboration platforms 41.7%
Customer engagement % Digital skills/talent shortage applications 39.8
Content management % Lack operational/customer data applications 35.9
% Lack budget/management commitment Analytics software 32.0 Data/Intelligence People Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
16 IDC InfoBrief The Digital Pulse of Asian Retail Market Highlights Australia Australia ranks third in the DPI, with process being in Stage 3, and the other dimensions all in Stage 2. Australia is the most cost conscious of all the countries, with drivers and challenges all related to cost savings. Australian retailers were the most pessimistic in business sentiment, and the market shows a split between those that have embraced digital and are thriving, and those that have not and struggling. For those that are floundering, commitment to a digital strategy, and putting the necessary investment into accelerating the journey to digital resilience, will be key. For those that have already embraced digital, the opportunity to extend into the more advanced use cases, and build on the digital foundation, will enable further differentiation.
Digital Pulse Index Top five drivers to digitalize Top five use cases
Stage 1 Stage 2 Stage 3 Stage 4 Reduce costs Customer data platform 43.7% Digital Participant Digital Explorer Digital Aspirant Digitally Resilient
Overall Improve CX to drive revenue/KPI Marketing optimization 40.8%
Australia Improve customer reach and convenience Personalization 39.8%
Digital Pulse Index Expand B2B sales by becoming a tech company Loyalty program/CRM 39.8% Overall
Australia Simplify/modernize IT Product discovery & search 39.8% Strategy
Top five challenges to digitalization Top five technologies adopted
Lack budget/management commitment Security technologies 50.5% Process Technology Management doesn’t understand DX Collaboration platforms 46.6%
Customer engagement % Lack proper DX roadmap applications 40.8
Content management % Lack operational/customer data applications 35.9
Lack digital mindset/cultural challenges Software as a Service (SaaS) 35.9% Data/Intelligence People Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
17 IDC InfoBrief The Digital Pulse of Asian Retail Market Highlights South Korea South Korea ranks fourth in the DPI, with all dimensions in Stage 2. it is most mature in strategy and process, but all the dimensions are very close in maturity. The drivers to change focus on increasing revenue, and challenges relate to technology and having a roadmap in place. Retailers in South Korea are on the journey to Stage 3 maturity with businesses focusing on optimization of core activities and rethinking their current business model. Matching technology skill requirements to the roadmap will be key to enable the move to Stage 3.
Digital Pulse Index Top five drivers to digitalize Top five use cases
Stage 1 Stage 2 Stage 3 Stage 4 Expand B2B sales by becoming a tech company Marketing optimization 36.0% Digital Participant Digital Explorer Digital Aspirant Digitally Resilient
Overall Optimize core activities/processes Inventory optimization 35.5%
South Korea Improve CX to drive revenue/KPI Customer data platform 34.0%
Digital Pulse Index Improve customer reach and convenience Loyalty program/CRM 31.5%
Overall South Korea Reduce costs Vendor management 31.0% Strategy
Top five challenges to digitalization Top five technologies adopted
Security technologies Lack necessary technologies 33.5%
Process Technology Content management % Lack proper DX roadmap applications 28.0
Management doesn’t understand DX Analytics software 27.0%
Lack digital mindset/cultural challenges Software as a Service (SaaS) 27.0%
Lack operational/customer data Collaboration platforms 26.0% Data/Intelligence People Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
18 IDC InfoBrief The Digital Pulse of Asian Retail Market Highlights India India ranks fifth overall in the DPI and leads the group of developing countries. It is most mature in strategy, and least mature in data/intelligence. The challenges for going digital are from the leadership, as well as the lack of a roadmap and clarity over ROI. Understanding what is a digitally resilient retailer is key for Indian retailers. Improving customer experience is underway and will assist in improving the data dimension on their journey to becoming a digitally resilient retailer. Beyond the customer focus, emphasis should also be placed on improving operational processes such as vendor management, demand planning, and warehouse operations.
Digital Pulse Index Top five drivers to digitalize Top five use cases
Stage 1 Stage 2 Stage 3 Stage 4 Improve CX to drive revenue/KPI Loyalty program/CRM 60.0% Digital Participant Digital Explorer Digital Aspirant Digitally Resilient
Overall Expand B2B sales by becoming a tech company Personalization 54.5% India Simplify/modernize IT Vendor management 54.5%
Digital Pulse Index Demand planning, allocations, % Optimize core activities/processes assortments 53.5 Overall
INdia Warehousing operations % Adopt a new business or revenue model optimization 51.0 Strategy
Top five challenges to digitalization Top five technologies adopted
Security technologies % Management doesn’t understand DX 16.5
Process Technology Content management 15.0% Lack proper DX roadmap applications
Customer engagement % No clear ROI for DX applications 14.5
Lack necessary technologies Collaboration platforms 14.5%
Digital skills/talent shortage Analytics software 14.5% Data/Intelligence People Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
19 IDC InfoBrief The Digital Pulse of Asian Retail Market Highlights Thailand Thailand ranks sixth in the DPI Index. It is most mature in the people dimension, and least mature in technology. The drivers and challenges focus on technologies – the need to modernize IT, and overcoming the lack of technology. The Thai retail sector has a workforce that is adaptable to change and retailers can capitalize on this on their journey to digital resilience. As a foundation of their digital transformation, retailers need to be clear about what is required to become a digitally resilient retailer, and must modernize the current IT infrastructure to ensure progress in their journey.
Digital Pulse Index Top five drivers to digitalize Top five use cases
Stage 1 Stage 2 Stage 3 Stage 4 Simplify/modernize IT Customer data platform 50.5% Digital Participant Digital Explorer Digital Aspirant Digitally Resilient
Overall Expand B2B sales by becoming a tech company Marketing optimization 49.5% Thailand Improve customer reach and convenience Personalization 47.0%
Digital Pulse Index Improve CX to drive revenue/KPI Product discovery & search 47.0%
Overall Thailand Optimize core activities/processes Loyalty program/CRM 44.5% Strategy
Top five challenges to digitalization Top five technologies adopted
Lack necessary technologies Security technologies 17.0%
Process Technology Content management % Lack budget/management commitment applications 15.0
Lack proper DX roadmap Collaboration platforms 12.5%
Customer engagement % Lack digital mindset/cultural challenges applications 11.5
Management doesn’t understand DX Analytics software 8.5% Data/Intelligence People Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
20 IDC InfoBrief The Digital Pulse of Asian Retail Market Highlights Indonesia Indonesia ranks seventh in the DPI index. The most mature is process, with strategy and technology the least mature. The focus is on reaching customers, and improving the experience; however, the challenges are on having a roadmap in place, and the right technologies and mindset. Fundamental to Indonesian retailers’ ability to move forward is understanding what is a digitally resilient retailer, and developing a roadmap to get there. Coupled with this is the need to put in place the right foundational technologies and to start implementing a process for acquiring the appropriate skills.
Digital Pulse Index Top five drivers to digitalize Top five use cases
Stage 1 Stage 2 Stage 3 Stage 4 Improve customer reach and convenience Marketing optimization 59.5% Digital Participant Digital Explorer Digital Aspirant Digitally Resilient
Overall Improve CX to drive revenue/KPI Customer data platform 56.5% Indonesia Demand planning, allocations, Expand B2B sales by becoming a tech company 55.0% assortments Digital Pulse Index Simplify/modernize IT Loyalty program/CRM 54.0% Overall
Indonesia Optimize core activities/processes Personalization 52.5% Strategy
Top five challenges to digitalization Top five technologies adopted
Lack proper DX roadmap Security technologies 15.5% Process Technology Customer engagement Lack necessary technologies % applications 14.0
Lack digital mindset/cultural challenges Analytics software 13.5%
Content management % Digital skills/talent shortage applications 12.0
Lack budget/management commitment Collaboration platforms 9.5% Data/Intelligence People Source: IDC-Google Cloud Asia/Pacific Retail Digital Pulse Survey 2021, AP n = 1,108
21 IDC InfoBrief The Digital Pulse of Asian Retail NewSponsorMessage
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22 IDC InfoBrief The Digital Pulse of Asian Retail About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business IDC Asia/Pacific executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 80 Anson Road 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 #38-00 Fuji Xerox Towers countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. Singapore 079907 IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company. T 65.6226.0330
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IDC Doc. #AP241238IB 23 IDC InfoBrief The Digital Pulse of Asian Retail