Siam Piwat accepts pandemic challenge
Retailer adopts new strategy focused on digital culture, convenience and health, aiming for emotional engagement with customers
With the pandemic blowing away almost all businesses across the world including the domestic retail market, Chadatip Chutrakul, chief executive of Siam Piwat, the operator of Siam Paragon, Siam Center, Siam Discovery and Iconsiam, thoroughly expects nothing to be the same in Thailand's 3.6 trillion baht retail landscape because consumer behaviour has completely changed.
"The pandemic has reset everything and completely changed the consumer mindset. After the outbreak, consumers will spend their lives in great caution. Health is the new wealth, kindness is the new cool. They will make their decisions based on feelings and be considerate and sympathetic," she said.
"Digital culture will take a greater part in a customer's life and speed and convenience will be king. With the change in consumer behaviour, Thailand's retail landscape will be reshaped. This is an opportunity for non-disruptive creation."
According to Mrs Chadatip, retailers should approach a new retail business model that shares value across all communities and participants. Retail projects that will be successful are not only beautiful brick and mortar buildings but also total retail chains from product owners, manufacturers, logistic services to the retail platform.
Most businesses are affected by the deadly virus, she said. Companies have less money to try different strategies. This could create a new business model that does not disrupt existing businesses and builds new market cycles and new customers.
In addition, retailers have to develop seamless distribution channel integration from multichannel to omni-channel in order to draw customers' attention and finally attract customers to stores.
"We are developing a virtual store to sell products to customers outside of Thailand. This is a new cake and a new income source. To do this, we have to build our property branding to earn confidence and loyalty from customers," said Mrs Chadatip.
She said the group has a three-pronged approach following the pandemic: non-disruptive creation, seamlessly integrated channel and brand building.
Siam Piwat Group will apply another three strategies for business sustainability. They are market creation strategy, unprecedented value innovation and brand new opportunity.
"Emotional engagement will be the highlight of our marketing strategy. We have to be innovative to differentiate ourselves. Our retail complexes will no longer sell products but sell value. Customers who come to our stores may not buy products but they will come for updates on technology, looking for a new trend or do a workshop with gurus. These will attract customers to stores by their interests. This is the way to engage with customers and build long term relationships with them," Mrs Chadatip said.
While the trading situation has improved gradually after the lockdown measures have been relaxed, the company believes that retail businesses will remain in a contraction this year and is expected to take about 12-18 months to be back to normal.
"As we are Thai company, we are still confident in the country and expect to start investing again next year. We are renovating our 14-year-old Siam Paragon shopping complex for a new look and we will start the expansion of Siam Premium Outlet in the second phase. Siam Paragon will come up with the new business model. It will no longer be a shopping complex," she said.
Siam Paragon's new concept will be formed under a collaboration scheme to generate shared value. In addition to the collaboration, the company will put more focus on cash management.
"Speed is also king. We may not be as impacted as earlier expected because we already began transforming our organisation in the middle of last year. We have miraculous teamwork. Our staff have multiple skills," she said.
"Automation has replaced manpower job in some areas. These make our work process more productive and decisions will be made faster. In the end, we will overcome the crisis."