Change creates new business opportunities and creates a new profit-making model

        Since the spring of 2020, novel coronavirus pneumonia has been raging, the global supply chain has been hit severely. The industrial report of KPMG released globally in March “The impact of novel coronavirus pneumonia on retail industry - how to overcome challenges and seize new opportunities” (Responding to crises and changing consumer behavior) directly pointed out that the epidemic has different impact on the different kinds of retail industry. In an exclusive interview with Economy Daily, Pacific SOGO Department Store Chairman Sophia C.W. Huang said recently that the traditional department store retail service industry should grasp the opportunity to make positive change, so as to transform magnificently and set a new peak.

        

        The globalization of epidemic has an impact on the global department store retail industry, but "crisis is a turning point", for the past successful real department store operators, it is inevitable that there will be transformation. From now on, physical retail will accelerate to transform to experiencing retail, and more thematic experience, digital technology experience, classic pilgrimage experience will appear in the department stores to meet the growing social needs of consumers. In the future, apart from the functions of commodities, "story" and "sociality" are the two biggest selling points; e-commerce will become the second foot of the operation of physical stores, driving the seamless integration of virtual and real goods into a new retail mode.

        

        Experiential retail x digital integration, positive changes create business opportunities

        

        Affected by the epidemic, whether due to active or passive factors, many people avoid going out too much, and the flow of people in department stores is significantly reduced, which is the best time for effective modification. In addition to surprise the customers, the alternation of the brands and the new environment built can accelerate the transformation to experiencing retail, which is of the utmost importance.

        

        Taking the 11th floor of the SOGO Taipei Zhongxiaoguan as an example, the first "KANAZAWA kaiten sushi" in Taiwan will soon settle in SOGO. This is the decision made by the business team after checking the brands and categories of food and beverage in the store, hoping that the physical store can be transformed into an experiential field. In Japan, there is a legend of "East Sapporo, West Kanazawa" in kaiten sushi. This time, Kanazawa's local popular kaiten sushi store will come, customers can gather around the bar and enjoy the progress of listed sushi, but also carry the expectation and novelty, creating another kind of experience of "food performance".

        

        In addition, the epidemic also has a qualitative change in the life style of consumers. The shopping and leisure habits originally belonging to the entity channel have been transferred to the website, whether e-commerce, food delivery or OTT (Over-The-Top) has become an alternative choice for consumers. The department store industry must make good use of digital tools to sell goods, so that e-commerce will become the second foot of the department store; at the same time, we should closely observe whether the consumption habits of the people have changed after the epidemic.

        

        E-commerce becomes the second foot of the physical channels, innovating profit model

        

        At present, no experts and scholars can say when the flow of people will return to the physical channel; the physical industry must speed up the digital transformation in order to grasp the opportunity in this wave. SOGO “iStore” online shopping launched by SOGO Department Store in 2017 is an extended service that allows customers to buy goods after the store is shut down and also meets the needs of consumers who are unable to shop in person. In terms of sales, SOGO's e-commerce performance in the first two months of this year increased by 2.8 times, of which beauty products were the most eye-catching, with a growth rate of 26 times, and general products also doubled. At present, the SOGO e-commerce customers are mostly the original customers, but there are also many customers from other counties and cities who are inconvenient to come to the store for consumption due to geographical relations enjoy services through SOGO e-commerce.

        

        Compared with pure e-commerce, SOGO's e-commerce does not win by price, but aims to expand the sales field and attract new customers, which is quite different from the nature of pure e-commerce that focuses on investment promotion and low price. SOGO Department store, under the deep foundation of the physical stores, must extend the original service of the physical store, and put the considerate "service power" and the new and diversified "commodity power" in the convenience of online shopping. In short, the value of e-commerce operated by physical channels is to make it more convenient for customers, and the combination with "online shopping and pick up in the store" can make the service more direct.

        

        For example, the main customer of a beauty brand must be clear about what she wants to buy. Through the service of online shopping and pick up in the store, the counter assistants can discover or create new demand when the customer picks up the goods, and then recommend other goods to stimulate more sales momentum. In addition, some high-priced products need to be stored in strict conditions. The department store has a good environment for preservation. Consumers are more secure when they purchase through department stores or online shopping and pick up in the store mode. Moreover, many seasonal and even limited edition boutiques are hard to buy on the e-commerce platform, and for high priced goods, consumers always hope to experience and confirm the quality in the counter before purchase, which are the irreplaceable advantages of physical department store "online shopping and pick up in the store ".

        

        Taking String Orchestra as an example, in the past, the entity store can be seen as the first violinist, the main soul of the orchestra. The role of e-commerce was similar to that of Viola, and the sense of existence was not strong. For SOGO Department store, in the past, e-commerce accounted for less than 5% of the overall performance, but from now on, e-commerce will be regarded as the second violinist, both the entity store and e-commerce will be the protagonists, and the integration of the two will be a new form of smart retail ecosystem.

        

        Strategic echelon of diversity of talents in agile organization

        

        In response to the emergence of a new type of smart retail ecosystem, e-commerce is bound to play a more important role in the business team in the organizational structure of physical department stores in the future. Therefore, the demand for talents in content design, technology application, content marketing and data analysis will increase greatly. SOGO Department Store's sales promotion department must have digital thinking. The future marketing planning will not only be the role of department store business assistant, but also the profit center of the business.

        

        Focus on both the safety of customers / staff and transformation during the epidemic.

        In addition to seizing the opportunity and actively transforming, the safety of employees and customers is the "first priority".

        

        From SARS 17 years ago to food safety storm in 2014, SOGO Department store takes "safety" as the core and deploys protection plan ahead of time. This time, there is no exception in the face of the COVID-19! At the moment of the first confirmed case in Taiwan, SOGO Department store set up an epidemic prevention command center and launched the program of epidemic prevention, which includes: health and safety maintenance of working environment and business area, innovation and service upgrading, sales of epidemic prevention commodities, personnel education and propaganda, health and epidemic prevention activities, beauty care in epidemic prevention, etc., and strictly abided by the rules that "no matter how the epidemic develops, department stores must protect customers and employees.

        

        Department store is a warm industry, if it is not people-oriented, it can’t be operated. Although the epidemic has had an impact on the retail service industry of department stores, compared with the period of SARS, there are still e-commerce and experiential retail in the current industry as transformation. Only when the people regain their confidence in consumption, the momentum of domestic demand will rebound strongly, and SOGO Department store will meet the arrival of "post COVID-19" era together with the public. We are ready!