Era of Smart Retail  Launch Brand New Shopping Experience

Entering the era of IoE (Internet of Everything), every industry is facing new competitive landscapes.  Below are the future development trends of the retail industry along with the action plans and vision of Far Eastern Department Stores (FEDS).

１、Major Development Trends of the Retail Industry
（1）Launch Transformational Innovation：Innovative transformation and advancement in digital technology have revolutionized the brand new shopping experience in the retail industry.  Through data analysis, mobile commerce and social media community, consumers will enjoy more interesting shopping experiences.  In the era of smart retail, competition is no longer limited to scale, location or market share, but it depends on the capability of managing advanced technologies.

（2）Rapid Changes in Consumer Preferences：With the popularity of internet and smartphone devices, consumer preferences and habits have changed drastically.  Simultaneously, retailers must respond more quickly to provide merchandise and serve our customers diligently.

（3）Personalized Services：Retailers must stay close to their customers by engaging them through various unique experiences.  These will enable the retailers to collect and analyze more personalized data so to provide more targeted services.

（4）Continuous Intensive Market Competition：Under the limited market scale, the existing players continue the store whilst new competitors also enter the market with different business models, all leads to the increasingly fierce competitions in the department stores sector.  We must be fully equipped with the ability to respond, transform, and drive into action quickly.

２、Future Action Plan
Under the smart retail trend, physical store is no longer the major battlefield for the retail industry.  The role of channel will not be limited to purchasing and selling, but to enable customers to gain more impressive, more interesting experiences.  Therefore, we will adopt the following three action plans:

（1）Omni-channel Shopping：First, we must continue to integrate physical and online shopping channels and move toward “omni-channel” strategy.  Before achieving this, we need to comprehend the mindsets of consumers through innovative technological devices (i.e.: providing more convenient WiFi services; establishing iBeacon at FEDS Banqiao Megacity) in order to observe customers’ shopping dynamics, predict their shopping needs, and offer targeted merchandise information, to enhance fun and satisfaction.  In addition, FEDS is connecting physical and online store channels through apps on smartphones to allow customers locate the merchandise quickly, as well as enjoy discount and customer services, thus to embody the new “Seamless Online and Offline Shopping Experience.”

（2）Social Listening：FEDS aims to better understand customer needs by fully utilizing social media portals including Facebook, LINE, etc. to collect and analyze customers’ voice as an important reference for business operations, also to forward feeding messages more speedily through these channels.  For example, during Korean Weeks Exhibition held at Banqiao Megacity, we shared dining style of Korean ice cream on Facebook and gained over 700,000 clicks.  Furthermore, “Raising Shoes to Kenya” held at Hsinchu Store was also broadcasting on internet, and successfully raised 5,000 pairs within 3 days.  In the future, FEDS will continue to leverage social media by searching hot topics and eventually relate the attention to our customers to enhance our store traffic.

（3）Cross e-Management Platform：We will continue to strengthen our management reporting in reaching our targets, such as the “one counter, one cashier”, “paperless environment”, “budget management”, and “efficiency management” to assist business units to improve profitability.  Aside from that, FEDS will continue to utilize smart technology effectively to connect front end and back end operations.  For instance, when the department store floor manager encounters equipment malfunctions, he or she can immediately request for maintenance via tablet, back end operation can be alerted simultaneously to respond.  Additionally, managers can also follow up on the system to improve operational efficiency.

３、Two Major Visions of the Far Eastern Retail Group
（1）Building Smart Shopping Malls：With technological advancements, scenes described in science fiction have become reality.  In April 2015, Banqiao Megacity and Taichung Topcity introduced “3D virtual fitting mirror”, allowing customers to easily try on apparels thanks to the technology of “motion sensing” and “augmented reality”.  You can even make payments simply by clicking on mobile devices.  In the future, how to create personalized shopping experience through digital technology is a vital way to promote retail innovation.  Eventually, execution is the key success factor.  Thus, FEDS is determined to move toward this goal.

（2）Growing as Double E Enterprise：Despite the economic turmoil, FEDS and the Retail Group registered outstanding performance in 2015.  FEDS received total six awards, namely “Industrial Energy Saving”, “Taiwan’s Sustainable Enterprise”, “Common Wealth CSR Award”, “Ranking of Information Disclosure” A++, Next Magazine “Best Service Award”, and “AIT Commercial Award.”  Our subsidiaries also recorded outstanding performances, Amart won “Green Sustainable Store”, “Active Promotion of Energy Saving Products” and “Best Marketing Green Store”; City’super received “Gold Medal of Taiwan’s Service Industry Review”; SOGO Department Store also demonstrated dedication in CSR efforts.  These honors will continue to motivate us..  In the future, FEDS is determined to become a double growth engine enterprise.  The first engine is EPS, through business strategies and management innovation to elevate profits; the other engine is EGS, being committed to CSR to reach sustainable target.  We believe that under the propeller of the double E engines, our stocks will not only be categorized as conventional department store industry, but also as technology stocks among conventional industries.
　　
We welcome you to visit our branch stores, experience our dedication that we arrange in enhancing shopping experience and promoting smart retail, and seek your continuous encouragement and support.  (FEDS President Nancy Hsu’s keynote speech at 2015 Far Eastern Group Annual Meeting.)



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