New ideas crucial for retail success

Ho Mai Ho, General Manager of the FMCG (fast-moving consumer goods) sector at DKSH Vietnam, said joint research by DKSH and Smollan revealed that while the Vietnamese retail sector had healthy growth, the proliferation of retail channels made end-consumer reach more challenging. 

In an ever-growing market, the retail sector had undergone changes, with a broader array of shopping channels available than just a decade ago, he said.

Retail sales in Vietnam would continue to expand, he noted. 

While traditional trade accounts for about three-fourths of total sales, modern trade channels have been growing in recent years and will continue to expand. 

With the average household size shrinking, consumption demand had changed and families tended to buy less at a time, Ho said, adding that Vietnamese shoppers were increasingly buying from modern trade channels. 

Bjorn Kruizenga, business development manager for Southeast Asia at DKSH Smollan Field Marketing, said that up to 70% of shopper decisions globally were made in-store, and 20% of shoppers made impulse and unplanned purchases. 

For 28% of products, the choice of brand to buy is usually made before reaching the store. In addition, about 25% of consumers notice that the category they impulsively bought was featured in a display. 

Finally, one in 10 shoppers would switch to another brand inside the store, he said.

Maximising the shopping experience in-store was therefore key for a successful retail execution, he added.

Ho said the company’s digital in-store solutions helped maximise the shopping experience and ensure shelf availability to consumer brands by providing them with smart data to track their key performance indicators.

Field marketing in the last “mile” of the value chain had become an integral component for DKSH over the years, because it converted shoppers into buyers and helps drive sales for its clients, he said. 

To increase market share, FMCG brands could choose to launch new products or expand to more outlets or online channels, he said. 

"However, this requires significant R&D and marketing investments, while space on supermarket shelves is often limited." 

"Despite the growing popularity of e-commerce platforms, most FMCG sales are still transacted at physical points-of-sale." 

Thus, it was critical to optimise the supply of existing products in the retail space and maximize the retail availability and visibility at every opportunity, Ho said.

Field marketing teams play a crucial role in being the enabler between FMCG brands and retailers to help both parties drive an optimal end-to-end supply of products to shoppers. 

Ho said that e-commerce in Vietnam, despite accounting for just 0.3% of total retail sales in the country in 2016, would develop strongly in the coming time. 

Enterprises need to invest and conduct research about e-commerce to map out appropriate plans for the future, he said.