SURVIVAL OF DEPARTMENT STORE

Arum Rahmasari, Nur Rahmah S.R., Rizky Gilang Kuniawan

Recently in Indonesia department stores’ sales have been dropping significantly. There has been also
shown a competition between online against offline shop where consumers tend to shift to online
shop (detikFinance, 2017). Therefore the main purpose of this writing is to generate alternative
solutions to this problem based on the underlying causes. Below are the supporting data and facts:
 Within 10 years, the number of e-commerce in Indonesia increased by about 17% (BPS,
2016).
 In 2017, many department stores in Indonesia decided to close several or almost all their
stores, such as Debenhams, Lotus and Ramayana (Liputan6, 2017).
We assume that the scope for this issue is department store for upper middle class. Based on
Klynveld Peat Marwirck Goelder (KPMG) ‘s survey on 2017 from 18430 consumers globally, time
flexibility is the main reason (58%) that motivated customers to buy online and time saving reason is
on fourth level (40%) from other 12 reasons. Forrester Consulting group also said that almost 600
decision maker thought reducing time and enhancing shopping experience are factors that needed to
be improved by department store. Therefore our strategy focus on the issue of the business process
through technology development. Below is the strategy that we offer:
1. Omnichannel to increase customer time flexibility as it will allow customer to interact with
physical and digital. Omnichannel can be accessed through web or application. Through
omnichannel customers are able to choose products while checking their availability quantity
and location at any time, then they are able to book the product and make their decision of
purchasing online or at the designated store; as this is what keeps the offline element of
department store so that they could still try the products.
2. Portable Barcode Scanner to reduce customer queue time for purchasing and trying sizes.
This portable barcode scanner is carried by each salesman to make transactions and inventory
checking. Therefore customers do not need to queue to make purchases and wait for
uncertain stock of size or color of a product. Customers are also able to choose whether their
purchase is going to be shipped directly to certain address or carry it by themselves.
3. iPad Catalogue to combine the high-touch benefits of brick-and-mortar with the high-tech
features of online shopping. Through iPad catalogue customers should scan the products that
they feel interested in, then they should choose the person model they want the products to be
tried on (it could be similar to the customers) with parameter like height, size, skin tone, etc.
This iPad Catalogue will show alternative complementary products for a set of clothing
(shoes, bag, top, skirt, etc) and salesman will bring the products if the customers would like
to try them. Therefore this will also increase customer time saving.

With that being said, applying omnichannel, portable barcode scanner and ipad catalogue to increase
customer time flexibility and reduce customer shopping time could increase department store’s sales
in Indonesia as they are one of the main factors people moving from offline to online store. Still
allowing customers to see/touch item first and try the item on will also increase department store’s
sales in Indonesia since they are the main reasons consumers shop in stores instead of online (56%
and 55%) based on Klynveld Peat Marwirck Goelder (KPMG) ‘s survey on 2017. Moreover,
promotions could be resulted through mouth-to-mouth or online review when customers feel pleased
by the technology and services offered.

In the presence, omnichannel has been used by several department stores, such as sogo on MAP e-
mall website as well as matahari on Matahari website. However this strategy is not much adopted by
other department stores in Indonesia. To this extent we could see that this strategy has not been
adopted mainly because lack of encouragement to make a change. As for the wireless barcode
scanner; the barcode technology has been primary used since 1970 whereas for wireless technology
since 2000s. The price of this technology is also relatively inexpensive. For iPad Catalogue strategy,
it is also feasible to be implemented because there have been many game applications that have
similar technology, for example Covet Fashion and Dress Up Diary. Still, what remains as the
keypoint of this implementation feasibility is that applying this technology should be first
precedented by socialization and intensive training for the workers until reaching to the level where
they are ready to adopt the technology thus they could serve customers with competence. In addition
to that applying this technology should also be followed by supportive management so that they will
still keep the offline element regardless of combination strategy with online element. Based on these
elaborations, the strategies proposed do not only give tangible impact, but also are feasible to be
implemented.