Focus on the customer and create an excellent customer journey, says Stuart Thornton, CEO of hoolah, in this interview.
Singapore-based fintech startup hoolah is transforming omnichannel with its “Buy Now Pay Later” (BNPL) philosophy. This company is helping a network of merchants bring responsible affordability to consumers across Asia.
Launched in 2018, the company now operates a 3,000-strong merchant network across Singapore, Malaysia and Hong Kong. What differentiates hoolah from others is that it does not charge consumers interest or hidden fees.
Stuart Thornton, CEO and Co-Founder of hoolah, calls this approach ‘responsible affordability’. We interviewed him for MartechAsia where he discusses a range of topics including the future of retail, consumer shopping trends, and dynamic pricing strategies, among others.
What major changes do you see in consumer shopping trends, before and after the pandemic?
Prior to the pandemic, we were already seeing strong growth and momentum and this was propelled even further with the rise of e-commerce when COVID-19 hit, so consumers are shopping a lot more online.
During the pandemic, consumers are becoming more thoughtful about price and the importance of their personal cash flow during this period. We definitely see BNPL gaining ground as a preferred payment option amongst the Millennials and Gen Z groups.
These are consumer groups who are savvy shoppers, and value payment flexibility as well as personal cash flow. In fact, hoolah has noted a major shift from credit to debit payment with 75% of hoolah transactions made with debit cards in March 2021, compared to 55% in January 2020.
Being able to use Buy Now Pay Later enables them to buy the things they need now, without having to pay the full price upfront. In fact, we’re heartened to see a tremendous growth in the last year: +2,300% growth in transaction volume, 1,400% growth in hoolah users and a doubling of repeat usage. This is a testament to how hoolah is empowering our users to manage their cash flow.
Where are Singaporeans spending their money, on what kind of products? How does it compare with other Asian markets?
Before the pandemic, we saw a tremendous amount of growth in the fashion and cosmetics categories. However, as the COVID-19 pandemic has mandated most of us to work from home, we saw an impact on certain categories such as furniture and household equipment, as more people wanted to optimize their home office setup and do more cooking at home.
This is a similar trend that we are noting from our users in Malaysia and Hong Kong, evidenced by an average of 400% growth (May’20 to May’21) in our home furnishing category, as consumers invested in working desks, ergonomic chairs, home appliances and electronics such as coffee makers across the three markets.
Also in Singapore specifically, we have seen a tremendous amount of growth in our beauty and skincare categories – a 250% growth from May’20 to May’21. This may be due to the ‘maskne’ effect where customers suffer acne/skin issues due to face masks; as such, they are investing more in skincare products. We are happy to be able to help consumers manage their cash flow with our ‘Responsible Affordability’ motto, which accentuates the ways to make the most out of adapting to the new normal.
Sports equipment sales have shot up tremendously in recent times. What explains this boom?
The pandemic has definitely drawn more attention to health and wellness as more consumers are becoming increasingly particular about their wellbeing. In addition, with gyms and studios being closed during lockdown, many are opting to work out in the comfort of their own homes. There is the necessity of making certain purchases to deal with the new normal during the pandemic; and in this case, sporting equipment to set up an effective and safe home gym.
How can sales tech and ad tech help retailers in the fast-evolving consumer market?
Embracing salestech and ad tech helps drive a data-first approach to streamline the way of working, understanding your customers and effectively, growth strategies to scale the business.
In hoolah’s experience, we had to create a seamless platform from the start in order to support scalable merchant acquisition and new markets, and we did so by embedding the Salesforce Customer 360 platform. This helped us to not only build a strong sales and relationship function to gain better visibility over our merchant activity, forecast sales revenue against each stage of the sales process, but also streamline merchant onboarding, which makes this a convenient process for our merchant partners.
In addition, hoolah is not just a payments company; we’re also a marketing platform and channel for our merchants. If we look at the future of retail where traditional retail, banking and finance deviate and converge – hoolah is right at the centre of that. Merchants are seeing hoolah as a critical partner in their marketing toolbox to solve their biggest challenges of driving new customers to their stores, converting them to buy and motivating them to return by not having to heavily discount or spend more on more marketing to drive conversion. In fact, retailers are recognising that hoolah is becoming an important and significant portion of their source of traffic as consumers are browsing on the hoolah store directory. A lot of SMEs see this as massive value to them, and for the bigger retailers, this is traffic they’re not having to pay Google or Facebook for.
Is retail in traditional form dead? How can retailers survive and thrive in a post-pandemic world through an omni-channel retail experience?
No, definitely not! We have seen an uptick in in-store transactions after restrictions in Singapore were eased and physical retail shops opened post-lockdown. There’s definitely still space for physical shopping for consumers despite the uptake in online shopping during this period.
We’ve learned that you can’t rely on just one channel to bring in all your business. You need to shape your business around how and where your customers buy, embrace technology to drive the customer experience and make sure you’re giving them a great experience. For hoolah, our goal has always been on building a truly omnichannel solution where a customer could seamlessly shop where they preferred but still have the same great experience. This meant ensuring that customers can see and manage their orders in one place, regardless of where that order was placed. It also meant that the value proposition remained the same and was communicated in the same manner.
While it has been a challenging year for retail, with retailers having to navigate the new normals, the pandemic has spurred innovation with retailers pivoting to digital channels to make sure their customers could still make purchases.
A perfect example is BHG Singapore, one of our departmental store merchant partners in Singapore. BHG pivoted to an omni-channel strategy and focused on their own digital ecommerce platform during Singapore’s circuit breaker period. BHG integrated hoolah’s BNPL payment solution onto both their online and in-store stores, offering their customers the same convenient, flexible BNPL payment experience no matter where they shop, which is especially beneficial during this time as it helps sustain their business through recovery and onto growth.
What role does dynamic pricing play in retail? Should all retailers test it out?
We see both pros and cons to dynamic pricing – it might create higher levels of demand but at the same time, there’s an opportunity of losing savvy shoppers and resulting in an unsustainable business.
We believe that BNPL is a more sustainable approach that benefits both consumers and merchants, as compared to dynamic pricing or heavy discounts. Price is always a big factor for consumers, and BNPL appeals to them as it splits their purchases into three monthly, interest-free repayments.
On the merchant side, BNPL solves four key problems as follows:
- Traffic – stimulating demand without resorting to discounting activities;
- Conversion – getting more customers through the checkout flow;
- Basket Size – helping customers buy the optimal basket of goods; and
- Customer Loyalty – getting repeat customers without any heavy spending
With BNPL, merchants have a solution that solves all these challenges at a fraction of the cost.
What is your top 3 advice for retailers in the market?
- Customer obsession is key
Focus on the customer and create an excellent customer journey. By doing this, you’re always focused on delighting your customers, which in turn benefits the B2B relationships that you might have as well as the consumers that you’re engaging with.
It’s also vital to know and understand your customers well- what they like, what they don’t and really understand their psychology in order to meet their changing expectations and preferences – this is especially the case in Asia where local requirements can differ. One of the key components in hoolah’s strategy is to deliver a truly local and personalised experience that meets our customers’ expectations and create a sense of intimacy, empathy and trust that will ensure consumers keep coming back. - Paving the way with an omni-channel strategy
As consumers are shifting some of their buying behaviour to online it was important to cater to this experience. Digital natives are engaged in social media but seek an experience which is both physical and digital. An omnichannel strategy is therefore important.
We knew that at some point the retail stores would have to open again – they couldn’t stay closed forever – and remain an important cultural engagement point for consumers. With this in mind, we focused on executing on our in-store solution so that we could time our launch for when the stores eventually opened for business. This has also proven valuable to our merchants who have sought innovative solutions to engage consumers effectively – we have now passed over 3,000 retail store partners across Singapore, Malaysia and Hong Kong. - Providing a seamless and secure payment experience
As consumers grow increasingly tech-savvy, they are also more discerning about their expectations regarding their payment experience. Shoppers have come to expect a frictionless payment experience across online and offline channels, and in particular, they value the transparency, ease, flexibility, rather than purely savings from traditional routes of discounting. It’s important to nail this aspect of the customer experience in order to improve conversion rates of returning customers. BNPL is a differentiated way for a lot of consumers to have immediate access to the things they want or need, while enhancing the overall shopping experience.
