In Asia’s fragmented retail market and unique cultural differentiations, effective retail transformation can be fraught with challenges. 

Scott Price, Group CEO of DFI Retail Group, has 30 years of global leadership experience in retailing. An American who previously worked in Japan and led Walmart’s Asian business from Hong Kong, Price returned to the territory three years ago from retirement to head up DFI Retail Group, which operates in 12 Asian markets. 

Price was a guest of Inside Retail’s Amie Larter on the Retail Transformers video series. He shared that among his early moves was to divest from businesses in which DFI was a minority shareholder, including Mainland China’s Yonghui supermarkets and Rustan’s department store in the Philippines. 

“I don’t find trying to influence best practises through a board seat a particularly good use of time.” 

Now, he says, the company is “laser-focused” on wholly owned subsidiaries across five categories: Health and beauty, food, convenience, home furnishings (Ikea), and restaurants. 

“We have really created quite a powerful ecosystem where now the platform of our central support centre is accretive to each one of those five.” Individually, they cannot all become best-in-class in terms of technology – particularly in the new AI era – but under one umbrella, Price looks to the group becoming a better store operator and a better merchant. 

“That is the challenge of Asia: Most of the retailers are fragmented and subscale if you were to compare it to North America or Europe, where multi-country, large-scale retailers are the norm. It’s quite rare here in Asia.”

Price is a big believer in the total shareholder return (TSR) model, because of its simple mathematics. 

“What drives a stock price for investors is your revenue growth, your overall profitability, and then your dividend.” At DFI Retail, he looked at each of those components and determined which businesses were helping, and which were hurting. 

“Any of the ones in the hurting bucket, we got rid of; it was pretty straightforward. So our stock price has more than doubled in those three years from simply implementing that TSR model.”

Subsequent to Price’s interview with Larter, DFI Retail Group has reported a 44 per cent increase in underlying profit from continuing operations during the half year to June 30.  

Customer philosophy

Along with a focus on the top and bottom lines, Price is equally determined to build trust and loyalty among the 20 million customers who pass through its doors every week. This entails deciding what is managed locally and what is managed globally. 

“We have a very clear RACI – Responsible, Accountable, Consulted versus Informed. What we have found is that when it comes to assortment, it is really best done at a local (level). So we set a framework. 

“I would like all of our Mannings and Guardian health and beauty stores to have a similar look and feel. What we have learned is that our customers generally go to two or three different outlets within a three- to four-week period. It makes no sense if each one of them feels like a different shopping experience, down to: If I need to pick up one item and I’ve gotten used to your layout, don’t change your macro space just because some store managers got a more creative idea that reduces the customer ease of shopping.”

That approach creates a frictional experience. “We hold operational and merchants accountable for a framework, and then we provide the tools to be able to do that in a way that is faster, cheaper, and in many ways more tech-enabled than each one of them could do on their own.”

Key here is recognising not just the differences between country markets, but also within each market DFI Retail operates in, where there are often generational differences. 

“Gen Z in Indonesia behaves differently than Gen Z in Hong Kong or Singapore or Vietnam. So we have to compete in all those markets, and we have to understand them demographically. Data is the mechanism by which you do this, and creating the right platforms and decision engines to support the business. 

“There is no one Asia. We’re a multi-country, multi-format retailer. And as I think about North Asia, Southeast Asia, South Asia, as a region, it is probably the most complex, culturally ancient and economically diverse part of the world.” 

Given his view that Asians are adopting technology faster than consumers in any other part of the world, “this is where you come to learn how to compete and survive in any sector just because of how quickly things are moving”. 

A bipolar world of technology

With new technology, data is critical, but, Price stresses, only with strict oversight. 

“We have this emerging bipolar world of technology being used for good and technology being used for evil. And the reality is, 30 years ago, trust with your customer was based in-store, physically. Does the price on the shelf match what’s going to be charged on the register? I’ve come to your store to do my weekly shop. Is every item that I want available? It was very much relationship-based in-store. 

“With the advent of technology, the advent of the digital, the e-commerce, the omnichannel world, we now collectively as retailers hold a massive amount of personal data,” he continues. “And customers give us that personal data and allow us, with each transaction through loyalty programs or e-commerce apps, to build on that data, with the implicit (understanding) that we will protect it.” 

Retirement revisited 

Price returned from retirement to take up the DFI Retail role. Now, he says, this will be his last full-time job. When he retires again, he will instead seek directorships. 

“I failed,” he declares of his first retirement. “After six months, when I almost tried to help my wife organise her art room, she said: ‘Get a job.’ Now, I probably have enough interesting things to do where I won’t attempt to do that, and therefore the pressure to get another job will be gone,” he jokes.

His enduring observation after 30 years in the retail industry is that retail is a team sport, and he has nothing left to prove in my career. His goal at DFI is – when the time comes – to leave behind a business that is resilient and successful, and that people feel good about being part of, “with a great culture where people want to work”. 

“That to me is what success is.” 

• Watch the interview online as Scott Price discusses DFI’s focus on the frictionless relationship with its customers, how the Yuu Rewards Club managed to draw 5.3 million members in a city of 7.5 million, and his strategy of under-promising and over-delivering.