Changing consumer demands in retail waits for no man
As the tide shifts towards greater shopper savvy, and a growing plethora of consumer touch points, I’d like to share three top observations that retailers need to consider when planning their business strategy.
One, consumer tastes are getting more sophisticated
With a population of close to 5.2 million, Singapore sports an affluent and well-travelled consumer class that is readily shaping new shopping habits. Becoming more discerning, they desire to explore new options and novel experiences. The local opening of French bakery, Maison Kayser in 2011 and PasarBella, a farmers’ market in 2014, reflects consumers’ renewed enthusiasm for quality consumer experiences and evolving tastes. This is not just evident in the food sector but in other areas too, such as clothes, fashion and technology.
Two, move from a splintered to seamless, Omni-channel experience
The modern shopper is no longer limited to consumer experiences via brick-and-mortar stores. According to eMarketer’s latest forecasts, worldwide B2C eCommerce sales will increase by 20.1 per cent this year, reaching $1,500 trillion. Growth will primarily come from rapidly expanding online and mobile user bases in emerging markets, increases in mobile commerce sales, advancing shipping and payment options, and the push into new international markets by major brands. Additionally, the Forrester Research Forecast shows eCommerce rising to account for three per cent of total retail sales in the Asia Pacific region. Globally, digital retailing is also headed towards 15 to 20 percent of total sales numbers.
Fuelled by growing affluence, the consumer profile has taken a pivotal shift, giving rise to a new breed of consumer behaviour – that of the omni-channel shopper. In 2014, for the first time, consumers in Asia-Pacific will spend more on eCommerce purchases than those in North America, making it the largest regional eCommerce market in the world. This year alone, B2C eCommerce sales are expected to reach $525.2 billion in the region, compared with $482.6 billion in North America. However, the advent of online and mobile shopping channels by no means spells the end for physical store fronts. In fact, in 2013, retailers focused on ways to cater to the new omni-channel consumer class, fully understanding the need to engage with their customers both online, and in person at brick-and-mortar stores. The omni-channel shopper is one who wishes to use all channels simultaneously, and is more engaged in terms of spending, expecting a frictionless and consistent shopping experience in and out of the store. In the brick-and-mortar channel, digitally-savvy consumers are entering stores already well-informed about a product’s features and prices, and expect store employees to know more than they do.
Three, new value shoppers are redefining traditional norms
Today, it’s more than just weighing up the cost of the product itself, but also the benefits and experience that comes with it. The main challenge faced by local retailers today would be to keep up with the ever-changing tastes of the omni-channel shopper. Such behaviors drive retailers to change the way they operate in a bid to better engage consumers, providing a more fluid omni-channel shopping experience. Retailers can cultivate loyalty by understanding consumer purchase decisions and develop an integrated marketing plan that puts the customer at the center. Instead of perceiving a variety of touch-points as part of the same brand, omni-channel retailers should allow consumers to experience the it fully, instead of as a separate channel. Merchandise and promotions are not channel specific, but rather consistent across all. Brick-and-mortar stores become an extension of the supply chain, where purchases may be made in the store, but are researched through other “channels” of communication.
There are a series of customer engagement solutions that retailers can take up. For instance, integrating multiple payment systems such as MPOS, or buy online and pickup in store (BOPS) into one solution creates a more convenient way for consumers to make purchases, and aids in queue busting. Retailers can also deliver better in-store shopping experiences by employing real-time location solutions, allowing sales staff to help a shopper find a product that may be out of stock, retrieve it quickly, and upsell around it without leaving the shopper’s side.
You can learn more about how leading retailers are adapting the latest IT solutions by visiting Zebra Retail Solutions, or sending them an email at SGmarcom@zebra.com