May 21 / Samantha
In case you missed the news, the World Health Organization has warned that war against the Covid-19 pandemic might go on for at least 2 years, before a vaccine could be found. That means, even after the Movement Control is lifted, social distancing will be the new norm, and consumer shopping behaviour in Asia will be redefined as a result: here are four key trends to expect in the post-pandemic world:
♦ Shift in spending towards essentials and ‘affordable luxuries'
Consumer confidence in Asia is currently at an all-time low, with only 27% of shoppers having a positive view about their personal finances over the year ahead. Unsurprisingly, the majority of consumers intend to cut back on big-ticket items such as luxury fashion and furniture.
While demand for essentials such as groceries and household goods remain robust, 4 in 5 Asian consumers also state that they will not be cutting back their expenditure on beauty and personal care items. During times of economic crisis, beauty and cosmetics are seen as affordable luxuries that provide a form of escape from the doom and gloom.
♦ Transparency is critical in fulfilment battle
Quite expectedly, the pandemic resulted in a huge surge in e-commerce activity. Nearly half of all shoppers in Asia intend to increase their online spending versus physical retail over the coming year, while 38% will keep it at the same level. With so much spending set to shift online, retailers will need to stand out from the competition by sharpening their fulfilment proposition.
While consumers in Asia value free shipping service the most (86%), in terms of costs this might not be feasible for all retailers. However, it’s important to note that offering transparency in the fulfilment process – such as being able to track deliveries (83%) or picking a delivery time slot (76%) – trumps speedy fulfilment services such as same-day deliveries and delivery within two hours.
♦ Broader acceptance of retail formats that support the circular economy
The notion that Asia is lagging behind when it comes to support for sustainability initiatives can be put to rest. Two-thirds of all consumers in Asia state that they will consider a brand’s sustainability credentials when making a purchasing decision.
At the same time, nearly half of all respondents say that they shop for pre-owned and second-hand merchandise. The report also finds that the acceptance of rental services – such as those offered by Style Theory and Covetella – are gaining traction. With personal finances expected to remain under pressure, demand for similar circular business models is set to increase further in the coming year.
♦ Technologies that aid social distancing in physical retail
Once lockdowns are lifted, there will be renewed enthusiasm in consumers that simply want to go out for a visit to the shops. However, retailers need to take note that the consumer psyche has changed and shoppers will naturally be more hesitant about physical contact in a store setting.
Brick-and-mortar retailers need to latch on to this sentiment and invest in the appropriate technologies to make shoppers feel more comfortable. Scan-and-go technology, whereby consumers’ mobile phones are used to scan products and pay at the end, would be a great way to achieve this as four in five Asian shoppers (79%) state that they are open to using this technology if available. Similarly, 71% would make use of automated check-outs – such as those seen in unmanned retail concepts.