27 May Changing Trends In Retail Today
In today’s changing retail landscape, retailers are facing multiple challenges – a shift in consumer behaviour and market preferences, the advent of technology, cannibalisation from stiff competition in a saturated market and increasing customer expectations, to name a few. Let’s take a look at each of these emerging trends in retail and discuss how training can help retailers wade the storm.
RISE OF E-COMMERCE
More than 26m Malaysians use the internet today, and data from Global Web Index shows that 80% of internet users between the ages of 16 and 64 in Malaysia are already shopping online. Revenue in the eCommerce market amounts to USD 4,337m in 2020 and is expected to show an annual growth rate (CAGR 2020-2024) of 8.4%, resulting in a market volume of USD 5,995m by 2024. This compares to the mundane growth of traditional retail of 2.2% per annum. This poses a significant threat to traditional retailers, which constantly struggle to compete not only in-store but also online.
IMPACT OF SOCIAL MEDIA
Social media has a significant impact on consumer preferences and expectations, especially in Malaysia. According to a study by PwC, 47% of respondents turned to social networks and visual social networks as their main source of purchase inspiration. A staggering 25 million Malaysians (78% of the population) are active social media users. Hence, traditional retailers can definitely benefit from these trends by ensuring Instagram-worthy experiences in their stores.
STIFF COMPETITION AND MARKET SATURATION
In Malaysia, the uncontrolled building of shopping complexes in the last decade has contributed to an overcrowded market in the retail sector. In 2019, the National Property Information Centre counted 1,035 shopping complexes in the country, offering 16.42 million sqm of retail space. 39 more shopping complexes with total retail space of 1.52 million sqm will soon come on board and another 27 shopping complexes with 1.03 million sqm are being planned. This has created cannibalization and stiff competition, with retailers jostling each other vying for the attention of shoppers amidst reducing footfall in the industry.
INCREASE IN CUSTOMER EXPECTATIONS
E-commerce platforms like Lazada are increasing customer product knowledge and raising consumers’ expectations around speed and cost of product delivery. The new generation of shoppers is increasingly looking for instant gratification – they want things faster and with greater relevance, and they’re looking for an elevated level of interaction. Besides that, consumers now demand more brand story and authenticity, as they need to feel some form of relevant emotional connection to a brand, if not purchases will not take place. Whether it’s about buying a coffee, purchasing a new laptop or upgrading a vehicle, retailers need to listen to customer requests and be prepared to deliver on those needs.
In order to thrive in a competitive industry, retailers need to stay dynamic and innovative, track consumers’ changing expectations, and swiftly react by creating more value to consumers. Is your retail business ready to embrace these changes? Do your staff possess the necessary skill to adapt to these changes? In our next article, we’ll share how implementing a good training program for your staff might be able to soften the blow. So stay tuned for more!
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