Business
REACHING any midpoint, whether it’s to catch one’s breath on an ultra-marathon or for a project team reflecting on their progress, is all about positioning for success. Similarly, a mid-year retail check-in offers valuable insights into the latest developments shaping how retailers connect with consumers and drive innovation in the second half of the year.
Overview | Global & Local
The rise of e-commerce, the integration of online and offline shopping, the focus on sustainability, contactless payment options, price-sensitive strategies, and building customer loyalty have dominated the past six months. In addition, the broader classification of the consumer is changing yet again. If 2023 was the year of the resilient consumer, 2024 is shaping up to be the year of the empowered consumer.
According to Mastercard Data & Services (May 2024), despite rising interest rates, inflation, and the threat of a recession, consumers confidently spent in 2023. This year, however, consumers are carefully prioritizing resources, with many people worldwide now looking for more deals and discounts to balance their household budgets. Technology is playing a bigger role in bringing innovation and efficiency to retailers and consumers, reflecting a more concerted shift towards a customer-centric and digitally driven retail landscape.
“Don’t blink was my pennies worth at our trends check-in November 2023,” said Mike Smollan, Chief Growth Officer, Smollan. “We’ve seen rapid changes this year, from powerful tactical retail that has global brands amping up the flavor and integration experience for consumers. In South Africa, for example, 61% of Gen Zs find their feet and tell us via a recent Trade Intelligence report that social media influencers are their best source of information when it comes to shopping. It’s about meeting consumers wherever, whenever, and however they prefer to shop, and embracing the shift to empowered consumerism.”
Global retail examples provide a relevant yardstick to illustrate these shifting dynamics on a larger scale. Walmart, despite relatively little store growth, has maintained its number one ranking with a robust online marketplace and new financial resources for shoppers. Costco expanded its warehouse format to several countries, while Ikea is reinventing itself by opening smaller-format stores worldwide.
The e-commerce world continues to baffle the brain, with relative newcomer Temu topping US$5 billion in sales in 2023, just one year after its launch. Statista reports that their app has been downloaded over 52 million times as of May this year.
In South Africa, Shoprite has adapted in 2024 to serve customers who want more promotions, combo deals, and collective buying. They have expanded their premium stores and on-demand delivery services and ventured into mobile services and financial offerings. On the e-commerce front, Amazon’s entry into South Africa in May has suggested a possible pricing war benefiting consumers with faster deliveries, more products, and better support. Takealot, in response to Amazon’s entry, launched a free delivery service with a monthly subscription.
At A Glance | Four Trends
Accelerated ways to enable retailers to anticipate, experiment, adapt, and satisfy consumers, even before they are aware of them, will be the golden thread. Forbes identifies four evolving trends for the second half of the year:
1. Sustainability Customers want organizations to step up and show proof of their eco-stance. However, they have “green fatigue” and can quickly detect businesses that are merely greenwashing.
2. AI This technology is constantly evolving. Retailers need to use AI to improve efficiencies and processes while balancing this with a human touch.
3. Personalized Communication Consumers want messages tailored to them and their purchasing behavior, not general marketing messages. There is a shift from purely transactional to empathetic communication.
4. Social Commerce CRM Essentials showed that 37% of consumers trust influencers more than brands. This year, social commerce and creator economies present a symbiotic relationship as brands focus on telling stories on social platforms that conclude with a commerce moment.
These trends reflect the dynamic and rapidly evolving retail landscape as businesses strive to meet the needs and preferences of today’s empowered consumers.
F.A
July 2, 2024
Tags: Mid-year Retail Trends sustainability
