While retailers in Singapore have enjoyed a 5.3% increase in sales this January due to an earlier Lunar New Year, the results of the seasonal advantage may prove short-lived, with retail sales suffering a 1% year-on-year drop in March.
Beyond Singapore, retailers across Asia Pacific are coming to grips that though consumer trends share similarities across the world, the success of certain strategies varies greatly from country to country across the APAC region. For example, findings from the 2019 iVend Retail global survey of shoppers revealed smartphone shopping having a 59.8% uptake among Australians who like to shop on the go. This statistic jumped to 90.4% for consumers in the Philippines, where most consumers access the internet via mobile phone. At the same time, Australians were more discerning with their purchases with 89% utilising their mobile to webroom, while consumers in the Philippines who preferred this convenience accounted for just 67.6%.
What about Singapore?
Focusing on Singapore in particular, the opportunity for omnichannel growth depends upon a better understanding of consumer attitudes towards online and offline experiences.
On the online front, Singapore accounts for 89% of all cross border transactions in the Asia Pacific region, an attractive figure that incentivises the e-commerce capabilities of retailers to become faster, more reliable, and secure to earn consumer trust and grow their market share. Paired with the ASEAN Agreement on e-commerce signed on the 12th of November 2018, governments across Asia are working towards improving the infrastructure and accountability for online transactions.
On the offline front, a 0.1% increase in rent rates was followed by a 7.5% increase in the vacancy rate for retail space in Singapore. However, department stores have managed to stay ahead by curating merchandise and introducing focused and targeted retail experiences, resulting in profitable results. This shows that consumers in Singapore prefer depth to breadth in their offline retail engagements.
Engaging generations of customers
As further studies show that balancing communication and convenience with omnichannel efforts resonates differently across the globe. The myriad of possibilities causes the dilemma of analysis paralysis for retailers where the best tool for the job might not be obvious. To get a clearer picture, we will examine the 3 key age demographics of shoppers around the world; Gen Z (18-24), Millennials (25-42), and Gen X (43-54), and share effective approaches to engage them.
Gen Z (18-24)
With an estimated spending power growing between $29 and $143 billion, Gen Z are digital natives born into a world already connected by digital technology. They expect mobile-friendly touchpoints and sales channels from the brands they engage. Being constantly bombarded with online ads, and closing them just as quickly is a reality they have grown up with, they know they are always being sold to.
We have seen retailers benefit by shifting from celebrity endorsements to influencers with authenticity to give them credence, as a study shows that 77% of US teens prefer ads with “real people in real situations”. Members of Gen Z like to get involved, retailers that encourage user-generated content will get more traction among Gen Z and their peers. Gen Z seeks true brand connection with brands that express and become an extension of their lifestyle.
Millennials are a fascinating bunch, and a topic of contention among many retailers which comes as no surprise, with spending power projected at $1.4 trillion in 2020, they are poised to be the most powerful consumers in the next 10 years. This generation has grown along with the Internet. With 75% of purchasing decisions influenced by Instagram, and Millennial parents seeking parenting advice on social media, retailers need a healthy presence on social media.
Our advice for retailers wanting to capture this demographic to offer relevant offers and personalised deals both offline and online will attract the attention of Millennials. Growing up with brick and mortar stores, offline retail experiences are an important component. Shopping becomes a social excursion for them where they seek VIP experiences and retail innovations.
Gen X (43-54)
Gen X is recognised, but not given attention, with 54% feeling the frustration of being ignored by brands. They are also not given enough credit. Though Gen X saw the rise of the Internet later in their years, they spend more time on social media than Millennials weekly. They might be outnumbered by Millenials and Gen Z, but they have a significantly higher average income.
In our experience, ignoring traditional media is a common mistake we see retailers make. Traditional media still maintains significant reach for Gen X, and Gen X ranks the highest for brand loyalty, and thoroughly researches their product before committing. Retailers who creatively utilise rewards and loyalty programs and give them the ability to learn more about the product through websites or knowledgeable employees gain an advantage.
Approaches across all demographics
From our studies, we concluded that consumers prized convenient transactions as the base foundation of their omnichannel experience, and it had to be equally supplemented by a loyalty/rewards infrastructure, hassle-free return policies, and ease of pickup and delivery, followed by transparency in product explanation and usage. With that in place, comes the directed efforts towards age demographics.
Convenience is only the beginning. Retailers need to be personable and honest in the representation of their products in their offline experiences, and their social media presence. They need to be proactive in always being relevant to the lifestyles of their consumers through timely communications and understand their needs as individuals.
The article appeared originally on SBO under the title ‘Understanding The Retail Generation Gaps And How To Target Them‘