As we approach the year end and one of the busiest shopping seasons and shopping festivals of the year, retailers in the region are at a loss on how to recover. In Asia, the season starts with the 11.11 Singles’ Day sale followed by 12.12. The term was coined by e-commerce giant, Alibaba in 2009. China’s Singles’ Day is now an annual worldwide hundred-billion-dollar phenomenon for Asian e-commerce powerhouses. We looked at XACT, our proprietary data management platform, to uncover the 4 consumer insights retailers need to know to tackle this year end season.
According to our XACT data, in 2019, most countries still recorded increases in footfall traffic leading up to 11.11. This shows that retail customers would flock to the malls to scout out the products they are looking for before opting to purchase them online later, when footfall then plummets. Singapore was the only country that seemed unaffected (Figure 1), possibly thanks to in-store specific 11.11 promotions.
During the COVID-19 pandemic, retailers have had to deal with a 34% decrease in overall spending, except for groceries and essentials, as seen in a joint survey we conducted with (Retail Consulting house? What is their description?) Pinnacle Analytics (Figure 2). In order to soften the blow to consumers, brands can introduce extended buy now, pay later pricing models during this year-end sale period.
There is also a 40% increase in consumer’s willingness to try new brands, according to a survey by Bain & Company (Figure 3). Businesses can leverage on this by introducing specific bundle buys to increase the purchase of non-essentials. For example, Consumer Packaged Goods (CPG) players can bundle soft drinks with potato chips which have increased since shoppers started spending more time at home.
A mindset change is in order for retailers still hoping to go back to pre-pandemic days. Retail customers have changed the way they shop with most of them intending to make the change permanent. For instance, 70% of consumers have increased their at-home and contactless shopping habits, according to a survey by Bain & Company (Figure 4). Meanwhile, over 30% have shifted to purchasing from neighbourhood malls, according to the ADA & Pinnacle study (Figure 5).
Retailers can meet consumers halfway. Some examples include KFC and Nando Malaysia’s curbside service or Indonesia’s 99 Ranch Market to order online and pick up in store. Another more creative solution is the introduction of parcel lockers in Thailand for consumers that lack the mailbox space or are too busy to receive their parcels from online stores.
According to our XACT data, malls have not yet recovered after nearly a year of the pandemic, (Figure 7) although the use of shopping apps has increased and continues to stay high.
As retail customers shift their shopping behaviour online, many brands are pivoting to follow suit. But not all can find the right value proposition or ensure an uninterrupted supply chain to meet increased demands. For example Singapore Airlines’ “Flights to Nowhere” may be a solution for now but it’s hard to see this as a long term solution for the business given their fleet size.
It is also important to consider availability as a value proposition. Keep an eye on your supply chains lest you end up like Shiseido in Thailand which sold out during the first 30 minutes of their online sale. While pivoting your retail sales channels don’t forget your supply chains and don’t hesitate to leverage on retail analytics to monitor demand by locality through solutions like our Retail Business Insights Dashboards or Location Planning. Businesses can also leverage on AI – just as how Unilever has been using AI to ensure stocks are kept in check.
Even before the pandemic, retailers had been struggling to keep up with retail customers and their accelerated shift to digital. Those advocating for more focus on digital transformation can now ride the wave where entire industries are simultaneously being forced to go digital or, in many cases, die. In short, retailers need to start planning for the next shopping holiday early with 12.12 just around the corner, this could be the chance for businesses to finally take the lead and drive the trends of consumers once again.