21 Jan 2022
Posted in Retail
Personal financial insecurities stifling retail sector recovery in APAC, observes GlobalData
With the COVID-19 pandemic still creating mayhem, majority (88%*) of the Asia-Pacific (APAC) consumers were going through a phase of financial insecurities during Q4 2021 due to factors like job losses, pay-cuts and various other reasons. Even after 2021, these concerns still exist among the shoppers that have subsequently contributed to the retail sales decline in the APAC region, finds GlobalData, a leading data and analytics company.
According to GlobalData’s Q4 consumer survey, nearly 90%* of the shoppers are spending more time online in general and 66%* claim that they are continuing to socialize virtually/have started doing so/or are doing this more frequently. With the emergence of new strains of the virus, virtual socialization and preference for the online channel will continue.
Ankita Roy, Retail Analyst at GlobalData, comments: “Consumers are adapting to life within home, with many developing new behavior and shredding the old ones. Therefore, it is crucial to understand how consumer lifestyles are evolving, and subsequently how retailers can align innovation and marketing activities to maximize opportunities for success.
“The increasing Omicron cases has impacted the retail domain as many companies have put a halt to their ‘return to office’ plans and stringent movement restrictions have further disrupted the supply chain operations. If shoppers continue to work from home, the demand for apparel and fashion products will remain subdued, which was expected to increase in 2022.”
With COVID-19 leading to lockdowns and isolations, consumers had no other option but to depend on online channels for shopping. This also led to retailers investing in technologies to enhance their platforms and bridge the gap between physical and digital shopping. In-store technologies not only help in building a contactless shopping experience through digitized product catalogs, mobile apps for purchases, or contactless payment processes, but also enhance the experiential aspect of retailing.
Roy continues: “Retailers must continue to harness consumers’ data using tools to identify trends in consumers’ preferences and thereby initiate a successful transaction at a faster pace. Technology also has a role in warehouse and fulfilment centers as it helps generate faster order processing and handling and accelerates the delivery process and allows for contactless delivery.”
COVID-19 has accelerated the adoption of digital services as stores were inaccessible for long periods. Retailers launched new apps to support online ordering and delivery, provide information about services like click-and-collect, and act as a proxy for stores. This certainly does not forebode the death of physical retail.
Roy concludes: “The use of stores will continue to act as a touchpoint for customers who want to explore products or visit to collect them aided by multi-channel or omni-channel capabilities.”
*Data taken from GlobalData’s survey of 6,000 APAC consumers, aged 16+ conducted in early December 2021