Consumers’ financial insecurity hit APAC’s retail sector
Nearly nine in 10 consumers went through phases of financial insecurity in Q4 2021.
Asia Pacific’s retail sector suffered in 2021 from the persisting financial insecurity amongst consumers due to various factors like job losses and pay-cuts throughout the year, according to a report from GlobalData.
With the pandemic still creating mayhem, 88% of Asia-Pacific consumers were going through a phase of financial insecurities during Q4 2021, the report found in a survey.
The rising Omicron variant cases has adversely affected the retail domain in the region as many companies have put off their ‘return to office’ plans and stringent movement restrictions have further disrupted the supply chain operations, GlobalData’s retail analyst Ankita Roy said.
Roy noted that if shoppers continued to work from home, the demand for apparel and fashion products will remain subdued although it was expected to rise in 2022.
“Consumers are adapting to life within the home, with many developing new behaviour 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 maximise opportunities for success,” Roy said.
Nearly 90% of the shoppers are spending more time online in general and 66%* claim that they are continuing to socialise virtually/have started doing so/or are doing this more frequently. With the emergence of new strains of the virus, virtual socialisation and preference for the online channel will continue.
With COVID-19 leading to more lockdowns and isolations, consumers were forced to depend on online channels for shopping. This led to retailers investing in technologies to enhance their platforms and bridge the gap between physical and digital shopping, the report noted.
In-store technologies not only help in building a contactless shopping experience through digitised product catalogs, mobile apps for purchases, or contactless payment processes, but also enhance the experiential aspect of retailing, GlobalData said.
“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,” Roy added.
The pandemic has accelerated the adoption of digital services as stores were inaccessible for long periods, with the report noting that retailers have launched new apps to support online ordering and delivery, provide information about services like click-and-collect, and act as a proxy for stores.
“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,” Roy said.