How retailers can turn inflation into an opportunity

KPMG’s Head of Consumer & Retail for the ASPAC region, Anson Bailey, has suggested that the Asian retail industry can convert the ongoing inflation and economic challenges into an opportunity to reset its promotional strategies. In an interview with Retail Asia, Bailey revealed that the Gen Z consumer market of 600 million people in Asia presents immense opportunities for retailers. Bailey also mentioned the various challenges faced by the retail industry in the past year due to the COVID-19 pandemic, but he asserted that the future looks bright for the industry.

According to Bailey, the retail industry has become more agile and resilient over the past two years, which has helped it withstand the recessionary and inflationary pressures caused by COVID-19. Bailey also said that the retail industry in the Asian region is not facing the same inflationary pressures as those in the European Union or the Americas. However, he warned that the pressure on margins is real, and retailers must be prepared to deal with it.

Bailey pointed out that there is a significant amount of savings and pent-up demand, which may result in revenge spending and travel. Bailey also emphasised the need for digital transformation, saying that retailers must drive immersive digital experiences for their consumers. He stated that the acceleration of online shopping has created a disconnect between retailers and digitally savvy Gen Z consumers. Thus, retailers must ensure that they are keeping up with consumers on their journey and providing them with digital experiences and customer experiences.

Bailey also stated that while consumers demand authenticity by brands, employees are the new influencers. Therefore, he urged retailers to increase employee empowerment to meet consumer demands.

Bailey believes that the future of the retail industry lies in ensuring that the bricks and mortar businesses are not dead. Instead, they must adapt to changing times and create human connections with their consumers through experiences. He also said that the retail industry must keep up with the trends and remain prepared to serve the Gen Z consumer market.

He believes that the retail industry in Asia can turn the inflation and economic challenges into an opportunity to reset their promotional strategies. The industry must remain agile and resilient, adapt to changing times, provide immersive digital experiences, increase employee empowerment, and create human connections with their consumers through experiences to ensure growth and success in the future.

To know more, watch the full interview.