Millennials offer a “massive opportunity” for retailers and manufacturers in the fast-growing market for FMCG in Asia.
And retailers must improve their understanding of the millennial generation, according to Accenture, a global professional services company, because those customers are about to dominate the market regionally.
Accenture analysis from a number of research reports including Accenture Adaptive Retail and The Future is Now: Understanding the New Asian Consumer reveals the extent to which this group is set to dominate spending across the region.
“This potential impact highlights the need for retailers and CPG companies to embrace digital solutions so they can achieve the connected and integrated shopping experience that millennials are seeking,” Accenture concluded.
According to Accenture’s analysis, eCommerce adoption continues to increase, with sales in the Asia Pacific region expected to rise 300 per cent to US$2.6 trillion by 2020. Millennials in Asia will have more spending power than any previous generation – estimated to be US$6 trillion in disposable income by 2020.
Millennials represent more than 45 per cent of Asia Pacific’s population, and with 60 per cent of the world’s millennials expected to live in Asia by 2020, retailers and CPG companies must improve their understanding of this tech-savvy, media-connected generation to capitalise on the huge opportunity and capture this powerful customer segment.
Speaking at the Accenture World of ME showcase at the Millennial 20/20 summit in Singapore, Teo Correia, senior MD in Accenture’s consumer goods and services practice, said: “Digital is transforming the industry globally by empowering customers with more choices, insights and control. Millennials expect easy and delightful experiences that are tailored to their interests and lifestyles. They are more difficult to predict, increasingly segmented, and devoted to powerful brands and engaging shopping experiences. To win their loyalty, it is imperative for brands to keep it simple but make it personal using data-driven applications.”
Millennials are shopping on the go and demanding more
Consumers are increasingly embracing digital technology and services as part of their everyday life. Today, Asia accounts for the largest number of smartphone users globally at over 50 per cent. Within the region, Singapore and Australia have the highest smartphone penetration globally at over 80 per cent. Meanwhile, millennials in the region spend an average of 2.8 hours per day (or 42.5 days per year) on their smartphones, and over 40 per cent of millennials have shopped via their smartphone.
Accenture’s analysis suggests that millennials are more open to receiving advice than other customer segments. Retailers and CPG companies are trying to meet this generational need through personalisation – but must ensure their methods are acceptable to consumers.
For example, in China and Japan:
- 60 per cent of millennials surveyed, compared to 47 per cent of consumers overall, are comfortable with giving retailers access to their information in exchange for more personalised experiences.
- In stores, 77 per cent of millennials approve of items being automatically discounted for loyalty points and discounts, yet only 37 per cent were interested in sales associates asking about their recent purchases.
- 61 per cent of this group wants promotions sent to them online for items they are considering.
“We see successful brands ramping up their data and analytics capabilities to enable personalised customer experiences and pricing based on loyalty, purchase history, and demographics,” added Correia. “They are increasingly utilising predictive analytics to provide personalised service offerings, and taking advantage of location-based services to embed themselves within customer lifestyles.
“The key to success is communication with the customer on every level. The customer has to have a satisfying brand experience from the very beginning of the experience to the end.”
Digital solutions for a digitally empowered generation
At the Millennial 20/20 summit, Accenture is staging The World of ME, a pop-up concept store of the near-future, which demonstrates some of the most innovative products, services and experiences in the consumer retail sector that Accenture believes will impact the Asia Pacific region. It examines the evolving relationship between millennials and retailers, featuring start-ups from around the globe.
“The key challenge today is ‘digital innovation at speed’ and at Accenture, we believe that start-ups and big brands have something to admire in each other and to learn from each other,” continued Correia. “The pace of change has increased and in a world where new markets and services are created almost overnight, connecting and collaborating to enhance their operations, services and business to better serve their customers will separate winning retailers from the laggards.”