Famed management consultant Peter Drucker once coined the phrase, “Innovate or die”. When it comes to the retail space in this day and age, this old adage has a familiar ring to it. This era of retail is undergoing a technological revolution unlike any other. From cutting edge technology in the supply chain to groundbreaking metaverse initiatives and non-fungible tokens in customer experience, it certainly is an interesting time in the retail sector. It’s no secret that the pandemic has gr
has greatly accelerated the digital side of things for retailers across the globe. KPMG’s recent survey of over 75,000 global consumers revealed that the new boom in the Internet Of Things (IoT) sector is something that needs to be highlighted. “There will be at least 31 billion IoT devices globally by 2024, according to estimates, and this is simply staggering. This of course has a huge significance in the retail industry,” KPMG’s head of consumer Anson Bailey said at the Future of Retail conference earlier this year. Companies are under a lot of pressure to ensure their products are sourced ethically and meet the sustainability guidelines that are now becoming commonplace in most global markets. An evolutionary age Bailey discussed that customers are also more discerning about the circular economy and why it’s important to hold companies accountable in an age where being sustainable is now a prerequisite and no longer a luxury. “The rise of the Generation Z customer demographic who place “trust and purpose” of brands is also another significant factor for brands to appreciate. These consumers will have a stronger affinity for brands that resonate with them, in terms of their corporate values and social initiatives.” Bailey explained that apart from sustainability and ethical business practices, brands which put an emphasis on diversity, equity and inclusion (DEI) will also score higher among the Gen Z target market. “Just to put it in perspective, there will be 300 million Gen Z consumers in China alone in the coming years, so marketers need to be ready to pounce.” “They are tech and media savvy, socially aware, and much more sensitive to current affairs as compared to previous generations,” Bailey noted. Being agile is a must Bailey went on to say that brands need to be more dynamic, nimble and agile in this regard, as this target market will always be observing the behaviour of companies in the marketplace. Newfangled buzzwords such as big data, artificial intelligence (AI), and analytics are all becoming increasingly important to ensure the metaverse strategy can target the Gen Z market successfully. CEO at Hong Kong-based 3D sneaker brand Fused Footwear, Philippe Holthuizen, is also of the opinion that the Gen Z and Millennial category is now becoming a real focus for brands and companies in this new age of retail. “The marketing mix to target this segment is also wildly different from conventional tactics. These consumers want brands to push the envelope in the digital sphere and are comfortable interacting with them online as most of them view themselves as global citizens,” Holthuizen said. Reality bites According to Hong Kong-based innovation expert and investor, Desmond Marshall, companies in the Asian region are still in ‘survival mode’. The pandemic has hit them hard, and most of them are struggling to make a breakthrough amid the digital pivot and new market realities. Most of the problems lie within company cultures that are not evolving with current market needs. “Higher management structures are always dominated by the older generation who are not ready to accept that the younger generation within the companies hold more answers to unlock the untapped potential in their commercial operations,” he noted. Companies still need to work on connecting with customers socially authentically, and this is what he thinks is still a challenge for most Asian companies in the modern social media landscape. Focus on conversations Most companies are always focused on creating “super apps”, according to Bailey, although there needs to be a consensus on creating “super conversations”. Essentially, the business of selling products has not entirely changed, despite the latest advancements in technology, he said. The harder thing for brands these days is to have meaningful interactions with their target markets in an authentic manner. This is true not only for the retail space, but also business in general. “You just can’t take the consumer for granted anymore, it’s no longer the case, pure and simple,” said Bailey. It’s time to get back to basics for retailers in terms of their relationship with customers. Bailey believes that the old adage of “know your customer, love your customer,” should make a comeback, as companies need to win over the hearts and minds of their prospective buyers. Essentially, retailers need to innovate in terms of building customer relationships and becoming more customer-centric. Embrace change Holthuzein echoed Bailey’s thoughts but also mentioned the importance of retailers integrating payment systems that featured cryptocurrencies. He feels it can only enrich the marketplace and make the Gen Z and millennials category more keen to participate in the ecosystem. Compared to credit cards that have stipulated transaction fees for every action, the cryptocurrency platforms do not have fees, and this could be a big factor for Gen Z and Millennials, going forward. Interestingly, Holthuzein did mention that NFT labels, QR codes and even ultraviolet or infrared labels that are detectable via mobile devices, could be another method for retailers to create a connection with consumers. Traceability of materials, sustainability and ethical labour practices can all be translated into editorial content via the backend for the retail industry. This is a perfect example to create conversations with the target audience in an authentic way, he said. There seems to be a consensus among experts that companies who have a strong environmental, social and governance focus will do better in this new age of retail and technology. Governments and financial institutions are also introducing more regulations to ensure brands and companies embrace a more holistic approach to their commercial aspirations too. Be impactful This of course leads to the topic of greenwashing. According to Marshall, a number of companies have given a false impression or provided misleading information about being environmentally responsible – and consumers are not afraid to call them out on social media. For example, some companies exaggerate claims or benefits in their recycling initiatives or energy saving benefits. At the end of the day, brands need to move from just being fixed symbols or success, but provide the fuel that helps people reach their potential. It’s really about generating a massive shift from being aspirational to being inspirational, he said. There is a need for authenticity and collaboration to be hallmarks of brands trying to connect with its consumers in this global village. Diversity, equity and inclusion (DEI) is also part and parcel of this jigsaw puzzle; as brands move towards behaving inclusively. In short, brands that stand out, stand up and be impactful can be distinctive and mult-dimensional in our saturated marketplaces.