Mike Smollan, Chief Growth Officer at Smollan unpacks the four trends identified by Forbes that will drive the second half of the year.
Reaching any midpoint, whether it’s to catch one’s breath on a ultra-marathon to gear up for the next stretch, or a project team reflecting on their progress and making necessary modifications – it’s all about positioning for success. So too a mid-year retail check-in offers valuable insights into some of the latest developments shaping how retailers connect with consumers and drive innovation in the second half of this year.
Overview: Global And Local
The rise and rise of ecommerce, the integration of online and offline, platforming sustainability, contactless and convenient quick and easy payment options, price-sensitive pricing strategies and building customer loyalty – dominated the past six months.
So too, and no surprises here, but the broader classification of the consumer is changing yet again. If 2023 was the year of the resilient consumer, it seems that 2024 is seeing the year of the empowered consumer. Mastercard Data & Services (May 2024) reported that despite rising interest rates, inflation and the threat of a recession, consumers still confidently spent in 2023. This year however, consumers are carefully prioritising resources – with many people worldwide now looking for more deals and discounts to carefully balance their household budgets. Technology is also playing a bigger role in bringing innovation and efficiency to retailers and consumers, reflecting a more concerted shift towards a customer-centric and digitally driven retail landscape.
‘We’ve seen the rapid changes this year, from powerful tactical retail that has global brands amping up the flavour and integration experience for consumers. To local shifts in South Africa for example, with 61% of Gen Zs finding their feet and telling us via a recent Trade Intelligence report, that social media influencers are their best source of information when it comes to shopping. It’s about meeting consumers wherever, whenever, and however they prefer to shop, and being cognisant of and embracing the shift to empowered consumerism,’ said Smollan.
Global retail examples always provide a relevant yardstick to illustrate these shifting dynamics on a larger scale. Take Walmart for example who despite relatively little store growth, has maintained its number one ranking with a robust online marketplace and a range of new financial resources for shoppers. Costco expanded its warehouse format this year to a range of countries while Ikea is reinventing, by opening smaller-format stores around the world.
So too, the ecommerce world continues to baffle the brain – with relative newbie Temu topping US$5 billion in sales in 2023, just one year after they launched. With Statista reporting that their app has been downloaded over 52 million times as of May this year. A wild ride and evolving storyline as we watch the disruption of this sector.
Closer to home, Shoprite South Africa (SA) have adapted in 2024 to serve customers who want more promotions, combo deals and collective buying. They also noted that their customers are switching to private labels. Furthermore, they have expanded their premium stores and on-demand delivery services, as well as venturing into mobile services and financial offerings. On the ecommerce front Tech Safari, reporting on Amazon’s entry into SA in May this year, have suggested a possible pricing war benefitting consumers with faster deliveries, more products and better support. This space in the spotlight from now until year end and beyond, with competition on the up as Takealot, in response to Amazon’s entry, launched a free delivery service with a monthly subscription.
At A Glance: Four Trends
Accelerated ways to enable retailers to anticipate, experiment, adapt and satisfy consumers, even before they are aware of them, will be the golden thread. With Forbes identifying four evolving trends for the second half of the year:
Sustainability
Customers want organisations to step up and show proof of their eco stance however they have “green fatigue” and are quickly on the scent of businesses that are simply ‘greenwashing’.
AI
This is constantly evolving and retailers need to use AI to improve efficiencies and processes, and balance this with a human touch.
Personalised Communication
Consumers want messages tailored to them and their purchasing behaviour and not to be bombarded with general marketing messages. Shifting tactics from purely transactional to empathetic.
Social Commerce
CRM Essentials showed that 37% of consumers trust influencers more than brands. This year social commerce and creator economies present a perfect symbiotic relationship as brands are now more focused on telling stories on social platforms that conclude with a commerce moment.
SMOLLAN
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