Did you know retail sales are estimated to represent close to 20% of South Africa’s GDP? Facing a barrage of ever-changing micro and megatrends, it remains crucial that our local retail industry moves with shifting shopping patterns. Dion Chang of Flux Trends offers some valuable insights into the latest movements and breaks down the trends currently impacting the retail industry.
Current concerns for store owners include:
• So-called ‘hermit’ consumers and how to draw them out.
• The rise of the tech-savvy shopper and ‘phygital’ shopping.
• The need for elevated in-store service.
• Pervasive pragmatism and price consciousness.
• Live-streamed sales promotions.
• The recommerce boom.
Chang believes ‘seamless service and user experiences, considered design and a high value shopping experience can draw customers from their hermit states’. With the age of the ‘hermit consumer’ heralded by publications such as The Economist, consumers continue to turn inwards post-Covid, spending more time at home and acting accordingly – shopping online, ordering groceries for delivery and turning to social media for inspiration.
‘What they are shopping for is also affected by the hermit behaviour – it’s not just how they shop but also what they are now buying, such as products geared towards making the home environment more of a cocoon,’ Chang explained.
The V&A Waterfront has noticed a slight drop in frequency of shopping visitors, which is likely due to these general shifts in shopping habits and increased uptake on online grocery sales which has reduced the daily or weekly shop in favour of monthly shopping visits. ‘However, when shoppers do visit,’ said Alex Kabalin, V&A Waterfront Retail Executive, ‘their spend per head has increased materially, which more than offsets the drop in frequency.’
Elevating the everyday can keep consumers coming back in person. Service excellence, while a perennial concern for business owners, is necessary for drawing out hermit consumers. Brand loyalty is earned through exceptional service that raises the consumer experience, personalised rewards incentives and classic convenience.
Considering recent visitor statistics, the V&A Waterfront still records a long visitor duration or ‘dwell time’ in the precinct, which Kabalin credits to the holistic nature of the space: ‘This is testament to the qualitative aspect of the neighbourhood as a pleasant, safe and enjoyable place beyond shopping as well as the significant amount of leisure attractions and activities on offer.’
Generational shifts are showing up heavily in the retail sphere, according to Chang. ‘Tech-savvy shoppers are becoming centre stage, and demand is high for retail that seamlessly straddles online and offline spaces. This form of phygital integration sees the physical store meet the online in a way that caters to the unique needs and expectations of different generations,’ he said.
In 2024, successful retailers are those that provide integrated experiences, such as buy-online-pickup-in-store and real-time inventory visibility across channels. Enhanced loyalty programmes and personalised marketing across these platforms further strengthen customer engagement.
‘Livestreaming e-commerce is gaining traction in the retail landscape, merging entertainment with shopping in a dynamic, interactive format on social media platforms like TikTok,’ said Chang. This trend, popularised in markets like China, is now gaining traction globally, allowing brands to showcase products in real-time while engaging directly with users.
Brands are also moving more into the resale and rental space in what is being called the ‘recommerce boom’. While recommerce is not a new trend as such, Chang and other trend forecasters are seeing an accelerated industry-wide shift to second marketplaces and luxury goods rentals. Major brands are implementing their own B2C recommerce initiatives, and third-party C2C marketplaces like Facebook Marketplace, Yaga and Depop continue to draw users.
This recommerce trend also ties into general sustainability trends that continue to be a mainstream concern for consumers. By promoting circular economy principles, recommerce not only reduces waste but also offers consumers access to high-quality products at lower prices, fostering a more sustainable and economically inclusive retail ecosystem.
This demand for more affordable retail emerges as a direct result of worldwide cost-of-living crises, which Chang has seen affecting consumer behaviours both locally and globally. ‘Pragmatism appears to be the overarching theme in retail at present,’ he sais. ‘With the global economy taking major hits and geopolitical instability leaving consumers cautious and selective, consumers are considering the price tag of products more than ever. Tight budgets are a hard-hitting reality, shifting the retail landscape accordingly: cost is king.’ Price consciousness may force some consumers to opt for less expensive products regardless of whether they are sustainably produced.
Owing to his vast experience in trend forecasting and business strategy, Chang will form part of the judging panel of the upcoming V&A Waterfront Neighbourhood Awards. With winners to be announced on 19 September 2024, the newly launched awards celebrate the embodiment of retail excellence within the Waterfront precinct, honouring retailers that provide an unparalleled shopping experience reflecting the evolving needs and desires of modern consumers.
Award categories include the Digital Innovation Award (which celebrates the tenant who has demonstrated exceptional creativity, engagement and effectiveness in the use of digital and social media platforms to connect with customers); the Inspired Visual Merchandising Award (which honours the tenant with the most visually appealing and effective store displays); and the Retail Service Excellence Award (awarded to the retailer who demonstrated exceptional customer service within their store). These accolades not only reward the key tenets of retail, but also highlight brands that are effectively navigating the trends Chang has outlined.
FLUX TRENDS
www.fluxtrends.com
