Reflecting on the dynamic retail landscape of Asia in 2023, we delve into the trends that have shaped the industry.
From the rise of omnichannel experiences to the surge in sustainable practices and the transformative power of AI technology, we explore the key developments that have redefined the way consumers shop and businesses operate in the region.
SEE ALSO: ‘Haute-spitality’ round-up: How luxury brands are tapping into hospitality ventures around the world
Athletes as the new celebrity brand ambassadors
In 2023 brands across categories, from luggage brand Tumi to beauty and luxury houses Dior and Louis Vuitton, increasingly turned to athletes as brand ambassadors for a multitude of reasons. Firstly, athletes embody a unique combination of physical prowess, discipline, and dedication that resonates with consumers. Their exceptional performances on the field or court symbolise excellence, which luxury brands seek to associate with their own products or services.
Like models and actors, athletes who have come into stardom in the social media era also often possess a strong personal brand and a massive following, making them influential figures who can engage with a wide range of audiences. By aligning with successful athletes, luxury brands can tap into their popularity and leverage their fan base to enhance brand visibility.
In an era where authenticity and relatability are highly valued, athletes are perceived as genuine and authentic endorsers due to their real-life accomplishments and the dedication required to achieve them.
Bigger and better: Experiential retail and ‘retail-tainment’ reigned supreme
To remain relevant and attract shoppers in the post-Covid era of e-commerce, landlords are incorporating current and new activity-based retailers into their tenant mix, according to Cushman & Wakefield. For their part, brands have gone all out with pop-ups and creative activations that have helped to capture attention on the ground and on social media.
Throughout the year, brands focussed on crafting immersive experiences, showcasing personality and values while driving sales with exclusive products and convenient shopping journeys.
In the realm of luxury, brands also stepped out of their comfort zone by steadily expanding their reach from haute couture to ‘haute-spitality’.
Recognising the evolving preferences of younger consumers, fashion houses and other luxury brands showed determination in exploring food and hospitality activations as a means to captivate and engage this demographic. By venturing into the realms of dining experiences, hotels, and immersive hospitality concepts, in 2023 luxury brands leaned into offering a holistic, multi-sensory experience that goes beyond traditional fashion offerings.
Sustainability and resale increasingly embraced
As environmental concerns continue to escalate, consumers are actively seeking environmentally-friendly choices and are prepared to invest more in sustainable products.
In the face of escalating environmental concerns prompted by extreme weather events worldwide, Bain & Company surveyed 23,000 consumers, with results emphasising escalating concern expressed by individuals. A significant 64 percent reported high levels of worry regarding sustainability matters, and consumers expressed a willingness to pay a premium of up to 12 percent for sustainable products.
In rapidly growing markets like India, Indonesia, Brazil, and China, where Bain’s research identified the highest levels of environmental concern, consumers said they would be more willing to pay a significant premium, from 15 and 20 percent. In contrast, consumers in the United Kingdom, Italy, Germany, and France are only willing to pay an additional 8 to 10 percent for sustainable products.
Meanwhile fashion resale app Vestiaire Collective’s second annual Impact Report, detailing findings of research conducted from October 2022 to January 2023, revealed 75 percent of consumers are embracing secondhand fashion as “more socially acceptable” today compared to five years ago. Over 3,500 app users were surveyed across eight countries, including France, UK, USA, Australia, and Hong Kong.
SEE ALSO: Vestiaire Collective founder Fanny Moizant on raising the bar for resale
AI continued to make its mark
In the realm of customer service, establishing a seamless support system is paramount for cultivating customer loyalty. With the rise of AI, brands have turned to chatbots and digital assistants as formidable tools to bolster their business resilience in this domain. These AI-powered solutions not only provide instant support today, but also contribute to cost reduction and enable the capture of valuable customer insights, revolutionising the customer service landscape. Companies are now integrating Gen AI into chatbots to elevate the customer experience, making it more immersive and frictionless. A Gartner survey revealed that nearly half of marketing leaders have already integrated Gen AI tools into their workflows, with another 43 percent planning to follow suit.
“The advent of Gen AI, combined with a robust verbal branding strategy, offers a remarkable opportunity for businesses to elevate their marketing effectiveness to new heights. By harnessing the capabilities of technology alongside human experience, a powerful synergy can be achieved, captivating audiences and forging authentic connections. While AI undoubtedly streamlines content creation, it is the human-centric strategy that truly breathes life into words, allowing brands to leave an indelible mark on their customers,” says Virginia Ngai, associate partner at Prophet.
Flexibility becomes the bar: Social commerce and omni-channel still to thrive
A key focus in the past year, as well as the one to come, for brands looking to regain footing after the pandemic, is locating their customers and identifying the most effective ways to engage with them.
By 2025, the e-commerce market in Southeast Asia is projected to surge beyond USD211 billion due to an influx of businesses entering the industry and existing players intensifying their competitiveness. In 2024, companies will allocate increased marketing budgets towards popular marketplaces like Tokopedia, Shopee, and Lazada, aiming to drive more sales, navigate price wars, and differentiate themselves from rivals on these platforms. As more marketplaces come to the fore, brands are looking to spread themselves across various channels to ensure optimum reach.
“In 2024, brands will double their focus on how they put their omnichannel practices into action. If not leveraging already, brands will focus on acquiring tools that support seamless product listings across channels, leverage quality digital assets to ensure customer retention, and focus on online-to-offline (O2O),” says Vaibhav Dabhade, founder and CEO, Anchanto.
“This will be critical for brands to offer a flexible yet consistent shopping experience to customers across all touchpoints. This strategic approach will solidify customer loyalty and enhance overall brand perception in a market where adaptability and a smooth shopping journey are paramount.”