Retail in Asia


Driving the future of post-pandemic shopping for APAC supermarkets


From a continued rise in e-commerce to a global health crisis driving pronounced changes in where and how often consumers shop for food, here are the challenges and opportunities influencing how APAC supermarkets future-proof their operations.

Home to some of the most innovative technologies shaping our everyday lives, the Asia-Pacific region has long been at the forefront of the digital world. So, with advanced digital infrastructure in place and a growing number of consumers already familiar with the conveniences of online shopping, APAC supermarkets were in an advantageous position to quickly move many of their services online after COVID-19 forced a wave of lockdowns across the region, months before similar measures were needed in other areas of the globe.

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In fact, well before the first case of COVID-19 was confirmed in December 2019, online grocery in the Asia-Pacific region had been developing at a rapid pace. A 2019 report from IGD Asia forecasted that sales in the region’s top 12 markets would nearly triple — from $99 billion in sales to $295 billion — by 2023. Such growth was poised to make online the fastest-growing format in the region — four times the CAGR growth of the overall grocery retail market, and more than doubling its market share.

As more cities went into lockdown in the early months of 2020, the way people worked, lived, and shopped changed in immeasurable ways. A February 2021 survey conducted by GlobalData found that 72 percent of respondents were working from home during the first three months of 2021, and 32 percent had begun buying groceries online more often.

Zooming in a bit, that rise in online grocery shopping can also be attributed to the large lifestyle changes related to life under lockdown. With the majority of people forced to work from home, more consumers took an interest in cooking more meals in their own kitchens. And more than a year and a half later, this is increasingly becoming part of a permanent lifestyle given not only the tremendous convenience people enjoyed shopping online, but a host of other benefits for particularly savvy shoppers.

Case in point: GlobalData’s report found that while the majority of APAC respondents said convenience (73 percent) and saving time (67 percent) were the primary drivers of online shopping, a sizable number of people also said they were turning to online channels to tap into lower prices (48 percent) and a greater variety and choice of products (47 percent). As long as online grocery shopping continues to make life easier while also saving consumers money, we can expect the e-commerce penetration rate to climb.

online grocery
Source: Shutterstock

To meet customer demand, it is important to understand the ways shopper behaviours have evolved — from changes in consumer lifestyle trends accelerated by the pandemic to new digital shopping platforms that look to become the norm through 2021 and beyond.

Not only did more consumers become at-home chefs during the pandemic, but they also became more health-conscious. GlobalData’s research found that health and well-being were among the most influential factors for APAC consumers, with 86 percent of respondents saying they are at least somewhat influenced by how a product impacts their health and well-being when making a purchasing decision.

Against such large changes in consumer behaviour and mobility, it is not surprising that grocery retailers in Asia are shifting from hypermarkets and supermarkets to hyperlocal convenience stores that offer a wide range of services. In addition to lifestyle changes prompted by the pandemic, research from Euromonitor International found that this strategic shift is also the result of rapid urbanisation across major markets like China and a gradual rise in smaller households. For an increasing number of consumers, grocery shopping means less buying in large quantities (think: everything a family needs for a week) and a higher frequency of in-store top-up trips to get items as they are needed.

Improved digital engagement with consumers is going to be critical for long-term business success. Shoppers across the region are already far more likely to make purchases on their smartphones, but that trend is expected to deepen, with Forrester estimating that online retail sales in Asia will reach US$2 trillion by 2024, with as much as 85 percent of e-commerce transactions conducted on a smartphone. Compare that to the U.S. market, where only 43 percent of consumers are forecast to do the same.

But maintaining an omnichannel strategy will be increasingly difficult given the advent of new platforms consumers are using for their mobile shopping. From live-streamed video to new influencer platforms and official brand accounts on messaging apps like WeChat, grocery retailers across the Asia-Pacific region are going to have to keep an ear to the ground and see which channels to take advantage of — and for how long.

As more and more companies are prioritising digital transformation to achieve maximum efficiency and customer engagement, grocery retailers across the region are turning to new tech solutions. With a raft of innovative digital tools at play, retailers now hold the potential to create even greater personalised shopping experiences that meet their customers’ behaviours and preferences and gain the data and insights they need to improve the customer experience across every touchpoint.

Grocery retailers across the region are also showing they are digital savvy when it comes to bridging the gap between online and offline shopping experiences in a post-pandemic shopping world. The goal? To meet consumers’ demand to feel safe at every stage of the shopping journey.

Technology enables grocery retailers to bridge the gap between online and offline shopping experiences and to meet consumer’s demand to feel safe at every stage of the shopping journey.

Source: Shutterstock

In China, the food-delivery app Meituan Waimai started using autonomous vehicles to deliver orders to customers in Beijing, and Foodpanda partnered with 7-Eleven stores in Singapore, Malaysia, Taiwan, and the Philippines to give shoppers the ability to order nearly 1,000 items that could be delivered in 20 minutes. And in Japan, supermarket chain Life partnered with Amazon to deliver groceries in as little as two hours, while Aeon now offers a drive-through service at 70 of its stores.

With the advent of sensor-based tools such as refrigeration sensors and Bluetooth thermometers, supermarkets now have the ability to comprehensively monitor and manage every aspect of food safety across the product’s journey. These innovative cloud-based technologies also help minimise food waste and develop more sustainable operating practices.

Surprisingly, economic disruption brought about by COVID-19 did not lead to increased retail theft worldwide. However, 64 percent of retailers did say that organised retail crime is now a greater priority than it had been in the previous five years, and 53 percent said the same of internal theft. Therefore, Electronic Article Surveillance (EAS) systems and sensors are tools for consideration beyond the pandemic.

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New solutions to combat shrink include: Enhanced public view monitors (EPVMs) — eye-level deterrents that make shoppers and internal staff aware they are being monitored as they move through the store. Also emerging on the market are a host of sensor-based solutions (ranging from bottle-cap tags to safers and wraps for small items) that can add another level of theft protection while also delivering insights into the root causes of shrink to help prevent losses before they even happen.

The past 18 months have had a profound effect on how we live, work, and shop. And while supermarkets in the Asia-Pacific region have found new ways to bring a traditionally in-store experience online during a public health crisis, they’ve also discovered new opportunities to future-proof their businesses in an increasingly digital-first world.

For even more insights into how COVID-19 has impacted supermarkets across the Asia-Pacific region — including detailed breakdowns of new consumer behaviours and how grocery retailers are responding — check out our comprehensive Sensormatic Solutions Supermarket Report for APAC today.


About Sensormatic Solutions

Sensormatic Solutions helps retailers deliver frictionless personalised experiences by powering accurate decision-making across the enterprise. It makes connections and bridge gaps across retail enterprises to deliver critical, real-time insights into inventory, shoppers, associates and the retail environment. Sensormatic protects assets and people by helping to ensure a safe and secure environment throughout the entire customer journey.