Retail in Asia

In Telligence

Shopping reinvented – the most influential megatrends

shopping

Shopping Reinvented – the most influential Megatrends set to shape the world through 2030 and was the fastest growing in terms of consumers’ propensity to spend within the trend – is one of the megatrends identified by Euromonitor International.

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This article explores this megatrend, talking about how consumers are now making purchases across many different platforms, and merchants must be prepared to engage with them anytime and anywhere, especially as buying habits shift from goods to services.

As consumer engagement evolves in lockstep with an increase in technology and shifting economic realities, shopping is constantly in a state of re-invention. It requires companies to identify and embrace new consumer habits while catering to those that still exist.

Megatrends Size based on Propensity of Consumers to Spend USD 2020- 2025, World

Source: Euromonitor International Megatrends Model, 2020

Which are the biggest markets for Shopping Reinvented?

The megatrend model provides a comprehensive framework to map the market potential for shopping reinvented across forty key countries. The model helps to identify whitespace opportunities in those countries, where elements of Shopping Reinvented such as experiential shopping, blended store formats, alternative models and emerging shopping interfaces are becoming essential for merchants.

Looking at the global ranking, the two biggest economies, US and China, were also the largest markets for Shopping Reinvented, followed by UK, Russia, South Korea and Japan. In contrast, Nigeria and Morocco were amongst the smallest markets in terms of consumers’ propensity to spend within the trend (among the forty countries included in this model).

Shopping Reinvented Size based on Propensity of Consumers to Spend in 2020, World

Source: Euromonitor International Megatrends Model, 2020

A per capita expenditure view as part of the model provides interesting insights. The COVID- 19 crisis gave a temporary preview of a world where consumers have turned to websites to shop instead of physical stores, used food delivery services instead of going out and travelled virtually rather than physically. As a result, e-commerce gains and online engagement saw exceptional growth.

If we take as an example the retailing industry, for instance, e-commerce global retail value sales recorded unprecedented growth of 29 percent in 2020, with e-commerce gains most pronounced in advanced digital markets such as UK, China, South Korea and the US. These markets already had a strong culture of online shopping, well-developed logistics and high levels of connectivity, meaning consumers experienced little friction increasing their online purchases as the pandemic made them hesitant to go to stores.

Three of these markets, namely the UK, South Korea and the US, also ranked in the top three in per capita spend for Shopping Reinvented in 2020, as e-commerce intermediaries, including marketplaces, delivery platforms, and social media and messaging services, played a particularly important role in consumers’ shopping journey.

How to capitalise on opportunities for Shopping Reinvented?

It is crucial for businesses to understand where the future opportunities for the shopping reinvented markets are, and how these opportunities vary by market.

Biggest market in 2025: Euromonitor’s Megatrends Model predicts a shift in the top five USD per capita spend ranking in the next four years, with China taking the global lead by 2025. China was already the biggest global market for Shopping Reinvented in terms of consumers’ propensity to spend within the trend in 2020, and with leading operators in the market like Alibaba, for instance, that perceives and continues to invest in the future of retail as the complete digitisation of all commerce, which the company simply refers to as “new retail”, the fact that China is expected to climb to the pole position in Shopping Reinvented per capita spend by 2025 is no surprise.

Biggest growth potential: In addition to China, India, Vietnam, Nigeria, Malaysia, Thailand, Indonesia, Philippines, Colombia and Egypt will form the ten fastest-growing markets between 2020 and 2025, although some growing strongly but from a low base.

Key drivers such as urban per capita population and consumer expenditure on services, for instance, are embedded in the model to include 2200 data points spanning across a 10 year period that measure key factors expected to play a role in reimaging consumers’ shopping behaviour.

Moving forward, technology will continue bridging the gap between online and offline experiences, and although on its own will no longer be enough, the physical aspect will remain vital, with more emphasis on entertainment, hospitality and community as well as shopping. Merchants need to spend more resources focusing on each and every touchpoint that consumers have with a brand. Succeeding will require more than just converting the cart.

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To reinvent the shopping experiences, it will be vital for merchants to create meaningful and long-lasting relationships with consumers that will help drive loyalty and establish product and service differentiation. The global pandemic has accelerated the Shopping Reinvented trend significantly and as it climbs to the number one position in terms of consumers’ propensity to spend within the trend by 2025, a new urgency for companies to address this megatrend and quantify opportunities in the space is created.