The Retail Executive Summit is a conference held annually in Singapore designed for networking, knowledge exchange and staying ahead of retail developments. The 2023 edition highlighted how the retail landscape and consumer expectations in Southeast Asia have evolved post-pandemic. Customer preferences are shifting towards brands which provide unique experiences that are augmented by technology and offered seamlessly across physical and digital channels. Maintaining customer loyalty now involves offering value beyond price. Factors such as brand identity and offering an exemplary customer experience are equally critical.
Pandemic-driven changes elevate consumer expectations
COVID-19 has reshaped consumers’ expectations of retail in Southeast Asia. During the pandemic, many retailers established and invested heavily in their digital infrastructure, leading to increased competition in e-commerce.
Retail e-commerce in Southeast Asia has more than tripled since pre-pandemic, from USD36 billion in 2019 to USD110 billion in 2022
Source: Euromonitor International’s Passport Retail data
Now, consumers not only have greater choice across physical and digital channels, but also easy access to information for purchasing decisions.
Consumers are also now more comfortable utilising technology to facilitate purchasing decisions and engage with retailers and brands. This includes researching product features online, using AI and AR tools to virtually try-on products and get product recommendations, livestreaming and social commerce.
The focus is shifting towards tech-supported experiential retail that fosters loyalty
In the wake of the pandemic, experiential retail is taking centre stage as brands are positioning their retail stores as more than just a transactional destination, but one where consumers can engage with the brand and create products and experiences together. Skin Inc, a Singapore skin care brand, held an exclusive meet-and-greet with Jackson Wang (a K-Pop celebrity) at its ION Orchard concept store in December 2022. Customers who purchased the “Glow Just Like Magic” package at SGD1,288 received an individual photo opportunity, a concert ticket and merchandise, and an autographed album.
Such efforts aim to create customer loyalty, driving stickiness and recurring sales. Based on Euromonitor International’s Voice of the Consumer: Lifestyles Survey 2023, a significant proportion of Southeast Asian consumers indicated that they shop in stores which create engaging experiences, highlighting the importance of experiential retail in an increasingly competitive post-pandemic retail landscape.
Brands and retailers are also recognising the importance of articulating their values to build an emotional connection and loyalty. This aims to resonate the brand with the consumer and integrate it as part of their lifestyle and identity, once again going beyond merely a transactional relationship.
According to Euromonitor International’s Voice of the Consumer: Digital Survey 2022, the most important reasons consumers in Asia Pacific participated in loyalty or rewards programmes included receiving discounts, offers, or free products, and obtaining exclusive benefits, rewards or experiences.
Limited Edition, a Singapore-based boutique sneaker chain, runs a best-in-class loyalty programme. It not only offers Birthday Month and Members-only discounts, but also provides exclusive and early access to rare and coveted sneaker releases, and invitations to product launch events. While the membership’s high bar to entry of spending SGD1,500 may be a deterrent, which is precisely its allure in the value it provides in terms of privileges and stature, it confers its members as sneaker aficionados.
Technology is increasingly critical in enabling retail experiences and supporting consumer engagement across physical and digital channels.
80% of respondents see investing in new technologies as a strategic priority in the next one to five years for their organisation
Source: Euromonitor International’s Voice of the Industry: Retail Survey 2022
Retailers realise the importance of providing an optimal experience at every stage of the customer journey and are leveraging technology to support their cause. Notable use cases include AR/VR for virtual try-ons, livestreaming, and incorporating digital payment methods in-store and online. For example, e-commerce platform solutions provider, Shopline, offers live commerce capabilities and supports popular regional payment modes such as digital wallets, bank transfers and Buy Now Pay Later (BNPL) for their merchant partners in Southeast Asia.
Brands and retailers in Southeast Asia must adapt to meet consumers’ evolving expectations
The post-pandemic Southeast Asia retail landscape is competitive. Brands and retailers must adjust their strategies to maintain top-of-mind awareness and remain the preferred shopping destination of consumers. By incorporating elements of experiential retail and leveraging technology to improve the shopping experience across physical and digital channels, they will be well-prepared to cultivate customer loyalty, which will help them navigate the challenges ahead.
Read our article Top Consumer Trends That Will Change Retail In The Year Ahead for further analysis on the key drivers behind retail evolution globally in 2023.