Although the global retail landscape remains solidly tilted towards the largest players, evolving shopping behaviours continue to compel retailers to rethink their business models. This briefing spotlights the strategies that retailers are adopting to meet consumers’ evolving expectations in the post-COVID-19 area. It also explores pricing strategies adopted in response to the inflationary crisis, as well as the trends set to reshape the global retail landscape over the next five years.
This report comes in PPT.
The ongoing inflationary crisis is having a knock-on effect on consumer loyalty, as rising price sensitivity shifts demand towards more value-focused retailers. For online retailers, the situation is worsened by consumers’ returning to pre-pandemic shopping behaviours, which translates to less time spent online. In response, more operators are adopting aggressive pricing strategies, with payment models like buy-now-pay-later (BNPL) gaining momentum.
The retail landscape remains relatively consolidated, since the largest players benefit from strong brand equity, extensive network coverage and long-standing relationships with suppliers. This state of affairs is reinforced by current economic constraints, which are encouraging retailers to take a more cautious approach to expansionary investment. Nevertheless, some companies continue to pursue strategic mergers and acquisitions in a bid for greater scale.
The combined effects of rising climate change awareness and high energy prices are prompting more retailers to accelerate the implementation of their long-term sustainable goals. In parallel, even as re-commerce continues to gain traction across developed markets, the expansion of second-hand landfill wastes across emerging markets is increasingly raising environmental concerns.
To remain competitive, retailers looking to retain an edge over the forecast period will need to re-invent their engagement with consumers, rethink traditional business models and incorporate technology at every layer of their operations to improve their efficiency.
Retail is the sale of new and used goods to consumers from a business for personal or household consumption from retail outlets, kiosks, market stalls, vending, direct selling and e-commerce. Retail is the aggregation of Retail Offline and Retail E-Commerce. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts. Also excludes fuel sales, foodservice sales, rental transactions, and wholesale sales (e.g. Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retail also excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, i.e. retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer that is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retail.
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