Generally speaking, retail is an extremely high-paced and competitive sector. Fueled by the pandemic, consumer trends are rapidly evolving with many adaptations spurred on by shifts in behavioural trends. So what are the 5 key trends currently influencing consumer behaviour and how are retailers evolving to meet these new demands?
1. Rapidly increasing costs
Prices are going one way, and it’s not down. In fact with the steadily increasing fuel and electricity costs, households are going to come under even more pressure as the cost of food and goods increases in the coming year. This is set to put a huge strain on South Africans with the average food basket cost growing by as much as 10,2% year on year. This will affect the way retailers build their product lines and how consumers will choose what they purchase. Necessities will take preference and the consumer will become even more careful with how, why and where they buy.
2. Online and in-store integration
Mobile apps are continuing to drive the way retailers do business. Now the race is on to integrate an in-store with online offerings. While South Africa lagged significantly behind in the past, the country’s retail sector is now catching up and coming into the digital age. This doesn’t mean that bricks and mortar stores will become obsolete, but rather, it means that physical stores will need to enhance their offering through all their online and digital channels. In this way, we are seeing many innovations with stores now offering a click-and-collect hybrid option, for example. This is just one way in which stores are evolving to meet the customer’s changing needs.
3. Sustainability and eco-focus
This continues to be a focus for consumers. In fact, a recent Mastercard study revealed that 98% of South Africans are keen on taking action to contribute to a shift in environmental issues. They are even willing to pay more for products that are more sustainable. A 2019 Consumer Sentiment in Retail Report by Deloitte illustrated that Millenials in particular were seeking out more sustainable products “with a conscience”. Meaning that now more than ever, it is very important that brands follow suit and are able to demonstrate sustainable practices.
4. Africa set to drive retail growth globally
The 2022 Economist Intelligence Unit’s Retail report found that “retailers are already looking to invest in African markets in order to reap the potential they may have ten or even 20 years down the line”. In fact, by 2030, the best 18 African cities combined income could boast a spending power of over $1,3tn. This potential will be unlocked with strong local partnerships and a deep understanding of the needs of the local market.
5. Snacking as a lifeline for consumers
You may be surprised to know that in a recent study - State of Snacking - 52% of adults worldwide felt that snacking was a “lifeline” during the pandemic. This is true of general times of uncertainty and so will linger while the world settles post-pandemic. This can be a useful nugget to know if you can offer people the right snack at the right time. By offering a wide variety of snacks, you can empower the consumer to make healthy informed decisions about their lifestyles.
The bottom line
Retailers are under pressure to adapt their operations and product lines in relation to a changing world and shifting consumer needs. While these changes require investment, with the right retail partner like Merchant Capital you can fund your retail store in under 48 hours and begin to bring your store into the future, ready to calm and satisfy your customer during times of change.