After the impact of the Covid-19 pandemic, the retail industry in recent years has great potential and is gradually "transforming" to catch up with new trends of the digital age. Vietnam's retail market is considered a fertile land when witnessing the participation of many foreign investors. Large global retail corporations such as Central Retail (Thailand) and Aeon (Japan) have announced their investment levels or goals of increasing the number of shopping centers in Vietnam in the coming years.
Gen Z is the generation that grew up with the internet and accounts for nearly ⅓ of the working-age population in Vietnam today. The purchasing and consumption power of this group is extremely large. To compete in this fast-paced and vibrant market, retailers need to keep up with trends and build the right strategies and business models.
Let's take a look at the prominent trends and challenges in the retail industry below.
I. 4 trends in the next year of the retail industry
Expanding the sales channel is being focused on by businesses
The strongest trend today is to expand sales channels, bring sales activities to omnichannel and take advantage of the power of online sales channels. Global data from McKinsey shows that omnichannel shoppers shop 1.7 times more than single-channel shoppers.
Omnichannel is considered an effective business strategy in the 4.0 era. This model provides businesses with multiple ways to reach customers, increase engagement, and drive customer retention and brand sales.
According to a report by Aberdeen Group, companies with omnichannel customer engagement saw annual earnings increase by 9.5% year-over-year, and the figure only reached 3.4% for companies without have omnichannel customers.
It can be seen that with the Omnichannel model, both customers and retailers will benefit. Retailers need to plan to build a systematic and appropriate multi-channel sales strategy to grow and develop more sustainably in the digital transformation period.
Gen Z becomes the new shopping motivator
According to data from the General Statistics Office, the number of generation Z in 2025 is expected to contribute one-third of the working-age force in Vietnam. As the first generation to be raised and raised with the internet and digital technology, Gen Z is exposed to and spends more time online than previous generations.
According to the Consumer Culture report by 5WPR, Gen Z is willing to spend more to participate in exciting technology experiences that bring joy or help them improve their daily lives. Items prioritized by generation Z include electronics, technology, medicine and health. However, electronic and technology products are often expensive. Brands need to have appropriate strategies to prove that the product solves customer problems, convince and retain customers to shop and consume the product.
Shoppertainment is gradually becoming popular
Shoppers are gradually becoming digital consumers, shoppertainment is also a trend favored by users. The combination of shopping and entertainment brings novelty and uniqueness. There, customers not only buy online in the usual way but can interact directly with the seller. This helps them have an enjoyable, seamless, and boring experience.
Trends of shopping combined with entertainment bring an enjoyable shopping experience
TikTok Shop is currently the top 3 largest e-commerce platform and also the platform leading the shoppertainment trend in Vietnam market. The revenue report of TikTok Shop from January 2022 to November 2022, the number has reached 1698 billion, 13 million products have been sold and 32,000 sellers have generated orders.
The impact of the pandemic has caused the market to witness the rapid decline of the traditional commerce model and the rise of the e-commerce model instead. Today's consumers want more than just a typical shopping experience. To compete in the market, retailers need to change constantly to keep up with the needs and tastes of consumers. Shoppertainment is one of the changes that retailers should aim for.
Using technology to drive growth
In the era of 4.0 technology development, operational improvement is one of the trends that need to be considered and taken seriously. Retailers need to apply technology to their business's sales and marketing activities, promoting sales channels. This will be the brand's powerful arm in supporting making appropriate and effective strategic decisions.
According to a survey by Digital Commerce 360 at the end of 2022, 76% retailers surveyed said they plan to increase investment in technology to attract new customers and retain loyal customers in 2023. Technology inside Besides supporting the growth of retailers, it also helps save time, costs and effort, helping to optimize the efficiency of business operations.
Many reports show that consumers are spending more and more time on digital devices. Brands have since then tended to transform their business strategies with the support of technology to help increase the connection between online and offline sales channels and customers. Figures from the MMA MarTech Maturity Survey in 2022 show that 87% businesses say they will increase their costs to Martech in the next 5 years. 32% uses Martech to measure revenue and profits.
Applying technology to retail is an inevitable trend in the 4.0 digital era. In order not to be left behind in the midst of the ever-evolving competition and development of the modern economy, retailers need to quickly digitize their operations and have a clear strategy for effective implementation.
II. 3 challenges retailers face
Customers expect a seamless omnichannel experience
Besides developing into a trend, omnichannel omnichannel selling is considered a challenge that is not "easy" for retailers. When retailers sell through multiple channels, the first thing they need to do is create alignment and consolidation between channels.
Customers may appreciate the flexibility of the brand's omnichannel interaction, as they can find the brand's products anywhere. However, they can leave at any time if those interactions do not bring them uniformity and convenience. When switching between online and offline experiences, customers not only want the same products but also demand seamlessness in the experience.
Implement customer loyalty programs that integrate the application of technology to help collect data from customers, and use that data to promptly provide appropriate content and incentives to each customer. , providing them with the ultimate personalized experience.
Maintain customer loyalty
In the era of technology and digitalization, customers are easily distracted by a huge amount of uncertainty. The level of competition is increasingly fierce as consumers now have thousands of other attractive options compared to your product/service.
Research has shown that the cost of retaining a customer is 5 times cheaper than the cost of acquiring a new customer. However, a common mistake retailers make today is to think that they can easily replace a new customer with a customer who has left.
While special offers and promotions are still important to customer retention, personalization is key to delivering a great experience for them. To acquire loyal customers, retailers need to use personalized approaches and interactions, providing content that matches their needs and desires.
Personalization is the key to delivering a great customer experience
Choose the right technology solution for your business
A technology solution that supports your business activities, automates tasks, contributes to simplifying processes and saving costs? That sounds great. But among the countless software options, which is the right tool for your business?
Every business will encounter a unique problem, sometimes you may choose the wrong solution for your problem. Be wise in choosing a comprehensive solution with many features to help retailers manage their systems and business operations better. Businesses need to carefully consider their needs to make the most reasonable choice.
Thuy Ngoc (compiled from many sources)
