Renowned forecaster Chang outlines major shifts, trends affecting retailers
Retail 29/10/2024 Antoinette Panton
Did you know retail sales are estimated to represent close to 20% of South Africa’s GDP? Faced with a barrage of ever-changing micro and megatrends, it remains crucial that our local retail industry responds to shifting shopping patterns.
Dion Chang of Flux Trends, a local trends analysis company that distils, translates, and packages trend insights into business strategy, is a veritable doyen of culture and trends. Offering valuable insights into the latest movements, Chang breaks down the trends impacting the retail industry.
He believes ‘seamless service and user experiences, considered design and a high-value shopping experience can draw customers from their hermit states’. With the age of the ‘hermit consumer’ heralded by publications such as The Economist, consumers continue to turn inwards post-Covid, spending more time at home and acting accordingly – shopping online, ordering groceries for delivery and turning to social media for inspiration.
‘What they are shopping for is also affected by the hermit behaviour – it’s not just how they shop but also what they are now buying, such as products geared towards making the home environment more of a cocoon,’ Chang explains.
Renowned local destination, the V&A Waterfront, has noticed a slight drop in the frequency of shopping visitors, likely due to these general shifts in shopping habits and increased uptake on online grocery sales, reducing the daily or weekly shop in favour of monthly shopping visits. ‘However, when shoppers do visit,’ says Alex Kabalin, V&A Waterfront Retail Executive, ‘their spend per head has increased materially, which more than offsets the drop in frequency.’
Elevating the every day can keep consumers coming back in person. While a perennial concern for business owners, service excellence is necessary for drawing out hermit consumers. Brand loyalty is earned through exceptional service that raises the consumer experience, personalised rewards incentives, and classic convenience.
Considering recent visitor statistics, the V&A Waterfront still records a long visitor duration or ‘dwell time’ in the precinct – which Kabalin credits to the holistic nature of the space: ‘This is testament to the qualitative aspect of the neighbourhood as a pleasant, safe and enjoyable place beyond shopping as well as the significant amount of leisure attractions and activities on offer.’
According to Chang, generational shifts are showing up heavily in the retail sphere. ‘Tech-savvy shoppers are becoming centre stage, and demand is high for retail that seamlessly straddles online and offline spaces. This form of phygital integration sees the physical store meet the online in a way that caters to different generations’ unique needs and expectations,’ he says.
In 2024, successful retailers will be those that provide integrated experiences, such as buy-online-pickup-in-store and real-time inventory visibility across channels. Enhanced loyalty programmes and personalised marketing across these platforms will further strengthen customer engagement.
‘Livestreaming e-commerce is gaining traction in the retail landscape, merging entertainment with shopping in a dynamic, interactive format on social media platforms like TikTok,’ says Chang. This trend, popularised in markets like China, is gaining traction globally, allowing brands to showcase products in real time while engaging directly with users.
Brands are also moving more into the resale and rental space in what is being called the ‘re-commerce boom’. While e-commerce is not a new trend, Chang and other trend forecasters are seeing an accelerated industry-wide shift to second marketplaces and luxury goods rentals. Major brands are implementing their own B2C e-commerce initiatives, and third-party C2C marketplaces like Facebook Marketplace, Yaga, and Depop continue to draw users.
This recommerce trend also ties into general sustainability trends that continue to be a mainstream concern for consumers. By promoting circular economy principles, recommerce reduces waste and offers consumers access to high-quality products at lower prices, fostering a more sustainable and economically inclusive retail ecosystem.
This demand for more affordable retail directly results from worldwide cost-of-living crises, which Chang has seen affecting consumer behaviours locally and globally. ‘Pragmatism appears to be the overarching theme in retail at present,’ he says. ‘With the global economy taking major hits and geopolitical instability leaving consumers cautious and selective, consumers are considering the price tag of products more than ever. Tight budgets are a hard-hitting reality, shifting the retail landscape accordingly: cost is king.’ Price consciousness may force some consumers to opt for less expensive products regardless of whether they are sustainably produced.
Given his vast experience in trend forecasting and business strategy, Chang joined the V&A Waterfront Neighbourhood Awards judging panel. The newly launched awards celebrated the embodiment of retail excellence within the Waterfront precinct, honouring retailers that provide an unparalleled shopping experience that reflects modern consumers’ evolving needs and desires.
Award categories included the Digital Innovation Award (which celebrates the tenant who has demonstrated exceptional creativity, engagement, and effectiveness in the use of digital and social media platforms to connect with customers), the Inspired Visual Merchandising Award (which honours the tenant with the most visually appealing and effective store displays), and the Retail Service Excellence Award (awarded to the retailer who demonstrated exceptional customer service within their store). These accolades rewarded the critical tenets of retail and highlighted brands that effectively navigated the trends Chang outlined.
Tenants at the V&A Waterfront have continued to demonstrate successful navigation of the local and international retail trends landscape, earning the V&A Waterfront the status as the best mall in South Africa (based on the average rating and the number of reviews received) according to the latest Urban Studies Shopper Index (USSI).
For more information on Flux Trends, visit https://fluxtrends.com. For more information on the V&A Waterfront Neighbourhood Awards, visit https://www.waterfront.co.za/tenant-awards/