Ecommerce adoption continues to increase, with sales in the Asia Pacific region expected to rise 300 percent to US$2.6 trillion by 2020, according to Accenture.
The company said retailers and consumer packaged goods (CPG) companies must improve their understanding of the millennial generation in Asia, according with millennials set to dominate the consumer market in the region.
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Looking at the millennial generation in the region, Accenture analysis from a number of research reports including Accenture Adaptive Retail and the “The future is now: understanding the new Asian consumer” revealed the extent to which this group is set to dominate spending across the region.
This potential impact highlights the need for retailers and CPG companies to embrace digital solutions so they can achieve the connected and integrated shopping experience that millennials are seeking.
The opportunity is here and now
Millennials in Asia will have more spending power than any previous generation – estimated to be US$6 trillion in disposable income by 2020. Millennials represent more than 45 percent of Asia Pacific’s population, and 60 percent of the world’s millennials expected to live in Asia by 2020.
Retailers and CPG companies must improve their understanding of this tech-savvy, media-connected generation to capitalize on the huge opportunity and capture this powerful customer segment.
Speaking at the Accenture World of ME showcase at the Millennial 20/20 summit in Singapore, Teo Correia, senior managing director in Accenture’s Consumer Goods and Services practice, said, “Digital is transforming the industry globally by empowering customers with more choices, insights and control.”
According to Correia, millennials expect easy experiences tailored to their interests and lifestyles. They are more difficult to predict, increasingly segmented, and devoted to powerful brands and engaging shopping experiences.
“To win their loyalty, it is imperative for brands to keep it simple but make it personal using data-driven applications.”
Millennials are shopping on the go and demanding more
Today, Asia accounts for the largest number of smartphone users globally at over 50 per cent and consumers in the region are increasingly embracing digital technology and services as part of their everyday life.
Singapore and Australia have the highest smartphone penetration in APAC at over 80 percent. Meanwhile, millennials in the region spend an average of 2.8 hours per day (or 42.5 days per year) on their smartphones, and over 40 percent of millennials have shopped via their smartphone.
Accenture’s analysis suggests that millennials are more open to receiving advice than other customer segments. Retailers and CPG companies are trying to meet this generational need through personalization – but must ensure their methods are acceptable to consumers according to the consultants. For example, in China and Japan:
- Sixty per cent of millennials surveyed, compared to 47 per cent of consumers overall, are comfortable with giving retailers access to their information in exchange for more personalized experiences.
- In stores, 77 per cent of millennials approve of items being automatically discounted for loyalty points and discounts, yet only 37 per cent were interested in sales associates asking about their recent purchases.
- Sixty-one per cent of this group wants promotions sent to them online for items they are considering.
“We see successful brands ramping up their data and analytics capabilities to enable personalised customer experiences and pricing based on loyalty, purchase history, and demographics,” said Correia.
Correia said these brands increasingly utilise predictive analytics to provide personalised service offerings, and take advantage of location-based services to embed themselves within customer lifestyles.
“The key to success is communication with the customer on every level. The customer has to have a satisfying brand experience from the very beginning of the experience to the end.”
Even buying a car is a new experience
In an upcoming research report by Accenture on the automotive retail market, millennial car buyers indicate they are more likely to be seeking excellent customer experience than other groups.
In China millennials have a strong affinity to the carmaker’s flagship dealership, with 40 percent of millennials preferring this buying format. In addition, Accenture’s research has found that millennials want digital advice but at the same time seek personal interaction.
Finally, when buying a car, millennials don’t want to wait for their purchase once they have decided on a model to buy, with 87 percent of Chinese millennials ranking “immediate availability” of the desired model after configuration as important in the buying process.
Digital solutions for a digitally empowered generation
At the Millennial 20/20 summit, Accenture is staging The World of ME, a pop-up concept store of the near-future, which demonstrates some of the most innovative products, services and experiences in the consumer retail sector that Accenture believes will impact the Asia Pacific region.
It examines the evolving relationship between millennials and retailers, featuring start-ups from around the globe.
“The key challenge today is ‘digital innovation at speed’ and at Accenture, we believe that start-ups and big brands have something to admire in each other and to learn from each other,” said Correia.
“The pace of change has increased and in a world where new markets and services are created almost overnight, connecting and collaborating to enhance their operations, services and business to better serve their customers will separate winning retailers from the laggards.”