changing consumer behaviours in a post covid-19 world · customer experience. experience is...

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Document Classification: KPMG Confidential

© 2020 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Hong Kong, China.

Changing Consumer Behaviours in a PostCovid-19 WorldTRConnect BriefingAnson BaileyHead of Consumer & Retail, ASPACKPMG China

5 May 2020

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The New Normal……Different Speeds

Berkshire Hathaway

disposes of USD50bn

airline stocks

Airlines +Airports

driving newtech +innovation -focus on Customer

AI / Data / 5G

85MDomestic tourist

trips in China..first 3 days of Golden week!(from May 1)

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Key Trends – from NRF 2020

People-CentricEmpowerment & Diversity

TrustBusiness reputation & purpose, sustainability

Customer ExperienceExperience is everything

Platforms & New business models

Commerce everywhere / anytime

Intelligent & Responsive Supply

Chain Available wherever,

whenever, however the customer wants.

Cooperation & Collaboration

Even competitors complement one another

Use and Not Just Retain Data

Responsibly & Ethically

Technological IntensityRetail needs to be “Tech”

to serve the “new customer”

Future of Retail

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Global case studiesThe 6 drivers of consumption will continue to shape consumer purchase decisions

—Value will remain an important driver in these times of economic uncertainty.

—Lack of an online proposition could be a hindrance.

Value

—Convenience will be a real winner for both online and in proximity shopping.

Convenience

—Experience will continue to be important but the nature of experience will need to evolve.

Experience

—A reduction of choice would reduce supply chain complexity and working capital exposurewhilst also addressing certain sustainability criteria.

Choice

—Ensuring the purpose of an organisation is in line with customers values and expectations will remain a pivotal factor.

Purpose

—Keeping consumers safe, both online and in physical stores will factor highly on shoppers agendas.

Privacy & Safety

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Current state of the marketThe pandemic is impacting the retail landscape in different ways

Pricing of consumer goods in Asia are holding steady

Increased demand for home and personal hygiene products – likely to sustain

Key retail trends in Asia

Increased demand for food products with longer shelf life

Accelerated the move towards a cashless society through contactless mobile payments

Demand for delivery has significantly increased; food delivery affected by hygiene concerns

Shift in consumer buying behavior as they may move more of their shopping to the ecommerce channel

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Cash flow managementSegments affected: Non-food retailers, F&B Restaurants

Last mile deliverySegments affected: Online retailers, Online marketplace

Business continuitySegments affected: Non-food retailers, F&B Restaurants

Changing consumer behaviorSegments affected: All retailers

Supply chain issuesSegments affected: All retail segments

Health, safety, wellness +hygiene standardsSegments affected: All retail segments

Current state of the marketIn the wake of the current situation, retail businesses are faced with several challenges

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Pleasing customers during a pandemic

Think ‘safe retailing’

Get closer to customers

Close that last mile

Improve digital channels

Deliver on your values

Source: Rene Vader, Global Head of Consumer & Retail https://www.linkedin.com/pulse/pleasing-customers-during-pandemic-rene-vader/?trackingId=lLPLA2VsTWCbAokhuj4c3g%3D%3D

https://www.linkedin.com/pulse/pleasing-customers-during-pandemic-rene-vader/?trackingId=lLPLA2VsTWCbAokhuj4c3g%3D%3D

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Chinese Consumers slowly returning……but it is a “new normal”

Ended lockdown but not travelling abroad

China GDP Q1* 6.8%

China Wholesale and Retail Q1*

17.8%

CNY Red Packetsyet to spend

SOCIAL RETAILING

LIVE STREAMING

*Source: National Bureau of Statistics of China

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Future Destinations in 2020

ChinaThe United States, which had been top of the list, has dropped out of the top ten entirely, following the outbreak!

1st

2nd

3rd

Thailand

Russia

Japan

US

International locations - Thailand was the destination Chinese travelers wanted to visit the most in 2020, followed by Russia and Japan

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Consumers are more

tech-savvythan before

Data analytics

is powering growth

Generation Z is driving change

Brands are striving towardstransparency

Smart cities are taking

shape

Digital Retail on the Rise

Source: KPMG Publication, Digital Retail on the Rise, 2019

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Cognitive expertadvisors

Quantum computing

Smart dust

Machine learning

Digital twin

Virtual assistants

Conversational user interfaces

Smart robots

Drones

Autonomous vehicles

Artificial General Intelligence

Augmented Data Discovery

Neuromorphic hardware

Blockchain

IoT platform

Software defined security

Edge computing

5G

Smartcity

Serverless PaaS

Augmented reality

Human augmentation

Volumetric displays

4D printing

Connected home

Nanotubeelectronics

Virtual reality

Brain Computer Interface

Cognitive computing

3D printing

Artificial intelligence

Impact

Transformational

High

Moderate

Digital platforms

Immersive experience

Emerging

Technology

Radar

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How can you compete in a

“Mobile First”

World?

765mMobile payment

Users in China

3.5bnSmartphoneusers in the

world

1.2bn/1bnAlipay / WeChat

users

400mInternet users

In ASEAN

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Platform Business Models

changing ownership of

assets vs access

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Online has Inflated Customers’ Expectations

UNLIMITEDSelection

INSTANTDelivery

TRANSPARENTPricing

EERILY ACCURATE

Personalization

FLEXIBLEPayments

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4 phases of response should be consideredGiven the way that consumers and markets are likely to develop it is important to consider a phased approach in your businesses…

New Reality(12-24 months)

Recovery(6-12 months)

Reaction (first 4-8 weeks)

Resilience(now)

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Investment in those new economy

companies continues to rise……

Rapid adoption ofdigital technologies

+social media+tribe marketing

Leap directly from cash to digitalpayments but needto find an answer to

cross-borderpayments

Data...data…datalow data costs

helping to supporton demand service

in ASPAC

Need for Regionale-fulfilment hubs+logistics infra!Major issue in

ASEAN

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You also need to ensure you have a

social goodagenda that

encompassespurpose

Emerging Technology like AI +Blockchain will

profoundly impact

supply chains

Data +Innovation

is critical to maintain long-term

competitiveness

Listen to your customers and follow them on their journey! They are demanding

more +moretransparency

from the brands they buy

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Consumers will still travel but in stages with

domestic travel leading the way! They will

still want expert guided choices, higher

engagement, personalization,

human touch, trusted relationships

+exceptional in-store

experiences!

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Download these reports

Anson BaileyPartner, Head of Consumer & Retail, ASPACHead of Technology, Media & Telecoms, Hong KongKPMG China

Tel: +852 2978 8969Email: [email protected]@kpmg.comwww.kpmg.com

mailto:[email protected]

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