Tag: eMarketer

  • China will flood US with its product

    China will flood US with its product

    Turnover in the Chinese retail industry will eclipse that of the US later this year, according to analyses. “Nothing is going to stop them,” said one commentator as new data emerged showing a fast-narrowing gap between the two markets. The fact China would overtake the US was never in doubt – China’s population of 1.4 billion is vastly more than the US population of 325 million.

    According to data from eMarketer, total Chinese retail sales will grow 7.5 per cent this year to reach US$5.636 trillion. But growth in the US is likely to be significantly slower at just 3.3 per cent, reaching $5.529 trillion.

    Not even the slowdown in China’s economic growth is likely to affect the figures – a rebound may even hasten the milestone.

    GlobalData Retail MD Neil Saunders says a big factor in the speed of China’s retail growth is the way the industry has evolved. In the US, retailers were established well before the advent of the internet meaning adapting to the new online environment has meant managing their brick-and-mortar stores while pursuing growth online.

    But in the US, the market began to mature in an online world, and online spending there will account for more than 30 per cent of total retail sales this year. In the US, online is predicted to account for less than 11 per cent.

    “The US retail environment grew up in a very different era,” says Saunders. “It grew up before the internet. There is a historical difference and an evolutionary difference, which has created this very different backdrop to retail.”

    The rapid rise of the Chinese retail industry has been fuelled by rising incomes across the country, the urbanisation of the population and a burgeoning middle class.

  • Time for travel agents to embrace “true retail”

    Time for travel agents to embrace “true retail”

    A recent report by eMarketer predicts that by 2021, Asia Pacific consumers will spend $3.001 trillion online, and ecommerce will make up 25.4% of total retail sales. Whilst this hasn’t been the death knell for bricks and mortar, it has forced retailers to re-think how to use their physical stores.

    Apple was one of the first to pioneer using their real estate as a way to drive brand ‘experience’ as much as sales.

    With their open-plan design, army of knowledgeable staff and regular, in-store seminars, Apple’s stores inspire and educate customers, helping the company achieve long-term loyalty.

    The fashion sector has been quick to follow suit too, adopting a range of technologies to transform how their stores are used by customers – recent innovations include ‘live’ mirrors that suggest matching items as the customer enters the dressing room and geo-targeted apps that alert shoppers to discounts and in-store promotions when they walk past.

    By comparison, APAC’s travel agents have been slower to spruce up their bricks and mortar models.

    However, with mobile travel sales accounting for 50% of online travel sales, and the number of online travel sales is only set to rise as more digital natives reach adulthood, now is the time for them to start.

    Rather than being a burden, when done right this is an opportunity for travel retailers to diversify; improve their success in cross- and up-selling; and engage the next generation of travelers who want very different things from the booking experience than their parents and grandparents.

    A good example is global travel group, TUI Travel.

    With a third of their sales still taking place in their physical stores, the company noticed that their customers’ purchase journey was becoming increasingly non-linear and multi-channel.

    In response, they piloted the use of in-store touch screens in the UK to enhance their customers’ store experience and invested in integrating their physical and digital channels for seamless shopping.

    By doing so, they were able to optimize interaction at every touchpoint, resulting in an overall increase in sales and average spend tripling in the stores that introduced interactive technologies.

    On the back of this success, they have since rolled these changes out in a number of their other physical stores too.

    Welcome to ‘true retail’

    ‘True retail’ is the notion of taking a 360-degree view of the customer, thinking beyond just the point of sale to consider all other brand touchpoints – from early inspiration to aftercare – and channels, whether they are in-store, on mobile, online or, as is increasingly the case, a combination of all three.

    ‘Inspiration’ is one of the biggest, and as yet largely untapped, opportunities for travel retailers to differentiate themselves by setting up their physical stores differently.

    Following the Apple model, store design is a good place to start – iPads loaded with relevant travel content, interactive displays and AI technologies can all be used to create a fun environment where customers can browse without sales pressure.

    The key is for travel agents to focus on the customer experience first and foremost – to create a space where people actively want to visit as part of their holiday planning.

    Automate the predictable to invest in the exceptional

    Another big, in-store asset for ‘inspiration’ is a travel agent’s staff.

    The more time that they can spend talking to customers, and the more knowledgeable and passionate they are about travel, the better.

    Historically in-store staff at travel agents were stuck behind their screens due to cumbersome systems and back-end processes.

    However, with the right technology, a lot of this can now be automated, giving staff the information they need at the touch of a button and in turn freeing up their time to walk the floor and focus entirely on customer service.

    Make it multi-channel

    Embracing ‘true retail’ also means acknowledging that there is no longer a single, linear purchase journey for travel bookings.

    Just as some customers will come into store to make a purchase having already done a lot of research online, others may prefer to get in-store inspiration then buy at a later date, through another channel.

    Retail travel agents need to ensure that they don’t lose this second group of shoppers to their competitors by continuing to follow-up with highly-tailored content, to whatever channels the customer prefers, after they’ve left the store.

    ‘Personalization’ and ‘relevance’ are essential to doing this successfully, so travel agents should use data capture across all of their touchpoints to build up a detailed, single-customer-view that is drawn from real behavioral insights rather than demographic assumptions.

    Applied in the right way, this intelligence can also be used to inform more tailored cross- and up-selling, with a much higher chance of conversion.

    Aftercare

    Finally, taking a truly 360 view of customer needs means keeping channels of communication open long after the sale itself.

    Successful fashion retailers do this well through convenient returns processes on online orders and hyper-relevant ‘you might also be interested in…’ content, designed to inspire the next purchase.

    This is an equally important opportunity that travel retailers shouldn’t ignore.

    In short, travel agents should have a post-purchase strategy for every customer, the more tailored the better.

    For best results, this should go way beyond the immediate post-sale window and should incorporate practical on- and even post-trip value-add services too, such as delay notifications, visa information, and discounts on services at the destination.

    Ultimately, traveler expectations are changing, which means retail travel agents today need to think beyond the booking.

    This will require a significant mindset shift for some, but also promises big rewards, and future-proofed customer loyalty, for those that get it right.

  • Middle class driving Chinese cross-border e-commerce

    Middle class driving Chinese cross-border e-commerce

    A growing middle class in China that likes shopping for foreign brands is helping drive cross-border e-commerce spending, according to a forecast by research company eMarketer.

    However, it warns of a growth slowdown ahead.

    Total cross-border e-commerce sales in China are expected to reach US$100 billion by the end of this year, with the average buyer spend of $882. This average has increased since eMarketer’s previous forecast thanks to a growing awareness in China of overseas brands, as well as improved logistics and the perception that foreign goods are of better quality.

    Also contributing to the growth is the popularity of JD Worldwide, Kaola and Tmall Global, sites that have made it easier for shoppers to access overseas products, says the eMarketer report.

    It also notes that 23 per cent of digital buyers in China will make at least one cross-border purchase, but growth in these purchases will start to slow as preference switches to local brands for some categories, such as fashion. Realising the demand for better-quality goods, Chinese brands are starting to adapt, says the report.

    However, eMarketer senior forecasting analyst Shelleen Shum says that with shopping sites adding more brands and improving cross-border logistics and processing times, foreign brands still have an opportunity to tap into the demand for high-quality products, especially in categories like baby, maternity, health and beauty.

  • China to ‘completely dominate’ global eCommerce

    China to ‘completely dominate’ global eCommerce

    In the retailing business, it’s fairly common knowledge that China is home to the world’s most prolific online shoppers.

    Last year almost 419 million mainlanders made purchases via the web, more than any other country.  And they spent more online than consumers elsewhere by a wide margin (US$672 billion, nearly twice the total US online spending in 2015).

    If these facts suggest to you that eCommerce in China has matured and growth is running out of steam as the country’s economy slows, think again. China retail consumption in general continues to increase briskly and online shopping in particular continues to boom. Analysts reckon this is due to a combination of potent demographic and cultural trends that show no signs of abating: the growing spending power of upper middle class and affluent households; the coming of age of a generation of college-educated consumers; rising aspirations among hundreds of millions of people in China’s less-developed cities and rural areas; a powerful shift away from shopping at brick-and-mortar stores to mobile eCommerce driven by widespread smartphone adoption.

    Will China still be on top at the close of the decade? A recent forecast on global eCommerce sales through 2019 by independent research firm eMarketer says yes, emphatically so. Below, charts adapted from eMarketer’s report show how the country is set to become an even more dominant eCommerce force in coming years.

    In 2019, China will spend more online than any other country: nearly $2 trillion, more than 3.6 times as much as the US.

    Retail_E-comm_Sales_worldwide

    China will also have the most online shoppers.

    e-shoppers Worldwide, by country

    Yet only half of China’s population will be shopping online in four years, leaving room for more growth (it’s a very big market).

    E-Shop_Penetration_Selected_Countries

    In 2019, one out of every three of China’s retail dollars will be spent online, the highest ratio in the world.

    Retail_e-Comm_Sales_percent_total

    Still, online sales will continue to grow, and at a world-beating rate.

    Retail_Ecomm_Sales_Growth_Leaders

    Looking at eCommerce as a global market, China will account for the largest share of worldwide online shoppers in 2019. By far.

    Countries_Largest_Share_E-shoppers

    And 55 cents of every dollar spent online around the world will come from a Chinese consumer. That’s dominance.