China’s consumer spending was strong over the May Day holiday. In May, the total retail sales of consumer goods reached 3.8 trillion yuan, a year-on-year increase of 12.7%. Meanwhile, according to Sensormatic, the foot traffic to stores increased by 56.7% year-on-year, all but showing that consumers are returning to physical stores.
As we set sight on the second half of the year, it’s now time to plan. Here are the industry trends that retailers should be aware of:
1. Customer Experience Matters Even More Than Products
The COVID-19 pandemic forced us to stay at home more often than we wished over the past few years. Since the society returned to normal, consumers have been eager to reconnect with the physical world, and experience has become more important than ever. Businesses are adopting different solutions, including virtual reality, business intelligence, customer relationship management systems, or a combination of them all, for one common goal – enhance the customer experience.
A global survey found that nearly 60% of consumers expect retail spaces to be focused on experience rather than products by 2025.
To stay competitive, retailers need to transform their brick-and-mortar store into a place full of surprise. By creating a pleasant atmosphere in your space, the use of scent is a well proven means to not only increase customer satisfaction and purchase intentions, but also enhance the overall customer experience. ScentAir provides a variety of scent marketing solutions, allowing you to choose the right scent based on themes or seasons, adding a surprise factor to your place.
2. Consumers Demand Sustainable Practices
The acceleration of global warming, environmental pollution, and resource depletion have prompted consumers to reflect on the impact of their lifestyle, leading to the formation of new consumption habits.
Customers are now taking more interest in the values and responsibilities of companies. In particular, they want to know the environmental impacts and ethical practices of companies. Integrating sustainable practices into their workflow therefore becomes the focus of many retailers, as we have grown more familiar with the likes of green packaging, low-carbon production, recycling, second-hand economy, rent-for-sale and so on. As Deloitte forecasts, the success of a retail business will be likely to depend on the results of their sustainability initiatives.
Google searches for “ethical brands” increased 300% between 2019 and 2020, indicating a customer shift to sustainable brands was happening.
Today’s retailers must prioritize sustainability, and bring transparency of ethical practices to every aspect of business, including their choice of a sustainable scenting partner. As a global organization and the only scent marketing industry member of International Fragrance Association (IFRA), ScentAir is committed to capturing and delivering the essence of nature in a sustainable way. ScentAir fragrances meet all known global regulatory standards such as Occupational Safety and Health Administration (OSHA) and EU Reach, certificated and validated to be free of any toxins, known carcinogens or respiratory allergens and do not contribute to global greenhouse gas emissions from livestock management. With the introduction of quarterly cartridge shipping schedules and smart volume selection processes, ScentAir manages to reduce annually:
3. Pop-Up Stores Are Trending
Pop-up stores have become a desirable offline sales channel for brands to boost post-pandemic revenue. Opening a pop-up store can be high impact while simultaneously being cost effective; it also allows brands to take their products directly to consumers in a way that feels different, while time-limited offers can create a sense of urgency among consumers.
A Shopify survey found that nearly 1/3 of brands said they would be “establishing or expanding their use of pop-up and in-person experiences in the next year”.
Pop-up stores can be effective in creating noise, building brand awareness, and delivering the image of being fun. With a degree of uniqueness that is largely missing from traditional shops, pop-up stores offer an experience that feels new and exclusive. Even established brands can be more innovative with their pop-up store design and settings, and more experimental with the use of digital engagement and smart experience solutions, all combined to give consumers a unique experience and opportunities for photos. Leveraging the pop-up store advantages of being "unique", "time-limited", "exclusive" and "interactive", brands can match the season, marketing campaign or any desired message via the right fragrance. Not only can it provide surprises and inspiration to the curious visitors, but it can also build an emotional connection between visitors and brands, and thus enhances brand loyalty.
4. Private Labels Are Gaining Traction
The popularity of private labels has grown rapidly in recent years. According to research by Daymon and the Private Label Industry Research Institute (PLRI), "brand and product diversity" has topped the likes of “having more promotional activities”, “good delivery” and “attractive prices” to become the most important factor when consumers choose retailers. Since 98% of the brands being sold by retailers are similar, the offering of private labels has become vital for retailers to differentiate themselves from others and form a core competitive advantage.
Globally, sales of private brands are growing 12 times faster than fast-moving consumer goods. Retailers whose private brands perform well generally do better in the overall market. In China, consumers are embracing private labels, as their awareness has significantly increased in the past two years.
The proportion of consumers who understand the concept of private brands has increased from 74% in 2019 to 92% now. 50% of consumers can accurately name the brands.
Taking advantage of the trend that fragrance products are now popular among young people for enjoyment and self-expression, retailers should start developing their own branded fragrance products, which can not only increase product diversity, and thereby a new revenue stream, but also enhance brand image and brand loyalty. For more than 25 years, ScentAir has been helping renowned brands such as KOOKAI and Marriott Hotels curate signature scents and deliver unforgettable customer experience. The scents are so loved by their customers that it led to demands for turning them into merchandise, so they could take their favorite scent home.
Contact us today to start creating unique customer experiences!
References:
1. Mohit Malhotra (2022). Retail trends 2023: Social commerce, personalization, omnichannel shine. The Future of Commerce.
2. Josh Howarth (2023). Top 11 Retail Trends (2023 & 2024). Exploding Topics.
3. 2023年5月份社会消费品零售总额增长12.7%. 国家统计局.
4. 中国零售商自有品牌成长迅速. 中国商务新闻网.
5. “快闪”成零售新业态，预计2025年快闪店行业规模将超8000亿. 上游新聞.
