We cannot deny that 2022 presents very important challenges for the retail sector globally and in our region. In the first place, the economic uncertainty –caused, first, by the pandemic and, later, by the war between Russia and Ukraine–, which has increased inflationary levels and destabilized supply chains around the world.
On the other hand, people born between 1996 and 2012 (known as “generation Z”), who today enter the labor market and as consumers for the retail sector, are climbing on the agenda issues of digitization, as well as social and environmental awareness , so the promotion of diversity, equity and inclusion is already a business necessity.
In addition, the relationship between companies and professionals is evolving rapidly, while each party seeks the best satisfaction of their needs: the competition for qualified talent is growing and is driving staff turnover to record levels; likewise, the use of robots and artificial intelligence in administrative automation is a reality in our market, which demands solutions for efficient management.
In the midst of this context, if we focus on the Mexican market, our surveys indicate that consumers currently feel safer when carrying out most of their daily activities, including going out to a store or a restaurant, but despite this, many continue to show some concern about returning to their workplaces, so that the preference for working from home, most of the week, remains high.
E-commerce penetration levels in Mexico remain high, especially among high-income consumers and young people; even some product categories have reached, in digital channels, sales numbers similar to those observed in other countries that, before the pandemic, were better positioned in this regard.
In these circumstances, what global trends in the retail sector are having a significant impact on our market in 2022? At Deloitte, we have identified the five most relevant:
- Generation Z starts spending: this implies the strengthening of the channels linked to social networks; as well as the redesign of the store experience, considering digital and inclusive interactions.
- Digital adoption in business and exploration of digital products/experiences and the metaverse: digital transformation is no longer limited to business processes, but also encompasses administrative/financial processes, supply chain and human resources. Likewise, new means of payment are being explored, including cryptocurrencies.
- The elimination of friction and greater agility in the shopping experience: cashierless stores (such as self-service checkouts and automated stores) are promoted and ultra-fast deliveries are made (in less than 15 minutes).
- Circular businesses: virtuous circles are prioritized, in which transparency and traceability become essential for the fulfillment of environmental promises; and growth opportunities are generated linked to businesses whose reuse and recycling are preferred by consumers (even a premium is paid for an appropriate strategy). At this point, the clothing resale market stands out, growing much faster than the traditional retail market.
- Synergies between retailers and other companies: In this way, differentiation is created in the market, attacking the biggest problems of our society, and seeking, among other issues, inclusion and alignment to a common purpose with customers.
All these aspects must be visible within any strategy that is developed to boost retail sales, since they not only contain the opportunity to consolidate in the current market, but also to leverage its future and make the most of it for the sector. .
By Manuel Ostos, Lead Partner of the Retail Sector of Deloitte Spanish Latin America.
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