Seamless retail dominates Asia-Pacific retail sector transformation

The emergence of seamless retail in the Asia-Pacific region has propelled digital transformation, resulting in significant advancements within the sector. A new report by KPMG Asia Pacific and GS1, titled "Navigating the Future of Seamless Commerce in Asia Pacific: How Retailers are Driving Customer Experience, From Technology to Sustainability," has assessed how retailers in the region are embracing these strategies to enhance customer experiences. The report underscores that seamless retail capabilities, once a standout feature, have now become a baseline expectation for consumers across various markets.

Seamless retail involves integrating the customer journey across multiple platforms and services, creating a unified experience for consumers. This integration extends to social media, delivery innovations, mobile applications, websites, automated messaging, and traditional brick-and-mortar stores. According to the report, businesses must place consumers first by adopting these integrated capabilities throughout their entire operations to remain competitive and lead the market.

About 7,000 individuals were surveyed across 14 markets in the Asia-Pacific region, including China, Hong Kong SAR, Taiwan, Australia, New Zealand, India, Japan, South Korea, Singapore, Malaysia, Thailand, Indonesia, the Philippines, and Vietnam. Additionally, interviews with senior executives from market-leading retailers, brands, and e-commerce platforms further informed the study’s findings.

Anson Bailey, Head of Consumer & Retail for KPMG in Asia Pacific, highlights that adopting seamless, connected capabilities across organisations is not merely an edge but a necessity for market leadership. "Navigating the Future of Seamless Commerce" aims to identify opportunities and spur innovation, enabling businesses to develop more successful customer experiences and journey maps.

The report outlines six key trends currently transforming the retail industry:

1. Remarkable diversity: Intense competition among platform players exists due to the absence of a dominant e-commerce platform in the region. Consumers prioritise a wide variety of products and fast, reliable delivery when choosing platforms.
2. Gen Z at the forefront: Social commerce is increasingly popular among Gen Z, influenced by the fast-paced nature of platforms like TikTok. This trend affects purchasing behaviours and forces brands to reassess their supply chain strategies.
3. Retailers embracing AI: Artificial intelligence applications are primarily enhancing product recommendation relevance and accuracy. However, consumer concerns about privacy and the lack of human interaction remain present.
4. Digital payments: The prevalence of digital payments varies across markets. E-wallets are gaining traction in Southeast Asia, while debit/credit cards remain preferred in more developed countries such as Australia, New Zealand, Singapore, and South Korea. In China, Alipay is the leading payment method.
5. Loyalty programs: Effective direct-to-consumer strategies rely heavily on data. Retailers, including those historically less reliant on loyalty programs, now recognise their value for data collection.
6. Sustainability as a baseline: Current generations demand brands address sustainability authentically. The future of commerce involves integrating diversity, ethics, and social responsibility into operations. ESG reporting and product transparency are becoming central to business practices, with brands expected to articulate and follow through on sustainability commitments transparently.

Patrik Jonasson, Senior Director of Global Retail at GS1, emphasised the increasing importance of supply chain transparency, especially for Millennials and Gen Z consumers. Authenticity and demonstrable actions regarding sustainability are essential for these consumers. Companies must ensure their ESG reporting processes can seamlessly exchange trusted information across global supply chains.

The report acknowledges a general growth trend in the retail economy across Asia-Pacific, approaching pre-pandemic levels. However, consumer expenditure is expected to decelerate this year due to rising costs impacting consumer sentiment. Consequently, retailers must strategically engage consumers to gain market share amid recalibrated spending behaviours.