The Retailer Autumn Edition 2022

THE RE TA I L ER

1 0

HIDDEN GOLD AT THE END OF THE CROSS-BORDER RAINBOW

Chris Field Managing Editor Retail Connections

L uxury brands caught in a domestic demand downturn will have to look a lot further afield if they are to find new customers, says Retail Connections editor, Chris Field No one needs reminding of the cost-of-living crisis, its various causes or indeed its likely outcomes in terms of consumer confidence and spending. Retailers will have to look further afield for growth and they may be surprised to learn that in some sectors, in some countries, there is strong and growing demand. A survey of more than 14,000 consumers across 14 countries by cross border ecommerce specialist ESW, shows that the cross border market for luxury goods grew by 17% in the first half of 2022 as detailed in its recent Global Voices: Consumer Pulse 2022. While this level of growth may not be sustainable as the cost of living crisis hardens, ESW has identified five countries with fast cross border luxury goods demand - South Korea, Germany, Australia, Mexico and Canada. Canada and Mexico - as much as 22%. Key to taking advantage of this accelerated demand is an understanding of local behaviours and preferences. For instance, 73% of Australians enjoy the experience of shopping on the websites of brands they like while 64% believe they get better promotions if they shop with a brand direct, and 60% feel more connectedwhen they buy direct from a brand website. 85%, 71% and 78% respectively in Mexico.

The research also looks at what devices consumers favour in each territory with 83% and Mexicans choosing mobile, more than any other country but still the most popular channel in all five countries. When it comes to payment, there are some dramatic differences between countries, with Australians favouring PayPal (61%), while most other countries put credit card at the top, with the exception of Germany where credit only scores 31%. The much-heralded popularity of BuyNowPayLater (BNPL) inAustralia might be slipping – it is the third most favoured option at 28%. Retailers also need to know how consumers in each country are finding them. For instance, Germans rely primarily on stores to do product discovery (46%) while 68% of Mexicans rely on Facebook. YouTube and Instagram also feature strongly. When it comes to making purchasing decisions, 59% of Mexicans use social media to access product reviews and 41% use social media to find newproducts. All countries rely on asking friends, family, followers when making a purchase, led byMexico at 34%. South Korea Korea emerged more quickly from the pandemic than many other nations. As a result, while growth in the UK, looking at the gloomiest sources, is set to be around 0.4%, in South Korea, it will be 2.7% in 2022 and 2.5% in 2023, despite a drag from high inflation, according to the OECD , which adds that from early 2023, growth will pick up due to strong investment and exports. Statista adds that the luxury goods market in South Korea was US$18 bn in 2021, up from $14.9 bn in the previous year. In the same year, sales of foreign luxury goods increased dramatically. South Korea also had the second highest rate of cross-border online luxury goods purchasing at 36%, behind the leader, China (46%).

Australia.” ‘‘

Top fast-growing cross border markets South Korea, Germany, Mexico, Canada

Made with FlippingBook - Online Brochure Maker