Ten Trends Driving Sales in China's Retail Industry

Young Chinese Shoppers Expect to Do Less Work to Get What They Want, Says Youth Researcher Mary Bergstrom

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Chinese youth are confident in making their choices without input from sales staff.
Chinese youth are confident in making their choices without input from sales staff.
SHANGHAI (AdAgeChina.com) -- With dozens of new shopping outlets popping up every day in China, competitors are almost literally edging each other off the street.

Mary Bergstrom
Mary Bergstrom
Consumers are clearly the beneficiaries. They are able to compare products, prices and services quickly--and there's plenty to compare. New brands continue to bombard the retail landscape.

The retail war is quickly moving into cyberspace. Shopping from the convenience and comfort of a computer, youth are able to shop on local, national and even international websites that increasingly cater to Chinese consumers.

Armed with a range of online experts and community opinions, e-commerce websites can access prices brick-and-mortar stores could never offer. The internet has created a new kind of shopper in China who expects to do less work to get what they want. Young people are no longer willing to be consumer pioneers, they are looking for shortcuts that assure them that the choice they are making is the right one.

Comparing priorities between 2008 and 2010, young people's commitment to quality hasn't shaken in the past two years. Although still price sensitive, youth view sub-standard merchandise as no bargain.

Retail tourism is losing ground as e-commerce rises.
Retail tourism is losing ground as e-commerce rises.
Can you blame them? After food scandals, fake alcohol at clubs, rumors of high PH levels in name brand clothing and other scandals, young people regularly question if what they are about to ingest/wear/support is out to get them.

Besides physical harm, youth also are keenly aware that socially, they need to steer clear of choices that would cause their social circle to question their integrity, how "authentic" they are. Just a couple of years ago, China trendsetters were tolerant of fakes--as long as they or their friends didn't support them--the "not in my closet" effect.

I usually shop at branded, chain stores so I am not worried about buying imitations. I can tell the quality of the materials myself and that is always my priority. I sometimes go shopping at little boutiques, looking for some special and rare shoes that are hard to find elsewhere. I will ask my friends who are experts on shoes to check if the products are good. If they are not, I will go back and ask for a refund. --Lee (male), 22, Ningbo

This year, price has replaced promotions as a key driver of sales, demonstrating youth's new preference for value for their money over a temporary thrill. Aligned with their preference for low prices, youth want to shop in a store that has performed well in the past and is more likely to meet their current needs. As a critical factor to enable efficient decision-making, the reputation of stores has become far more important.

Excellent and reliable treatment of customers is a big part of how brands deliver on (and earn) their reputations so it is no surprise that service maintained its spot at number four. Youth want to know that if they make a purchase, their leap of faith has a safety net--not ambiguous or wishy-washy promises.

I once bought a kitchen accessory from IKEA but when I brought it home, I noticed that the size was not right. I didn't have time to return to IKEA that month, but when I did return two months later, it was no problem. Because of my IKEA membership card, I was able to return it within three months without any problem. --Cynthia (female), 23, Shanghai

Beyond trust and efficiency, aesthetics, cleanliness and convenience are major factors that contribute to youth's appreciation of a retail environment.

In 2008, youth were willing to travel to check out a new shop, a trend I named retail tourism. In exchange for trekking across town, young shoppers would have the opportunity to learn more about brands and even cultures.

Today, youth have a good grasp on the landscape and have veered from being explorers to pragmatists. Captivated by the convenience, price and variety of information they can access online, youth are much less willing than before to invest time and effort into seeking out a shop.

In many cases, this means the importance and influence of salespeople is in free fall. More accustomed to shopping on their own from experiences in foreign stores such as Uniqlo, Zara and H&M as well as online, youth are confident in making their choices without input from sales staff.

I'm uncomfortable if shop assistants buzz around me recommending products all the time. --Tao (female), 24, Shanghai

Stores need to take stock in how they deliver on each of these priorities if they hope to compete with both their neighbors and the invasion of online vendors, both big and small. Today, that means mapping actual performance versus stated importance more than ever.

Mary Bergstrom is the founder of The Bergstrom Group, a consumer insights agency in Shanghai.

Credit: The Bergstrom Group

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