23 September 2016

Young Singapore consumers value reliability, trust

HSBC study finds 94 per cent of local consumers aged 18-34 consider these qualities when shopping

By Chuang Peck Ming

The Business Times, Published 23 September 2016

The weak economy may be a key reason why shops in Singapore are empty of customers. Long-term factors may also be at work, according to a study by HSBC Bank.

These are driven by changing demographics and consumer behaviour, says the bank's report, Future of Consumer Demand.

And while the changes will present new opportunities to nimble retailers, they threaten many established operators still stuck in old ways of selling, according to the report. The latter would have to rethink their marketing strategies.

Based on a global survey of 90,000 consumers, including 500 in Singapore, one of the key findings in the report is that, more than most other markets, reliability and trust come first for consumers here - especially the younger ones - when choosing a brand.

Some 94 per cent of those in the 18-34 age group ticked trust and reliability as the most important considerations when making a purchase. The numbers are 88 per cent for those 35-54 and 85 per cent for those 55-and-older.

In advance markets, trust and reliability guide an average 63 per cent of the consumers in their shopping patterns.

"The fact that younger Singaporeans are seeking reliability and trustworthiness seems counter-intuitive and surprising, as these attributes are more likely to be associated with older consumers," says Steven Cranwell, head of commercial banking at HSBC Singapore. "This is an example of how consumer behaviour is changing rapidly, and businesses need to be alert to these changes so they can respond positively in order to sustain business growth."

More surprising is that Singaporean consumers, while stressing brand trust, are also among the most active online shoppers in the world.

More than half of Singaporeans (5-7 per cent) have bought goods or services online in the past month - the ninth largest in the world on a per capita basis, and the largest in Southeast Asia.

"At first glance, this research presents businesses with a dichotomy in that reliability and trust have historically been built on face-to-face interaction, but now that same connection needs to be developed through digital channels which many businesses would consider de-personalises the relationship," Mr Cranwell says.

This calls for a relook at brand trust and reliability in particular, how to build and deliver them in an increasingly online world.

The findings come in the wake of the Ministry of Trade and Industry's push last week for retailers to embrace ecommerce in order to stay relevant.

Minister for Trade and Industry (Industry) S Iswaran said they should "innovate, be bold in piloting new technology, redesign jobs and expand overseas through ecommerce".

The report also found that Singapore consumers, more so than consumers in advanced markets, are partial to brands with an ethical bent. Over 70 per cent of the consumers here, against an average 58 per cent in the West, go for such brands.

Mr Cranwell says: "The data seems to be debunking stereotypes of Singaporeans being brand-conscious consumers or that at least that support of ethical practices is starting to strike a chord. Either way, it is a clear signal for companies to reflect on their own practices."

Another finding of the report is that the divide between female and male consumer tastes in Singapore is blurring. Roughly the same number of women (94 per cent) and men (92 per cent) here agree that leisure is important.

"Questions that businesses should ask themselves are: how do we respond to the more homogeneous outlooks of men and women? Is there some middle ground in bridging the gender marketing strategies and making them more aligned?" Mr Cranwell says.

Understanding these shifts and recognizing what will influence consumers will be increasingly important, he says. And making sense of the answers will help retailers to successfully target an increasingly tech-savvy generation.


Source: Business Times Online © Singapore Press Holdings Limited. Permission required for reproduction.

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