Thai Son Nguyen has spent the last 18 years building a world-class digital transformation and ecommerce service provider through SmartOSC.
As the new year begins, now is an ideal time to look at what trends are set to impact the next 12 months for retail businesses. As ever, changes in customer behavior will have a huge impact on all of us.
2025 is shaping up to be the year of the pragmatic consumer in the Asia-Pacific (APAC) region. The emergence of a new generation of pragmatic consumers is not merely changing the retail ecosystem but is reconstructing the DNA of market interactions.
Let’s take a look at what a pragmatic consumer is, why their time is now and how retail businesses can adapt.
Macro Pressure
When we say “pragmatic consumers,” we generally mean consumers who are more sensible and practical with their money. That means value has become a more important part of their purchase decisions.
What’s driving this focus on value? Well, as the saying goes, “It’s the economy, stupid.”
While the APAC economy is recovering from all the damage wrought by the COVID-19 pandemic, significant challenges remain.
First, inflationary pressure is still a big factor, with the region experiencing an inflation rate of 4.4% in 2024, per World Bank data. While this is down from 6.3% just two years ago, it’s still well above pre-COVID levels. In addition, the cost of living is rising across the region, another factor pushing consumers toward pragmatism.
Meet The Customers
So, what exactly defines these new pragmatic consumers? They’re not just penny-pinchers—they’re sophisticated, tech-enabled strategists who are reimagining how they interact with the marketplace.
At their core, these consumers are driven by three key characteristics that set them apart from previous generations:
• Intentionality: Every purchase is a calculated decision, not an impulse. They don’t just buy—they research, compare and evaluate. Quality and long-term value trump flashy marketing or brand prestige. These consumers are laser-focused on products that genuinely enhance their lifestyle and provide tangible benefits.
• Tech as a superpower: Smartphones and social media have transformed consumers into hyper-informed decision-makers. They crowdsource insights, read countless reviews and hunt down the best deals across multiple platforms. A purchase is no longer just a transaction, it’s the result of meticulous digital detective work.
• Selective spending: These consumers are cautious about unnecessary expenses, they’re not afraid to invest in categories that genuinely improve their quality of life. Travel, cutting-edge technology and home improvement? Absolutely. Luxury handbags or trendy but disposable fashion? Not so much.
This isn’t about being frugal, it’s about being smart. These consumers understand that value isn’t just about the lowest price but about the most intelligent allocation of their hard-earned money.
According to my company’s recent Retail Tech Forecast, these pragmatic consumers are rewriting the rules of retail engagement. They’re not just responding to the economic environment, they’re actively navigating it with remarkable sophistication.
As Rakesh Mani from PwC Malaysia puts it, consumers are becoming increasingly discerning. They’re comparing prices across channels, seeking out promotions and making deliberate choices about when and where to spend.
For retailers, this represents both a challenge and an opportunity. The old playbooks of marketing and sales are being rewritten, and those who can truly understand and cater to these pragmatic consumers will be the winners in the new retail landscape.
Next Steps
If consumers are becoming more pragmatic, how can retailers adapt to match these new needs and desires? The first step is to choose a direction to move toward.
Our report found that many APAC retailers are in a state of flux, with 49% still exploring long-term strategies as they prepare for 2025. More is lost by indecision than wrong decision, so while it’s important to prepare carefully, it’s time for retailers to decide on their strategies.
For retailers, the path forward is clear: adapt or risk obsolescence. To thrive in this new environment, retailers must embrace strategic approaches such as developing robust omnichannel experiences, implementing aggressive yet sustainable pricing strategies and focusing on providing genuine value that goes beyond mere discounting.
The key will be to move decisively and create a clear, targeted approach that speaks directly to the pragmatic consumer’s desire for intelligent, purposeful spending.
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