📈#016: Why services consumption is fast dethroning physical goods

Navigating today's volatile market demands a constant need for fresh intelligence. Market Mosiac is your weekly briefing on the key consumer insights, economic forces, and competitive movements you need to stay ahead of the curve.

In this week's edition, we talk about the great unbundling driving the services consumption and redefining retail priorities. We then explore omnichannel's ascent as the new baseline for connected customer journeys and the uneven foot traffic recovery data, signalling the need to re-imagine in-store experiences.

Let's explore and dive into the insights together.

— Insights Team, Rwazi

Our Edition this week:

• Data Spotlight

• The Pulse

• Sector Scan

DATA SPOTLIGHT
Services overtake physical goods as retail calibrates for the new consumer

A shift is underway in retail as, for the first time, consumer spending on services like streaming, dining out, and experiences has surpassed expenditure on physical goods across many major markets. Our global data analysis found services now make up 52% of the average consumer wallet.

This remarkable services consumption shift is being driven by several powerful forces unleashed:

• Younger demographics are prioritising experiences over possessions

• The convenience premium of on-demand services like food/grocery delivery

• Rising costs deterring big-ticket discretionary purchases

Key Insight: Services' share of wallets will continue growing so fast, forcing retailers to adapt their business models, physical footprints, merchandising strategies, and consumer engagement from the ground up to match changing consumer priorities.

THE PULSE
Featured Chart: The fastest-growing services consumer market size in the world

SECTOR SCAN
Omnichannel's dominance

The convergence of physical and digital channels has become the norm rather than the exception. Analysis of curated data found that 73% now leverage multiple touchpoints to discover, compare, purchase, and receive products and services. 

Driving this omnichannel growing popularity are several key catalysts:

• Buy Online, Pickup In-Store (BOPIS) services merging the convenience of e-commerce with tactile shopping

• QR code deployments and app integrations like digital wallets bridging the physical-digital divide

This intensifies the demand for seamless, integrated customer experiences across all touchpoints - in-store, mobile, web, and social media.

Key Insight: Brands mastering omnichannel will gain an outsized share of consumers who prize convenience, personalisation and fluidity.

OUR COMPETITIVE WATCH
Amazon's ambition keeps rivals gasping

Just when you thought the e-commerce giant had depleted its retail disruption bag of tricks, Amazon unleashes another barrage of innovations, investments, and market incursions:  

• Just Walk Out cashierless checkout technology scaling rapidly

• Amazon Salon providing next-gen augmented hair services

• AWS IoT enhancing in-store personalization and inventory visibility

• Care Stores expanding into healthcare and telehealth

Key Insight: Complacency risks obsolescence. Players must match Amazon's restlessness in piloting new innovations to delight customers.

WHAT IS HAPPENING AT RWAZI?
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Thank you for reading and joining us on Market Mosaic this week. We hope this edition provides valuable, actionable insights for deciding with data. 📊 

You can read the more extended version of this newsletter edition with detailed insights here.