Insyte Weekly: How Gen Zs are changing tourism, latest fashion industry trends, grocery retail profitability and More

This was an interesting week in the business world. In this issue, you will get the breakdown of how tech is disrupting fashion and finance, how the US Grocery retail industry is fairing, and the latest tourism trends. Here’s a breakdown of some of the week’s top stories.

Media & Entertainment

Jordan Schlachter shared some insights from The Play Attention report. The "Play Attention: Calling Focus to Gaming" study, a collaboration between Activision Blizzard Media, Dentsu Media US, and industry peers, explores the effectiveness of advertising within gaming environments. Using innovative eye-tracking technology developed with Lumen, the study quantifies gamer attention and reveals that gaming settings offer higher viewability and engagement rates compared to traditional benchmarks. Rewarded video ads, which incentivize gamers with in-game rewards, emerged as particularly effective, boasting a 100% on-screen impression rate and high levels of attentive engagement. The study advocates for integrating ads seamlessly into the gaming experience to enhance rather than disrupt it, emphasizing authenticity and alignment with gaming content and communities. These insights underscore a shift toward more immersive and respectful advertising strategies within gaming, aiming to foster meaningful connections with the expansive and engaged gaming audience worldwide.

Fashion

Technology is drastically changing the fashion industry. As reported by Apparel Resources, Anthropics Technology's AI-powered virtual try-on brand, Zyler, has received the 'Best Use of Augmented or Virtual Reality' award at the Retail Systems annual event in London. Zyler was also a finalist in categories such as ‘Customer Experience Innovation of the Year,’ ‘E-commerce Solution of the Year,’ and ‘Most Disruptive Retail Technology.’ This award acknowledges Zyler's significant impact on enhancing online shopping experiences in the fashion industry. Launched in autumn 2022, Zyler allows customers to visualize how clothes will look on them before purchasing. John Lewis implemented Zyler for its fashion rental service last summer, resulting in over 30% of sales on its Fashion Rental site being attributed to the tool by October.

Furthermore, the newly launched app Radar aims to revolutionize online fashion shopping by providing a streamlined solution for saving and organizing favourite fashion finds while tracking prices across all online retailers. Users can add items to a personal wishlist, ensuring they get the best price by receiving alerts for price reductions. Founded by Emily Gaunt, Radar's mission is to make online shopping smarter and fairer for everyone, supporting both major retailers and small independents. The platform promises an impartial and transparent shopping experience, creating an efficient path to purchase that benefits the entire fashion industry.

Fintech

Tim Smith and Tom Matsuda shared how AI could disrupt the fintech industry: Fintechs use AI for regulatory compliance, such as Know Your Customer (KYC) and Anti Money Laundering (AML), to combat fraud. Companies like ComplyAdvantage, Resistant AI, and Tunic Pay leverage AI to identify high-risk customers and protect against fraud. Additionally, Dutch digital bank Bunq uses AI to create synthetic data to anticipate and counter new fraud techniques. AI also aids in credit decision-making, as seen with Paris-based lending platform Defacto, and improves ID verification processes and customer experience, as explored by Nvidia. Bunq's in-app personal assistant, powered by AI, helps customers manage their finances. However, some experts, like Alexandra Rivas-Gale from ClearBank, caution against rushing AI adoption in sensitive financial areas, advocating for a measured approach to ensure quality and reliability.

Tourism

As reported by Obinna Emelike, West Africa has the potential to lead the continent in tourism arrivals and earnings due to its rich cultural heritage, diverse landscapes, and extensive coastline, according to tour operators at the Accra Weizo travel expo in Accra, Ghana. Panellists, including Nana Basoah Boakye of BT Travel and Tours Ghana and Shalom Asuquo of Travelab Nigeria, highlighted the need for increased collaboration and healthy competition among ECOWAS countries to enhance tourism. They emphasized that mutual partnerships and improved service quality are crucial for attracting more tourists. Additionally, they called for government support to reduce travel barriers and provide incentives for the tourism sector. The panellists agreed to start with promoting travel within the Nigeria-Benin Republic-Togo-Ghana corridor and urged for policies that boost tourism, create jobs, and strengthen the regional economy.

An article by the Kenya Association of Travel Agents (KATA), highlighted how Gen Zs are influencing the tourism industry. Chaiwat Tamthai, director of the Tourism Authority of Thailand in Dubai, emphasizes that this generation, having grown up during significant global changes, seeks travel experiences that align with their values, particularly sustainability and authenticity. Gen Z travellers show a strong preference for eco-friendly tourism options, with a notable increase in demand for sustainable travel and accommodations, as seen in South Africa. They are drawn to authentic cultural experiences, often choosing homestays and community-based tourism over traditional tourist spots. Digital technology plays a crucial role in their travel decisions, with heavy reliance on social media for inspiration and peer reviews. Additionally, Gen Z prioritizes holistic wellness, seeking travel experiences that promote physical, mental, and spiritual well-being. This trend, accelerated by the pandemic, suggests a growing mainstream interest in wellness tourism, including specialized spa retreats and wellness programs.

Zama Cele shared some key findings from Mastercard’s Travel Trends 2024 report. The report highlights how growing digitalization is enhancing convenience for tourists in sub-Saharan Africa. The report indicates that the rapid adoption of digital payments has reduced the region's reliance on cash, with ATM withdrawals by tourists dropping to a record low in 2024, about 10 percentage points lower than in 2019. Domestically, mobile money payments dominate, while travellers increasingly use cards for payments. The report also reveals three key trends: record-breaking travel with international arrivals surpassing pre-pandemic levels; extended stays in South Africa with tourists adding nearly two extra days to their trips; and a shift towards spending on experiences over material goods, with experiences accounting for 12% of tourism sales, driven by events such as concerts and sporting events. These trends reflect a significant transformation in tourism dynamics driven by digital payment adoption and a focus on meaningful travel experiences.

In line with the UN’s recent support of Africa’s tourism industry, it announced it will host the second Regional Conference on Brand Africa in Livingstone, Zambia, on July 22. This event aims to foster collaboration and unlock investment and growth potential across the continent, amplifying the voice of "Brand Africa." The conference will gather sector leaders, including Member States, civil society, business, and private sector representatives, to set the strategic direction for Africa's tourism industry in the coming years. Key highlights include the Brand Africa Think Tank, a closed-door forum for top CEOs and stakeholders to develop communication, marketing, and branding strategies to boost market confidence and reinvigorate tourism post-pandemic. Topics to be covered include sustainable tourism development, enhancing Africa's global tourism competitiveness, innovation in tourism marketing, post-pandemic recovery strategies, and investment opportunities and challenges. The conference will conclude with the launch of the “Doing Business Guidebook for Zambia,” providing insights and practical guidelines for sustainable development in Zambia's tourism sector.

Retail

As reported by Delight Sunny, Mano, an Angolan grocery delivery startup, has expanded its services into the food delivery market in Lagos and Abuja. This move allows customers to track their orders within a 10km radius of restaurant partners, positioning Mano to compete with established players like Chowdeck and Glovo. Launched in Nigeria in 2022, Mano initially focused on delivering groceries and household appliances from dark stores but now aims to capture a share of Nigeria's burgeoning food delivery market, projected to generate $2.01 billion by 2024 and grow at a CAGR of 13.64% until 2029. Despite high delivery charges of ₦1,400 per delivery, Mano has built a reputation for reliable service and quality control, ensuring the freshness of produce through an aggregation model. This model differentiates Mano in the competitive landscape, where other players are also enhancing their services. Chowdeck secured $2.5 million in funding and exclusive deals with major brands like Chicken Republic and Shoprite. Glovo partnered with EV manufacturer Siltech for eco-friendly deliveries in Lagos. Meanwhile, Jumia Food and Bolt Food exited the market in 2023 due to economic challenges and intense competition.

Catherine Maron shared some interesting insights from The Food Industry Association’s latest report. According to The Food Industry Association's 2024 report, after a spike during the pandemic, profit margins and same-store sales growth in the grocery industry have returned to pre-pandemic levels in America. The report highlights that only 38% of food retailers expect same-store sales to increase in 2024, with a mere 13% anticipating higher net profits. Grocery retailers are intensifying efforts to enhance cost controls and reduce non-value-driving expenses amid ongoing challenges such as out-of-stocks, supply chain disruptions, and labour retention issues, which have somewhat improved from previous highs but remain significant concerns. Supercenters have gained a competitive edge over traditional grocers, compounded by competition from club stores, restaurants, and online retailers. Issues like social challenges, including incivility and security issues, also weigh heavily on the industry's landscape. In response, grocers are focusing on enhancing price strategies, promoting private labels, expanding fresh food offerings, and increasing local product lines to attract customers and improve profitability amidst evolving consumer expectations.

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