Month: February 2022

What do consumers want in 2022? New research examines how customers behaviour has shifted during the pandemic, and what this means for how retailers should interact with them.

The past 18 months has reshaped the retail landscape and sent retail analysts into overdrive trying to understand how consumers behaviour has adapted and shifted during the pandemic.

What was once accepted truths about shopper’s habits have been disrupted, and understanding what this means for big or small retailers is paramount in 2022.

Capgemini’s new report ‘What Matters to Today’s Consumer’ helps unpick changes in consumer behaviour, and understand what might be temporary or more permanent shifts. It highlights how the ‘conscious consumer’ is becoming commonplace and emphasises the impact of ongoing supply chain issues and cost of living increases.

Supply chain issues set to continue

In late 2021, business leaders from a range of sectors told the House of Commons business, energy and industrial strategy committee that small businesses would bear the brunt of labour shortages and price rises until 2023.

Tim Bridges, global sector lead for consumer products, retail and distribution at Capgemini speaking via email, underlines what is at stake. “Retailers mustn’t take their eyes off supply chain challenges this year. They can spend huge amounts of money marketing but if the product availability is constrained it’s all for nothing”.

He adds that “fifty-four per cent of consumers prefer local or regional products" and highlights that a move to a more localised supply chain "not only drives brand purpose but also creates agility and flexibility to be able to deliver in supply-constrained scenarios.”

Cost of living sky rockets

Consumer spending has been a major driver of the economic recovery, but with consumer confidence dropping to its lowest level in 11 months as people worry about surging inflation and fuel bills, there are suggestions that rising living costs will slow the household spending recovery.

Bridges explores how retailers are tackling this issue. “We are starting to see two different approaches to tackling price rises. One is a move to subscription models. Here, price increases are spread out over time. The other is to let consumers decide – do they want what they’re after, or an economy option? Often, consumers still opt to pay a premium – as long as they are offered a choice.”

The holy grail – brand loyalty

Brand loyalty, the ability of retailers and brands to retain customers, is highlighted as a key to success in Capgemini’s study. Accenture also examined brand loyalty in a recent report on the impact of the pandemic, looking at how we want to consume has been shaped by the seismic shifts in how we live.

Accenture’s work notes that the pandemic encouraged consumers to look inward, “elevating concepts of relationships and responsibility and re-evaluating their priorities.

It highlighted how these "new mindsets are shaping where, what and how consumers buy, which companies must be acutely aware of as they aim to build loyalty with the consumer in 2022. Through their purchase choices, they are purposefully seeking to influence their communities and the environment, and to confirm how they see themselves in the world."

Bridges agrees, noting that as well as being aware of what is driving today's consumers, retailers must stay tuned in to what customers are saying and thinking. Consumer product companies have many more avenues today to promote brand awareness and loyalty that’s additive to the retailers selling their products. The most active channel is social media, both for promotion and for understanding consumers’ reaction in
real-time – and, therefore, being able to make adjustments just as quickly”.

Consumers know what they want

Today’s consumer expects many things for the businesses they buy from. The ethos and ethical standing of not only the product but the company is extremely important to them. In addition to aligned values, they also want convenience. Whether that’s a multi-channel experience with fast, easy delivery and fulfillment alongside straightforward, multi-payment options, the bar has been set high.

The key to success in 2022 will be recognising that these demands exist, and plotting a course to not only meet expectations, but exceed them in ways that build trust and loyalty.

This article was written by Catherine Erdly from Forbes and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to [email protected].

On any given day, up to 10,000 discrete advertisements bombard consumers during their waking hours. Consumers – especially the youngest generations – are expecting more from these messages than just details about the latest seasonal sale. But this begs the question: is it possible for brands to prioritize purpose-driven initiatives without sacrificing business performance?

These initiatives serve as an effective way to win customers – and as a gateway to growth. According to research conducted among C-Suite executives and consumers as part of Deloitte’s annual Global Marketing Trends Report, consumers are becoming more discerning about whether a brand supports diversity, equity and inclusion both publicly and internally. Because marketing and advertising often serve as the face of what a brand stands for, marketers have an opportunity to elevate equity inside and outside of their organizations.

Making DEI commitments in all spheres of influence is key to effective branding

In our survey of 11,500 global consumers, we found that the youngest respondents (from 18 to 25 years old) took greater notice of inclusive advertising, while non-white respondents were up to two-and-a-half times more likely to be aware of a brand prominently promoting diversity when making a purchasing decision. But it’s not enough to just market inclusiveness or diversity – our results also show 57% of consumers are more loyal to brands that commit to addressing social inequities in their actions. Appealing to the loyalties of future customers can require brands to demonstrate they are promoting equitable outcomes in all their spheres of influence: in the workforce via hiring and retention, in the marketplace using diverse suppliers, or in society through meaningful community partnerships.

The impacts of measurable DEI commitments are highlighted by high-growth brands (defined as those with annual revenue growth of 10% or more), which are more frequently establishing key performance metrics for DEI objectives than their lower-growth competitors. Notably, in our survey of over 1,000 global executives, we found that the highest-growing brands are committed to achieving equitable outcomes across all their areas of influence – workforce, marketplace and society –in ways their lower-growth peers are not.

Additionally, 27% of high-growth organizations have established equity metrics for community investments (versus 18% for negative-growth organizations) and 38% of high- growth organizations have established similar metrics for their brand messaging campaigns (versus 30% for negative-growth organizations).

These demonstrable commitments to DEI can help bolster brand visibility, prominence, and trustworthiness among its consumers – particularly its youngest demographic. An overwhelming 94% of Gen Z consumers expect companies to take a stand on important social issues. Without legitimate commitments to DEI in all spheres of influence, attempts at inclusive marketing or promotion of diversity can fall flat and appear disingenuous to consumers who are expecting more from the brands they purchase from.

Elevating equity inside and out

How can marketers avoid the pitfalls of hollow messaging and win the hearts of consumers? We’ve highlighted three actions across an organization’s ecosystem.

Firstly, ensure teams and suppliers reflect your market. Marketing teams – both internal and external – that closely reflect the markets they serve can reduce the cultural and demographic distance between the brand and the consumers they aspire to reach.

Secondly, bring a diversity of voices to the organization. Chief marketing officers should use that position of influence to continuously monitor and bring the needs of underrepresented communities to their organization – and feature those voices and faces in campaigns.

Finally, make your commitments measurable. Ultimately, no amount of messaging can help a brand overcome the hurdle of being labeled disingenuous. One way to solve for this is to make sure your DEI goals are not just checking a box but creating real, measurable outcomes.

In the end, future generations and increasingly diverse communities are expecting more from the brands that they support. Simultaneously, the highest-growing brands are reducing the cultural and demographic distance between the makeup of their teams and the markets they aspire to reach. Marketers can help their organizations not only hone their messaging but also support their company’s transformation to a more equitable, diverse and inclusive organization, thereby underpinning their brand messaging with authenticity.

Christina Brodzik is a principal at Deloitte Consulting.

This article was written by Christina Brodzik from The Drum and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to [email protected].

The fundamental role and purpose of retail stores are changing. Digital transformation forced brick-and-mortar outlets to evolve as more of the path to purchase shifted online. Now, as e-commerce expands, retailers are
reimagining the functionality of stores and tapping into digital tools to keep those stores relevant.

Physical retail will remain the largest and most important channel for the foreseeable future, but how space is leveraged will transform. In Euromonitor’s recent Commerce 2040 virtual event, Jason Goldberg, chief commerce strategy officer at Publicis, noted that stores are no longer a singular touchpoint in the shopping journey; now, stores play several roles, becoming platforms that serve multiple missions and stakeholders.

Recently, retailers have reduced footprint entirely or used physical outlets to support online fulfillment operations or branded experiences. Personalized, immersive and collaborative concepts will advance the store experience of
tomorrow.

Check in before check out

A hallmark of the future store will be identifying the customer at check in rather than check out. Historically, stores have not been equipped to detect the identity of a shopper until payment, limiting the ability to personalize in- store shopping trips.

In the future, facial scanning will recognize customers upon entry, enabling retailers to tailor the in-store experience based on personal information and purchase history. As of 2021, one-third of global digital consumers are open to companies using facial recognition software to personalize in-person interactions, according to Euromonitor International’s Voice of the
Consumer Digital Survey:

This sentiment is strongest among younger cohorts—40% of millennials are comfortable using this technology to power more personalized interactions. Leveraging facial recognition across the store will allow associates to assist consumers with product choices in the context of what they own , for example.

Experiential ticket entry

Retailers will leverage technology to remove the hassles of shopping for mundane items while tapping into the innate desire and curiosity to test and try before buying. For products that require more consideration, such as furniture or electronics, physical retail will shift from stores where products are sold to a stage for immersive brand experiences.

In recent years, consumers adopted a minimalist mindset, prioritizing experiences over continued accumulation of products. In fact, 46% of global consumers would rather spend money on experiences rather than things, and this percentage increased 10 points in the last five years, according to Euromonitor. Creating unique engagements have the potential to generate new revenue streams. For example, consumers could go to a sports-themed experiential center and compete against top athletes in an alternate reality experience. Retailers looking to capitalize on this concept will need to create a playground-like atmosphere that ensures the experience matches the price tag.

Community collaborations

Brick-and-mortar outlets can become places where store associates and shoppers come together to design and co-create products. This in-store experience will emphasize onsite product customization for the end- consumer. Shoppers may be able to pick specific colors or textures for shoes, clothes or accessories to create the ultimate one-of-a-kind product.

Retailers that focus on community collaborations could also drive sustainability and target values-based buyers. Globally, 32% of consumers will buy from brands that support social and political issues that align with their values and 27% will go so far as to boycott brands that do not, according to Euromonitor International’s Voice of the Consumer: Lifestyles Survey 2021. This store concept presents the opportunity to bring consumers employees and local experts together to collaborate on circular projects that repair or upcycle previously purchased items.

“The store will become more of a hub of a community in the future,” Emily Xu, chief marketing officer of Mitchell Gold + Bob Williams, said during Euromonitor’s event. Xu noted that this type of in-person experience could be used to teach consumers about concepts like sustainability.

The retail store of tomorrow

Stakeholders operating across retail need to rethink long-term strategies. While the first wave of digital disruption was about how stores could compete with e-commerce, this next wave will be about integrating and uncovering synergies. Data will be key to providing the necessary business agility to do so.

“If you cannot move quickly on the real-time prescriptive recommendations that are coming to the store or restaurant, it is all for naught,” Barry Thomas, head of international customer marketing and future of commerce at The Coca-Cola Company, emphasized during the aforementioned event.

In the future, retail outlets will be multidimensional, with stores simultaneously operating as transactional, fulfillment, engagement and branding spaces.

This article was written by Michelle Evans from Forbes and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to [email protected].

The past decade—and particularly the past two years—have seen exponential growth in the utility of digital tools for marketing teams to leverage.
Audiences can now be targeted better, messaged more effectively, and, in the case of promotions and discounts, be smartly served optimized prices to motivate sales without sacrificing margins.

At the end of the day, what all of this innovation boils down to is maximizing opportunity. It’s using emerging consumer data initiatives to offer customers the right motivation at the right time to drive a sale. Now more than ever, the digital tools that have worked to optimize online commerce are connecting the dots to the in-store environment. For smart retailers, honing in on in-store marketing and promotions can help round out omnichannel marketing efforts across the board.

Now Is The Time to Act On Optimizing The In-Store Experience

As pandemic conditions begin to recede (for the time being), consumer comfortability with in-store shopping is getting back to some degree of normalcy. Statistics show that 70% of consumers are comfortable shopping in store, which is a 2.4x increase at this same time last year.

Additionally, as supply chain weaknesses make online shopping less reliable, particularly for time-sensitive purchases like holiday gifts, consumers may be opting for the guaranteed product-in-hand assurance that in-store shopping affords.

Buying options have also helped contribute to in-store foot traffic. The buy online, pick up in store shopping method has exploded in the past year, representing $72.46 billion, a 106.9% growth rate over 2019. All of these factors mean more opportunity to convert those crucial first moment of truth and impulse sales. During the heights of the pandemic, brands and retailers struggled to put consumers in positions to buy outside of the strictures of digital commerce; now, as more eyes return to shelves, these existing avenues are becoming available once more.

Successful marketing means connecting the dots and seizing the moment, meeting shoppers where they are and putting the right offer in front of them at the right time. In-store shopping is returning, and it’s returning at a time when retailers have had months developing technologies to maximize these touchpoints.

The Digital Transformation Changing The Landscape Of In-Store Marketing and Promotions

As mentioned, the opportunity for in-store conversions is also coinciding with technology that is integrating digital identifiers into the real-world. Brands have been confronted with the imperative to bolster their stores of first-party consumer data for months, which has led to better, actionable insights that can now be leveraged in in-store settings.

With more and more customers relying on their phones during the shopping experience, retailers and CPGs are able to actualize this level of consumer connectivity to provide frictionless interactions and buying experiences with customers in-store, rooted in data gleaned from online first-party data efforts.

Retailers are able now to provide real-time discounts and activated offers right at the shelf to help motivate buying decisions. From digital coupons to exclusive in-store pricing, the synergy of technology and product assortment is creating conditions for in-the-moment conversions in ways that hadn’t existed before.

Brands that have long been trailblazers in the in-store promotions and discount space are adapting their offerings to this new digital ecosystem. Neptune Retail Solutions, for example, has been one of the most prominent names in in-store discounting for decades. Recently, they’ve augmented their approach to include a more digital-first strategy, leveraging AI-driven dynamic pricing and promotions and digital coupons for a mobile-first shopping audience.

Putting These New Tools To Use

With a push back into stores for consumer goods purchases coupled with consumer demand for digital and contactless engagement and commerce options, now is the time for retailers and CPGs to act on upgraded and expanded in-store marketing and promotions. As brands and retailers look to improve first-party data collection and innovate in all things digital, including websites, digital ads, loyalty and email programs, the in-store marketing opportunity is massive for digital-first and omnichannel marketers.

This article was written by Jonathan Treiber from Forbes and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to [email protected].