Get ready for the ultra-dynamic consumer
Aug 07, 2019, 14 views
What is the main factor that accelerates the changes in the retail? The technology? According to the unpublished survey by the WGSN - global authority on trend analysis and forecasting - it is mainly consumers who cause these changes in the consumer market. They are driving change in society and challenging old economic models. Demanding, against old standards and with new values, these customers foster new business formats. The question for brands: what are these changes related to their behavior and perspectives on how they will affect the market from 2020?
To answer the question, the global company that anticipates trends and is responsible for directing the strategy of several companies, presents the highlights of the research "Ultradinamic Consumer" that brings six macro trends that identify what is behind this change in consumer behavior, related with: purchases made by mobile devices; human connections; confidence in brands; climate concerns; population-ageing; and sharing economics.
"We need to understand that consumers are mapping, studying brands. They also want to know if companies have changed their business model, especially when it impacts society. Consumers' intention is to know whether brands are aligned with their new demands and purpose - and, of course, how they relate to their needs. That is, they are driving the market on another level, "says Luiz Arruda, Luiz Arruda, Head of WGSN Mindset.
Learn more about the factors that will influence consumers' thoughts and attitudes:
1. Mobile Shopping Revolution
The new society is already driven by smartphones and people want to consume via mobile devices. No interaction and no processes. And retailers need to be aware of that and adapt their business if it is not suited to this demand. According to WGSN's executive retail survey, 64% of retailers say that mobile payment is a top priority for their business. Another survey conducted by the YouGov agency showed that 44% of those interviewed between the ages of 18 and 24 feel more comfortable talking to new people through social networking than live. In this context, it is possible to realize that the decision making by the users is done before the physical visit. That is why it is so important to put the consumer in control of the purchase, as long as there is human help, if necessary.
Companies can anticipate these needs by increasing in-store usage and automation in the payment method. Augmented reality, for example, can help consumers at the time of purchase - both by showing specificities and by solving doubts - and allows that moment to be a differentiated experience. Artificial intelligence also becomes an ally when associated with digital interactions, such as Alexa and Google Assistent.
With so many changes, it is critical that companies be prepared for this new scenario, which impacts on the chain as a whole - including the relationship between employees and employers. With studies * pointing out that thousands of jobs in the area have "high risk of automation," it is critical to ensure that the old role played by employees is redefined. In addition, it will be essential to bet on strategies that complicate deliveries.
2. The importance of feelings
Human connections are valued as people feel more alone. So they are looking for connections that help them feel more human. On the other hand, since retailers invest in artificial intelligence technology and digital experiences, the importance of the human connection will be a key differentiator for brands. Personal strategies begin to grow as a point of differentiation beyond price, especially when companies compete with Amazon.
3. The economy of trust
Confidence is a term that is increasingly recurrent and targeted by consumers globally. And how can your brand be trusted today?
Consumers are questioning what is real. That's why brands and retailers need to develop new strategies that can raise people's confidence. As people are exposed every day to a flood of fake news, it is becoming increasingly difficult to know which or whom to trust. In the US, the latest "Edelman Trust Barometer" survey found that confidence levels in the United States have fallen sharply in the general population. According to the study, confidence fell nine points to 43, the lowest level ever in a quarter.
Trust is an important stimulus factor of consumption. The WGSN Barometer, which every year looks at 200,000 consumers worldwide, pointed out that people's spending has a direct relationship to how much they trust a brand. But nowadays, what does it mean to be a trustworthy company? The tradition and trajectory of a brand does not necessarily make it a credible company.
In addition to offering quality products and services, companies are expected to be agents for positive change. Among respondents to the Edelman Trust Barometer, 64% said they believe a company can take actions that increase profits and improve economic and social conditions in the communities where they operate. Nearly two-thirds said they want CEOs to take political shifts rather than wait for government - which has levels of confidence far below companies in 20 markets. This means that CEOs' primary task is to "build trust," which goes beyond "developing quality products" and "delivering services" by 69 percent and 68 percent, respectively.
4. Climate concerns
The world needs help and its residents are looking for solutions and actions to make it better. The number of natural disasters triggered by extreme weather events - floods, droughts and fires - has more than doubled since 1980. In the same period, the number of storms has doubled, while floods, avalanches and landslides have quadrupled since 1980 and have doubled since 2004. Anxiety in relation to the climate is already a reality, as is the desire to limit or reverse the damage to the planet's ecosystem.
This new consumer emotional reaction will require retailers to create new strategies. Public discussion around plastic materials that are used only once, and consumer demand for solutions such as water bottles, coffee cups and reusable straws is just one among many behavioral changes that will require new business strategies.
When it comes to consumption, people try to do the right thing when there are sustainable alternatives at their disposal. According to data collected by Nielsen Consulting in 2018, the growth rate in product sales is increasing in certain sectors whenever there are sustainable alternatives. Items such as chocolate, coffee and hygiene products show an annual growth of 2%, and when there are sustainable solutions, this growth reaches 5%, especially hygiene products, which reach 14%.
In addition, the race for the circular economy has begun to run in the fashion industry. Many fast-fashion stores, such as Zara and H & M, have encouraged customers to return damaged or no longer used clothing even before fiber recycling becomes a commercial reality. This change of attitude will require a new mentality on the part of the stores that serve the consumer who only wants new products. The business and pricing structure will have to be reevaluated, as the public has been looking for durable, sustainable and resale products.
5. The long-lived generation
People are living longer and better. And brands need to be aware of this growing demand. Developed countries - from the US to Japan - recognize that it is difficult to deal with the aging population and the major changes that occur in the distribution of income. According to the UN, this issue will cause the most significant social transformation of the 21st century, with implications in all sectors of society.
In these countries, older consumers, despite being ignored or neglected, have much greater purchasing power than young consumers. According to survey data by the International Longevity Center, people over 50 in the United Kingdom spend a total of 314 billion pounds per year, which is equivalent to approximately 43% of total household spending on consumer products . Even so, the survey pointed out that 85% of people over 55 think that their favorite brand "do not understand them" or do not understand their needs.
This is an important opportunity for retailers, after all, just make some adjustments in the store space to welcome this demographic. Removing physical barriers and improving mobility - installing ramps and widening corridors and entrances, for example - can have a positive impact on sales.
In addition, the relationship of older people with technology has become closer and closer: it is important to remember that nowadays many older people use smartphone. In the US, a study by Pew Research found that 67% of individuals in the Boomer Generation have a mobile device. And since this is a trend that only tends to intensify, brands and retailers must remember to think about the needs of this consuming public as they develop and offer their digital products and experiences.
6. End of tenure
It's not about having is about living. The shared economy gains momentum in a scenario that consumers are more open to experiment with and brands need to understand the dynamics of this new market.
People are failing to spend on things to invest in experiences. And this has been noticed. The product discovery process also seems to have changed forever: today's consumers stop going "shopping," but at the same time, they never stop shopping because they're always connected to mobile apps and Instagram. Retailers have addressed this problem through strategies that aim to transform the willingness to buy a product by the need to have the will to buy a product for the pleasure of experience - which allows you to create a type of memory.
The factors that drive the consumer market reveal that people are not at such a positive moment and that they feel increasingly anxious, disconnected and pressed for time. There is a great opportunity for retailers to create products, experiences and services that can add real value to consumer life (and that can also be shared on social networks).
And the question remains: is your brand prepared to communicate and be relevant to these consumers?